Shell Pakistan has recently announced a significant development in itsoperations. The international unit of its parent company, Shell PetroleumCompany, has entered into an agreement with Wafi Energy to divest itsdomestic operations in Pakistan.
This divestiture is expected to be finalized by the fourth quarter of2024, pending regulatory approvals. It represents Shell Petroleum Company’sexit from the Pakistani market, involving the sale of its 77 percentshareholding, as previously indicated in June.
This strategic move by Shell is in response to a series of globaloperational changes. In 2022, Shell Pakistan (SPL) faced financialchallenges due to factors such as fluctuations in exchange rates, thedevaluation of the Pakistani rupee, and outstanding receivables. Thesechallenges unfolded against the backdrop of Pakistan’s broader financialcrisis and economic slowdown.
According to reports, Wafi Energy, which is a wholly-owned subsidiary ofAsyad Holding Group, a prominent fuel retailer in Saudi Arabia, will be theentity acquiring Shell Pakistan’s assets. Shell Pakistan’s operationsencompass a vast network of over 600 mobility sites, 10 fuel terminals, alubricant oil blending plant, and a 26 percent stake in Pak-Arab PipelineCompany Limited.
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The completion of this transaction is contingent on obtaining necessaryregulatory clearances and is anticipated to have a significant impact onthe energy landscape in the region. This move signifies Shell’s strategicresponse to the challenges it faced in the Pakistani market and aligns withits broader operational adjustments in the global context.