PM nod sought for change in oil firm control

Petroleum Division seeks approval for handing over Eni control to PIOGCL

ISLAMABAD:

The Petroleum Division has sent a summary to Prime Minister Shehbaz Sharif, seeking his endorsement for handing over control of Eni Pakistan Limited to Prime International Oil and Gas Company Limited (PIOGCL).

The division sought approval for the change in effective control from Eni Ulx Limited, Eni UK Limited and Eni Oil Holdings BV, in respect of subsidiary companies Eni Pakistan Limited, Eni Pakistan (AEP) Limited and Eni Pakistan (M) Limited respectively, to PIOGCL.

The change of control will be subject to the conditions that PIOGCL will undertake all the minimum work and meet financial obligations, including the decommissioning cost and the matters pending in courts, in respect of all the surrendered and active exploration licences, and development and production leases, both operated and non-operated by the three Eni companies.

The Petroleum Division, after getting the go-ahead from the prime minister, will send a summary to the cabinet for formal approval.

Earlier, the Petroleum Division’s Directorate General of Petroleum Concession, in a letter sent on April 1, 2022 to the managing director of Eni Pakistan, asked him to provide an undertaking of Hub Power Holding Limited in favour of PIOGCL that in case PIOGCL fell short of meeting its obligation/ financing with regard to the acquisition price and operating the Eni exploration blocks in future, Hubco would provide such financial support.

Eni Pakistan has also submitted an undertaking to the government. PIOGCL is a consortium of Hub Power Holding and Eni Employee Buyout Group (EBO).

In response, Hubco stated that they could provide support to PIOGCL including the EBO group’s share with regard to the acquisition price, however, they could not provide an undertaking regarding future operations as it was against the Companies Act 2017. However, “they will buy the shares in PIOGCL if it falls short of finances”.

Eni Ulx, Eni UK and Eni Oil Holdings are the parent companies of Eni Pakistan, Eni Pakistan (AEP) and Eni Pakistan (M) respectively. The parent companies entered into sale and purchase agreements on March 8, 2021 with PIOGCL for the sale of entire share capital of their subsidiaries in Pakistan.

In order to clear the way for the change of effective control/ disposition of shares to PIOGCL, Eni requested the consent of the government under the applicable petroleum rules.

The three Eni companies have working interest in various exploration licences, and development and production leases in Pakistan.

The Securities and Exchange Commission of Pakistan (SECP), Board of Investment and Federal Board of Revenue (FBR) had been requested for the no-objection certificate for the change in control of Eni companies.

Responding to the request, the FBR’s revenue wing said that there was no tax liability at present whereas the FBR Customs Karachi indicated an outstanding amount of Rs193 million, which was a sub judice matter in the Sindh
High Court.

The SECP and Board of Investment expressed no concern, saying that the matter may be decided by the ministry concerned as per the applicable rules.

On its part, the Petroleum Division said that it had examined the case and found that all financial obligations had been cleared by the seller except for the rental amount, which “is sub judice in the Sindh High Court”.

According to the information provided by the buyer, PIOGCL “seems to be technically sound as employees of Eni Pakistan will look after the operations”.

Published in The Express Tribune, June 25^th, 2022.

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