KARACHI: The Hub Power Company Ltd (Hubco) said on Friday its joint-venture firm has completed the Eni transaction that involves the acquisition of the Pakistan business of the global energy exploration giant.

The country’s largest independent power producer has carried out the transaction through Prime International Ltd in which Hubco controls 50 per cent shares through its subsidiary Hub Power Holdings Ltd. The other half of the shareholding in Prime International is owned by Eni’s Employee Buyout Group. “Through Prime, Hubco will further develop critical indigenous fuel sources for the country and work towards optimum utilisation of our natural resources. This will help in reducing the country’s reliance on imported fuel sources,” it said.

As part of the exploration and production sector strategy, the joint venture is looking for growth opportunities in oil and gas fields that it already owns as well as new fields that the government may put on the auction block.

In the latest financial accounts, Hubco recorded its shareholding in Prime In­ter­national as a long-term invest­ment at Rs467.3 million.

According to Standard Capital Securities Strategist Faisal Shaji, Pakistan’s sedimentary basins — a low area in the earth’s crust containing oil reserves — are “high risk”. Hence, they offer a low probability of the existence of reserves.

That’s why the seven super­­major energy companies, which include Eni, aren’t too enthusiastic about investing in Pakistan, he said.

In contrast, Hubco is in need of diversification as its furnace oil–fired base plant of 1,292 megawatts has been operating on a low load factor. The load factor, which is the maximum output for a power unit after taking into account all scheduled outages, for Hubco’s base plant was only 11.7pc for 2021-22.

Published in Dawn, December 31st, 2022