ISLAMABAD: Six months after issuing show-cause notices to energy companies for alleged unauthorised changes in ownership and management control, the Petroleum Division has yet to take action, despite the strategic industry classification of the firms involved.

The parent companies of Spud Energy Limited and Frontier Holdings Limited offloaded their interests without formal approval from relevant authorities, a violation of national regulations.

The controversy began on March 6, 2025, when Phoenix Exploration sold its 73.3 per cent stake in Jura Energy to IDL Investments Limited, a firm registered in the British Virgin Islands.

On July 18, 2025, the Director General Petroleum Concession (DGPC), under the Ministry of Energy’s Petroleum Division, issued a show-cause notice stating that the transaction was “neither disclosed nor approved prior to execution”, as required under Pakistan’s petroleum rules.

Under these rules, companies holding petroleum rights are obligated to disclose changes in shareholding, the issuance of new capital, board appointments, voting rights, and corporate structure.

The DGPC directed Spud Energy, Frontier Holdings, and Jura Energy to submit comprehensive documentation within 30 days. Required disclosures included detailed shareholding structures of IDL Investments, Phoenix Exploration, Jura Energy, PetExPro, Frontier Holdings, and Spud Energy, both before and after the transaction.

Regulators also requested details on new board appointments, shareholder voting patterns, transaction values, tax filings, and confirmation of whether capital gains or withholding taxes were paid in Pakistan.

The notice warned that failure to comply could result in punitive action, including the revocation of petroleum rights. The requirements are part of national security considerations used to evaluate companies operating in the country’s oil and gas sector.

Both companies have admitted that the transaction took place without prior approval. However, the DGPC has not initiated enforcement action under Rule 69(d), which empowers the regulator to suspend or revoke licences in cases of unauthorised transfer of control or interest.

On Oct 16, 2025, the Islamabad High Court (IHC) issued a status quo directive in Writ Petition No. 4195/2025. The court restrained all parties from taking any action that could alter the existing shareholding or control structure of Frontier Holdings Limited and Spud Energy Pty Limited.

The Petroleum Division has not responded to inquiries regarding the delay in enforcing compliance with petroleum rules or ensuring adherence to the IHC directions.

Published in Dawn, January 2nd, 2026