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Monday July 22, 2024

Shell to sell majority stake in Pakistan unit to Saudi oil firm

Sale is expected to be completed by the fourth quarter of 2024, says Shell

By Business Desk
November 01, 2023
A view of a closed petrol pump due to fake news of petrol price hike again in the country. — Online/File
A view of a closed petrol pump due to fake news of petrol price hike again in the country. — Online/File

Shell Pakistan said its parent company's unit, Shell Petroleum Company, has signed a deal to sell its 77.42% majority interest to Saudi Arabia-based Wafi Energy LLC, according to an official statement issued by the company on Wednesday

“The sale is part of Shell’s strategy to high-grade its mobility network and was first announced on Capital Markets Day in June 2023,” the statement added.

The sale is expected to be completed by the fourth quarter of 2024, subject to regulatory approvals.

Upon completion, the Shell brand will remain in Pakistan through brand licensing agreements and customers will continue to have access to Shell’s premium fuel and lubricant portfolio, it said.

“SPL remains committed to delivering safe, reliable operations.”

WAFI Energy LLC, one of the leading fuel station companies in Saudi Arabia, is a fast-growing retail gas station network and the sole licensee of Shell Retail Network in Saudi Arabia.

The company was incorporated in 2012 with an authorised and paid-up capital of 3 million Saudi Riyal.

The development came after Shell Pakistan's parent company, Shell Petroleum Company Limited (SPCo), notified its intent to sell its shareholding in the Pakistani entity in June this year.

SPCo had a 77.42% stake in Shell Pakistan as of December 31, 2022, according to the annual report for that year.

Shell Pakistan said at the time that the divestment plan would have no impact on its current business operations, which would continue as usual. The company also said that it was seeing strong interest from international buyers.

Shell Pakistan is one of the leading oil marketing companies in Pakistan, with a network of over 800 retail outlets across the country. The company reported a profit after tax of Rs6,450 million for the nine months ended September 30, 2023, compared to Rs2,864 million in the same period last year.