The Board of Management (BoM) of Pakistan State Oil (PSO) on Wednesday deferred the decision to approve acquiring 30 percent shares of Shell International Petroleum Company Limited in Pakistan Refinery Limited (PRL), Business Recorder has learnt.
"The feasibility report on acquiring Shell shares in PRL has not satisfied the BoM and hence the decision had been delayed," sources said, adding "the board wanted more information on way forward to acquire Shell shares in PRL. "The BoM in its meeting held on Wednesday decided to take up the issue in upcoming meeting," sources added. Due diligence exercise relating to acquiring shares of Shell in PRL had been completed and in this regard a report was submitted before the BoM for a decision.
The Board of Directors of PRL had given provisional approval in this regard in its meeting held on June 30, 2010, subject to agreed purpose and terms of reference of the due diligence exercise. PRL supplies 30-40 percent of the fuel to PSO. After acquiring Shell shares, PSO would invest in the refinery to enhance its refining capacity by 50 to 70 percent to 100,000 barrels per day from existing 47,000 barrels per day to ensure confirmed source of refined fuel," sources said.
At present, PSO has 18 percent shares and after acquiring these shares, its total shares would be 48 percent in PRL. The shares of other stakeholders will remain as follows: Caltex 12 percent, National Bank of Pakistan 8 percent, National Investment Trust (NIT) 6 percent and individual shareholders 26 percent.
At present, fuel consumption has surged to over 9 million tons from 7.9 million tons due to greater reliance on thermal power generation. The refining capacity of oil refineries ranges between 2.6 million tons to 3.5 million tons. "The country depends more on imported products and after increase in PRL refining capacity, the country''s reliance on imports will be reduced," sources added.