Saudi Company makes huge investment in Pakistan
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Shell Pakistan has recently announced a significant development in its operations. The international unit of its parent company, Shell Petroleum Company, has entered into an agreement with Wafi Energy to divest its domestic operations in Pakistan.
This divestiture is expected to be finalized by the fourth quarter of 2024, pending regulatory approvals. It represents Shell Petroleum Company's exit from the Pakistani market, involving the sale of its 77 percent shareholding, as previously indicated in June.
This strategic move by Shell is in response to a series of global operational changes. In 2022, Shell Pakistan (SPL) faced financial challenges due to factors such as fluctuations in exchange rates, the devaluation of the Pakistani rupee, and outstanding receivables. These challenges unfolded against the backdrop of Pakistan's broader financial crisis and economic slowdown.
According to reports, Wafi Energy, which is a wholly-owned subsidiary of Asyad Holding Group, a prominent fuel retailer in Saudi Arabia, will be the entity acquiring Shell Pakistan's assets. Shell Pakistan's operations encompass a vast network of over 600 mobility sites, 10 fuel terminals, a lubricant oil blending plant, and a 26 percent stake in Pak-Arab Pipeline Company Limited.
The completion of this transaction is contingent on obtaining necessary regulatory clearances and is anticipated to have a significant impact on the energy landscape in the region. This move signifies Shell's strategic response to the challenges it faced in the Pakistani market and aligns with its broader operational adjustments in the global context.
