Oil Giant Shell Exits Pakistan After 75 Years
Shell Plc has formally conveyed to the Pakistan Stock Exchange (PSX) that it has decided to exit Pakistan and sell its 77.42 percent shares to Saudi Arabian Wafi Energy LLC.
Shell Petroleum Company Limited, a subsidiary of Shell plc, has agreed to sell its majority interest in Shell Pakistan Limited (SPL) to this Saudi company, said an official statement issued by the company on Wednesday.
Notably, recently major Chinese and Russian companies also backed out of acquiring Pakistan Steel Mills. Chinese companies conveyed to the Pakistani government that global steel demand was dwindling and world economies were also slowing down, so they could not proceed with this deal.
“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 by the company 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 authorized and paid-up capital of 3 million Saudi Riyal.
The development came after SPL’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.
SPL 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.
The company 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.
