KARACHI, June 14 (Reuters) – Shell Pakistan (SHEL.PSX) said on Wednesday that its parent company, Shell (SHEL.L) unit Shell Petroleum Company, would be exiting Pakistan with the sale of its 77% shareholding in the in the local business.
The move came after Shell Pakistan (SPL) suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables, and as the country faces a financial crisis and economic slowdown.
“To support its intention to high-grade and simplify its portfolio, Shell Petroleum Company Ltd… has initiated a sales process to sell its 77.42% shareholding in Shell Pakistan Ltd,” a spokesperson for Shell Pakistan said in an email to Reuters.
That includes “all of SPL’s Downstream businesses and SPL’s 26% ownership of Pak-Arab Pipeline Company Ltd (PAPCO),” the spokesperson added. Its Downstream businesses include Mobility and Lubricants.
SPL is listed on the Pakistan Stock Exchange. The company said in a notice to the exchange that the announcement “does not impact SPL’s current business operations, which continue”.
It said in the notice that Shell Petroleum Company had notified its board of directors of its intention to sell the holding in a meeting on June 14.
“Shell has entered into a process and wants to be transparent,” the spokesperson said.
“These decisions are not taken lightly, and Shell’s focus will now be on pursuing a safe and smooth divestment and continuing to deliver safe, reliable operations.”
Shell racked up $2.1 billion in divestment proceeds in 2022, compared with $15.1 billion in 2021, which included the divestment of the Permian assets.
Shell said on Wednesday that it is also conducting a strategic review of energy and chemicals assets on Bukom and Jurong Island in Singapore.
New CEO Wael Sawan announced plans to ramp up the company’s dividend and share buybacks while keeping oil output steady into 2030.
Reporting by Ariba Shahid; Writing by Sakshi Dayal and Gibran Peshimam; Editing by David Evans, Jan Harvey, Kirsten Donovan
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