Aramco explores bidding for Shell's Pakistan unit: report

In a notable development, Saudi Aramco is reportedly exploring the possibility of making a bid for Shell Plc's assets in Pakistan.

Citing sources familiar with the matter, Bloomberg reported that this potential deal could mark Saudi Arabia's first venture into the South Asian nation's energy sector.

Saudi Aramco, the world's largest oil company, is said to be carefully evaluating the Shell assets in Pakistan, with a particular focus on Shell Pakistan Ltd., which is listed on the Pakistan Stock Exchange (PSX) and has an approximate market value of $123 million.

While the exact value of the potential transaction remains undisclosed, insiders suggest that the assets under consideration could be valued at around $200 million.

It is important to note that, at this stage, there is no certainty that these deliberations will result in a transaction.

The Bloomberg report highlights that other potential buyers may emerge as competition for these assets. The sources cited in the report stress that these discussions are in the early stages, and a final decision is yet to be reached.

Read also: Saudi Aramco considers selling $50 billion in shares

Shell, on the other hand, has refrained from divulging specific details about the potential sale. “Any sale will be subject to a targeted sales process, the execution of binding documentation and the receipt of applicable regulatory approvals,” a representative was quoted as saying by Bloomberg.

However, they declined to comment on any specific companies, emphasising that any sale would be subject to a targeted sales process, the execution of binding documentation, and the receipt of necessary regulatory approvals.

This development follows an earlier announcement made by Shell Pakistan Limited (SPL) in June of this year, where the parent company, Shell Petroleum Company Limited (SPCo), expressed its intention to sell its shareholding in SPL.

Shell's decision aligns with its broader corporate strategy under CEO Wael Sawan to increase returns to shareholders and divest from underperforming businesses.

Saudi Aramco is not the sole player eyeing these assets. In July, Pakistan Refinery Limited (PRL) and Air Link Communication (AIRLINK) jointly expressed their intent to acquire a majority stake in and control of Shell Pakistan Limited.

Saudi Aramco's interest in Pakistani assets coincides with Saudi Arabia's exploration of investment opportunities in Pakistan. The country's Energy Division, in conjunction with the Board of Investment (BoI), is reportedly in the process of drafting terms and conditions for hiring a financial advisor to assess the value of the federal government's 25 per cent shares in the Reko Diq gold and copper mines. The objective is to potentially sell them to Saudi Arabia's Public Investment Fund (PIF).