Pakistan Refinery (PRL) has announced its intention to purchase a controlling stake in global oil and gas company Shell’s Pakistan operations.
The company informed the Pakistan Stock Exchange (PSX) on Monday of its intention to purchase 77.4% of Shell Pakistan, as part of a joint bid alongside telecommunications company AirLink Communication. This amounts to Shell’s entire stake in the business. The joint bid is operated by Next Capital, a finance firm that notified the PSX about the acquisition attempt.
Muzzaffar Hayat Piracha, CEO of AirLink, told Reuters: "It's a joint venture between PRL and Airlink. The details of shareholding between Airlink and PRL will be disclosed later.” Piracha added that the smartphone manufacturer’s goals of expanding across industries motivated its participation in the bid.
The acquisition will encompass all of Shell Pakistan’s downstream businesses and shareholdings, including the company’s 26% shareholding in the Pak-Arab Pipeline company (PAPCO). PAPCO is the operator of the White Oil onshore pipeline, a 786km oil pipeline that crosses Pakistan, connecting the port of Qasim in Sindh to PAPCO’s 100,000-barrel-per-day refinery in Punjab.
In June, Shell informed investors that it was set to completely divest from operations in Pakistan after a post-tax loss of $878,070 (Rs72m). The loss was driven by external factors including the decline of the value of the Pakistani Rupee, as well as general price volatility and environmental issues.
PRL is a subsidiary of the Pakistan State Oil Company. The state-owned oil company holds 63.56% of PRL. Shell also previously held a 28.57% stake in PRL, which it sold the majority of in 2018, before completely divesting in 2019. PRL currently holds 50% of the upcoming Karachi VIII cracking refinery, which, once complete in 2027, will be able to process 300 million barrels of crude oil per day.
