ISLAMABAD: Petroleum Division’s Directorate General of Petroleum Concession (DGPC) has sought an undertaking of M/s Hub Power Holdings Limited (HPHL) in favour of M/s Prime International Oil and Gas Company Limited (PIOGCL) for proposed change of control of Eni Pakistan Limited.
DGPC, in a letter dated 1st April 2022 to the Managing Director (MD) of Eni Pakistan Limited, has asked to provide an undertaking of M/s HPHL in favour of M/s PIOGCL for the proposed change of control of Eni Pakistan Limited to PIOGCL.
The DGPC said that in order to proceed further, an undertaking on a judicial stamp paper from M/s HPHL is required in favour of M/s PIOGCL in case the PIOGCL falls short in meeting its obligations/financing with regard to acquisition price and running of operations in future.
HPHL shall provide all such financial support of PIOGCL unconditionally including ENI Employees Group (EBO) share, said DGPC letter.
According to sources, a draft summary has been prepared for the consideration of federal cabinet to ensure the proposed change of control of Eni Pakistan Limited by PIOGCL. They said that the Energy Ministry (Petroleum Division) has completed the process required for the transfer of Eni’s assets to PIOGCL.
However, they said that the energy ministry has completed this process without ensuring the necessary checking of the value of the assets of Eni Pakistan Limited. They said though the Eni has deposited withholding tax of Rs 39 crore to the FBR, however, the value of Eni’s assets should stand between US $ 90-110 million. Transfer of Eni assets to PIOGCL at under-valued rate of US $ 16 can be to save its skin from the taxes, said sources.
Available documents disclosed that Eni UK Limited and Eni Oil Holdings BV (Vendor) had earlier entered into a sale purchase agreement with Prime International Oil & Gas Limited (Purchaser) for the sale of entire share capital of its subsidiary company (Eni Pakistan Limited). And, the vendor requested the government’s consent (NOC) for the said transaction and provided certain information as per provisions of the applicable rules. Similarly, financial position of one of the joint venture (JV) partner namely Hub Power was found satisfactory while the financial position of other partner also holding 50 percent of the share namely ENI Employees Group (EBO) was found not satisfactory.
It is pertinent to mention that 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.
