LAHORE: The Italian energy company, Eni, has sold its assets in Pakistan to Prime International Oil & Gas Company, a newly established joint venture (JV) between its local employees and Hub Power Company, in line with its 2021-24 business plan to dispose of its non-key assets to raise cash after the global downturn triggered by the Covid-19 pandemic and to move towards cleaner fuels.

A statement posted by the oil and gas exploration firm on its website said the sale of its Pakistani assets aligned to its wider strategy of reshaping and simplifying the company’s portfolio, extracting additional value from its strategic assets and disposing non-core business as per its four-year strategic plan.

The assets sold by the energy company interests in eight development and production leases in the Kithar Fold Belt, and the Middle Indus Basins, as well as four exploration licences in the Middle Indus and the Indus Offshore Basins. Eni’s main permits, according to the company statement, were in Bhit/Badhra in which it held 40pc stake and Kadanwari where it held 18.4pc stake. Other shares were in the permits for Latif (33.3pc), Zamzama (17.5pc) and Sawan (23.7pc). Prime International has also acquired Eni’s 10MW photovoltaic plant.

Eni had also partnered with oil giant ExxonMobil and Pakistan’s Oil and Gas Development Company and Pakistan Petroleum Ltd for offshore drilling at Kekra-1 well in Karachi waters at the cost of $100 million.

A document on Eni’s assets in Pakistan pointed out that its gas production had depleted to 19,000boepd (barrels of oil equivalent per day) in 2019 compared to over 22,000boepd in 2017.

The energy company had also put on sale its Australian gas assets valued at around $1bn but failed to attract any satisfactory bids, according to Reuters on Tuesday, with the sale of oil and gas assets becoming harder as energy transition picks up.

Neither Eni nor Hub Power gave the price of the deal, which came to light after Hub Power broke the news through a notice to the Pakistan Stock Exchange (PSX) on Monday.

The bourse filing stated that Hub Power Company, together with Eni’s local employees (in 50:50 joint venture), had executed definitive agreements to acquire all the upstream operations and renewable energy assets owned by Eni in Pakistan. The acquisition will be subject to regulatory approvals from the Securities and Exchange Commission of Pakistan and the Competition Commission of Pakistan.

Hub Power says the acquisition is part of its diversification strategy.

The Italian firm, according to a recently published report, had put its Pakistani assets for sale in June last year after the government refused to revise up profit margins of Eni and other oil and gas exploration companies, and delayed the auction of new blocks for exploration.

Published in Dawn, March 10th, 2021