Shell exits Pakistan via sale of entire SPL stake to Saudi Wafi Energy

SINGAPORE (ICIS)–Shell will sell its 77.4% stake in a listed subsidiary company in Pakistan to Saudi Arabia’s Wafi Energy for an undisclosed amount, marking the Anglo-Dutch energy giant’s exit from the south Asian country by late next year.

The stake in Shell Pakistan Ltd (SPL) is currently held by Shell Petroleum Co Ltd, a subsidiary of Shell plc.

The sale is expected to be completed by the fourth quarter of 2024, Shell said in a statement on Wednesday.

“Shell Group will cease to have business operations in Pakistan following this sale, which is subject to regulatory approvals,” a company spokesperson told ICIS.

SPL markets petroleum products and compressed natural gas, as well as blends and markets various kinds of lubricating oils.

Its profitability in 2022 was weighed down by slumping Pakistani rupee (PRs), rising inflation and macroeconomic uncertainty.

The buyer, Wafi Energy, is a wholly-owned affiliate of Asyad Holding Group, a fuel retailer in Saudi Arabia.

“However, the Shell brand will remain visible through brand licensing agreements,” the spokesperson said.

Wafi Energy had signed in 2022 a license agreement to operate mobility sites under the Shell brand in Saudi Arabia.

The SPL sale marks the end of Shell’s 75 years of operations in Pakistan, as the energy major conducts a thorough review of its global assets.

In Singapore, the company is considering divestment as an option for its petrochemical assets.

“Our strategic review is ongoing and we are exploring several options including divestment,” the company spokesperson said.

Shell has manufacturing operations at two sites in Singapore – Pulau Bukom and Jurong Island.

Its Pulau Bukom cracker has an ethylene capacity of 1.15m tonnes/year, according to the ICIS Supply and Demand Database.

The energy giant’s Singapore sites also produce ethylene oxide (EO)/ethylene glycol (EG), butadiene (BD), benzene, ethylbenzene (EB), styrene, polyether polyols, propylene, propylene glycol (PG), propylene oxide (PO) and lubricants.

Focus article by Pearl Bantillo