The government has served a show-cause notice on Spud Energy Limited and Frontier Holdings Limited over alleged change in ownership and effective control without prior government approval.
The Directorate General of Petroleum Concessions (DGPC), Ministry of Energy (Petroleum Division), has issued the notice for an act that may constitute violation of petroleum rules. The Petroleum Division is of the view if there is any change in a company ownership or board, it is necessary to obtain approval from the division.
The aim of this is to ensure that new owners or board members do not include citizens of countries hostile to Pakistan, such as India or Israel, as such individuals pose security risk. For instance, if a foreign company, whose subsidiary is operating in Pakistan, undergoes such changes, it can become a security threat to the country.
According to the official notice dated July 18, 2025 issued to Spud Energy, Frontier Holdings and their parent company Jura Energy Corporation, which is available with The Express Tribune, the DGPC noted that a 73.3% controlling stake of Jura Energy was reportedly transferred by Phoenix Exploration to IDL Investments Limited, an entity registered in the British Virgin Islands. The transaction, which took place on March 6, 2025, was not officially reported to DGPC prior to or following its execution.
"Any disposition of shareholding or effective control without prior consent of the government is a violation under Rule 68(d) of the Pakistan Petroleum (Exploration and Production) Rules, 1986 and Rule 69(d) of the 2001 rules," the notice read.
DGPC said that under the rules, companies holding petroleum rights are bound to disclose any fresh issues of capital, changes in ownership and alterations to their corporate structure. These reporting obligations, the notice said, were not fulfilled in this case.
"The transaction may have led to shareholding/structural changes, which may impact effective control and, as such, should have been reported to this directorate and sought necessary approvals," the DGPC stated. It added that it had been informed of the transaction via a third-party letter dated May 2, 2025. DGPC has now demanded comprehensive documentation and justification within 30 days from Spud Energy, Frontier Holdings and Jura Energy. The companies have been asked to provide full details of the shareholding structure of involved entities – IDL, Phoenix, Jura Energy, PetExPro, Frontier Holdings and Spud Energy – before and after the transaction.
Other requirements include disclosure of new board appointments, shareholder voting patterns, tax filings, transaction value and whether capital gains or withholding taxes were paid in Pakistan.
In particular, the DGPC sought to understand how the 2025 transaction differs from a 2012 case, where it had granted no-objection certificate for a similar change in Frontier Holdings' control from Jura Energy to Eastern Petroleum Limited, Mauritius.
Failure to respond within the stipulated timeframe may result in punitive measures, including the "revocation of petroleum right," the notice warned. The companies have also been given the option to appear before the authority for personal hearing, should they so desire.
'No need for govt nod'
Meanwhile, Jura Energy said that on March 6, 2025, Phoenix Exploration, a former shareholder of Jura Energy, completed the sale of all its outstanding common shares in Jura to IDL Investments, a British Virgin Islands-based investment entity.
The shareholding sold represented a 73.3% interest in Jura. As Jura is a publicly listed company on the Toronto Stock Exchange, the transaction was publicly disclosed upon completion, in accordance with the applicable securities' regulations.
In a letter written to the Ministry of Energy, Jura said that while applying the 1986 rules to Kandra development and production lease, the requirement to seek the government of Pakistan's approval does not arise since the transaction did not result in change in control of the holder as PetExPro continues to be its parent company.
It said that the transaction complies fully with Pakistan's regulatory requirements and no breach of law or regulation has occurred.
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