Petroleum Division takes notice of Eni Pakistan sale to JV

Taking serious notice of the sale of Eni Pakistan Limited to a new joint venture (JV), the Petroleum Division has asked Eni Pakistan Limited Managing Director (MD) to prove the financial strength and technical expertise of this new JV.

Petroleum Division's Directorate General of Petroleum Concession (DGPC), in a letter dated 20th September 2021 with the subject 'Proposed Change of Control of Eni Pakistan Limited', has asked MD Eni Pakistan Limited to provide proves regarding the source of funding for the acquisition of 50 per cent shareholding of Eni Pakistan Limited, details of any tax liability acquired by details of Prime International Oil & Gas Company Limited (PIOGCL) in order establish the technical and financial strength of PIOGCL.

DGPC has also sought from the Eni Pakistan Ltd MD to provide details of management structure showing clear lines of responsibility and processes for an upstream operation providing all details of operational staff to be based in the country, details of health, safety and environmental management system to be implemented and used by the company, details of how PIOGCL will manage in practice an exploration, production and development operations acquired from M/s Eni, having no experience in the E&P sector and details of technical, logistic resources available for E&P operations acquired from M/s Eni.

Eni Pakistan Limited and a foreign Exploration & Production (E&P) company PIOGCL had earlier signed a Sale Purchase Agreement (SPA) on March 08, 2021, under which the entire share capital of ENI was sold to PIOGCL. And, the ownership of principal shares of Eni has been equally divided between the former employees of Eni Pak Ltd, with as directors of the new venture and Hub Power Company Limited ('Hubco'), an IPP (Independent Power Producing) company that mainly specializes in installation and management of power plants throughout various regions across the country.

According to sources, the tax liability of the Eni is USD118 million and the current cash and bank balance of Hubco are Rs511,000,000 or USD3,320,000 while currently, the Directorate General of Petroleum Concession (DGPC) does not have any information that such a company or former employees of Eni can take the burden of the enormous tax liability of Eni Pakistan Limited.