MABAD - Pakistan State Oil (PSO) could not able to acquire 30 percent shares of Shell International Petroleum Company Limited in Pakistan Refinery Limited (PRL) due to unavailability of approval from its Board of Management (BoM).
The feasibility report on acquiring shares of Shell in PRL could not satisfy the BoM and therefore decision had been delayed, well-informed sources told TheNation.
It may be mention here that concerned board had wanted more information on way forward to acquire Shells shares in PRL. BoM in its meeting decided to take up the issue of acquiring Shells shares in upcoming meeting, sources added while saying that with due carefulness an exercise relating to acquiring shares of Shell Company in PRL had been completed and in this regard a report was submitted before BoM for decision.
However, the Board of Directors of PRL had given provisional approval 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.
Sources further added that at present, fuel consumption had 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.
It is relevant to say after acquiring the Shells 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 maintained. At present, PSO has 18 percent shares and after acquiring the shares of Shell, its total shares would be 48 percent in PRL. The shares of other stakeholders will remain as Caltex 12 percent, National Bank of Pakistan (NBP) 8 percent, National Investment Trust (NIT) 6 percent and individual shareholders 26 percent.
The refinery is situated on the coastal belt of Karachi. Pakistan Refinery Limited is a hydro skimming refinery designed to process various imported and local crude oil to meet strategic and domestic fuel requirements of the country. The refinery has a capacity of processing 47,000 barrels per day of crude oil into a variety of distilled petroleum products such as Furnace Oil, High Speed Diesel, Kerosene oil, Jet fuel and Motor Gasoline, etc.