Saudi Aramco is reportedly exploring a potential bid for Shell Plc’s assets in Pakistan, as quoted by a newspaper citing a Bloomberg report. This move, if pursued, would mark Aramco’s first foray into the South Asian nation.
Sources familiar with the matter, speaking on condition of anonymity, revealed that Saudi Aramco is currently assessing Shell assets, particularly Karachi-listed Shell Pakistan Ltd, which holds a market value of approximately $123 million. It is estimated that the Pakistani assets of the oil and gas company could be valued at around $200 million in a potential transaction.
With over 600 fuel stations and a longstanding 75-year history in Pakistan, Shell has established a prominent presence in the country, including a thriving lubricants business.
However, insiders caution that Aramco’s interest does not guarantee an acquisition, leaving room for other potential buyers to emerge.
A representative from Shell acknowledged receiving strong interest from both local and international parties but refrained from providing further details.
“Any potential sale will be subject to a targeted sales process, binding documentation, and regulatory approvals,” the representative emphasized.
Despite attempts to seek comment from an Aramco spokesperson, Bloomberg’s efforts went unanswered.
In a strategic move announced in June this year, Shell disclosed its intentions to divest from the Pakistani market, planning to offload its 77.4% stake in Shell Pakistan and its 26% ownership in Pak-Arab Pipeline Co, a state-backed cross-country pipeline system.
This decision aligns with Shell’s broader divestment strategy under the leadership of CEO Wael Sawan, aimed at enhancing shareholder returns and streamlining non-profitable entities.
The impending departure of Shell from Pakistan poses challenges for the nation, already grappling with economic instability exacerbated by currency devaluation over the past year.
Pakistan has recently experienced the departure of several multinational corporations, with fuel retailer Puma Energy exiting in 2021, and the closure of trucking startup Trella in April.
In a parallel development, Crown Prince Mohammed bin Salman of Saudi Arabia has instructed officials to explore avenues for bolstering assistance and investments in Pakistan. Earlier this year, the Saudi Press Agency reported plans by the Saudi Fund for Development to conduct a study on increasing deposits to the State Bank of Pakistan from $3 billion to $5 billion. Additionally, the fund aims to devise strategies to elevate Saudi investments in Pakistan to $10 billion.
Aramco is currently engaged in discussions with the Pakistani government on a $10 billion refinery project, confirmed by the country’s energy minister, Muhammad Ali, earlier this month.
