The recent economic meltdown not only shattered the country car industry but also hit the petroleum sector. A number of the factors including Rupee devaluation and the ongoing financial breakdown have contributed to urge major oil companies to consider withdrawing from the country.
French oil major TotalEnergies has announced its plans to divest its 50% stake in Total PARCO Pakistan Limited to global commodities trader Gunvor Group.
In their press release, the company stated, “TPPL is a 50/50 joint venture between TotalEnergies Marketing and Services and Pak-Arab Refinery Limited (PARCO) in Pakistan with a retail network of more than 800 service stations, fuel logistics, and lubricants activities.”
The new entity will continue its retail business under the existing “Total Parco” brand, and its lubricants business under the “Total” brand for five years in Pakistan, continuing to serve its customers, the communication added.
This strategic move, while reflecting TotalEnergies’ focus on core geographies, raises concerns about Pakistan’s attractiveness as an investment destination for international energy players.
Earlier, Shell Petroleum Company, announced to sell its 77% shareholding. This strategic move came as part of Shell’s global operational adjustments and amid financial challenges faced by Shell.
Why is TotalEnergies Selling Its Stake?
The departure of these international energy giants raises questions about Pakistan’s ability to attract and retain foreign investment in its energy sector. The country has faced significant economic challenges, including a depreciating currency, rising inflation, and energy shortages, which have made it a less attractive market for investors.
However, the government’s efforts to address these issues, such as the recent meeting between the finance minister and officials from PARCO and Gunvor Group, suggest a commitment to fostering a conducive environment for foreign investment.
Total PARCO Pakistan Limited, a joint venture between TotalEnergies and Pak-Arab Refinery Limited, has been a prominent player in Pakistan’s oil marketing industry with a vast network of over 800 service stations.
The reaffirmation of Gunvor Group’s commitment to Pakistan’s energy development provides some hope for the future.
As Pakistan continues to navigate economic challenges and pursue energy sector reforms, the exit of TotalEnergies serves as a reminder of the need to create a stable and attractive investment climate for international players.
By addressing the underlying issues and implementing effective policies, Pakistan can position itself as a more competitive destination for foreign investment in the energy sector
