Hardy prepares to raise pounds 80m

HARDY Oil & Gas yesterday unveiled plans to raise pounds 80m via a rights issue but admitted that plans to spend some of the cash in Pakistan could be hit by sanctions.

Hardy will use the new money to support a pounds 300m spending programme over the next five years, of which pounds 60m is earmarked for Pakistan.

But nuclear testing by the Islamabad government has led the US to impose a moratorium on multilateral aid. "So far none of our business there is covered by sanctions but obviously if the embargo broadens it could affect out investment," said John van der Welle, finance director.

Analysts also expressed fears about how quickly the Pakistan schemes could move ahead. "There are no US partners with Hardy but it could be hard to find banks willing to support such projects," said one.

The small independent has made an exciting gas find on the Sawan concession in Pakistan. It indicated there could be as much as one to two trillion cubic feet of gas there.

The investment programme is split between Pakistan, Australia and the UK North Sea. Off Britain, Hardy is busy with the development of the Elgin and Franklin fields.

The company is hoping to build up further field opportunities by forming a new joint venture with the US offshore services giant Halliburton. The two partners plan to deploy a new form of subsea technology, called AlphaPRIME, which, it is said, could cut costs by as much as $3 per barrel.

But its choice of Halliburton Energy Development as a partner could prove controversial. The US company has worried some clients by competing for oil company business. Halliburton has taken equity stakes in the Sangu field alongside Cairn Energy and the Fyne field with Monument Oil & Gas. This has led to accusations that it is competing with customers.

A spokesman for Halliburton admitted he was "aware of this argument" and agreed his company might increase its equity stakes yet further through the joint venture with Hardy.