ISLAMABAD: Despite classifying the oil and gas sector as a strategic industry, the Petroleum Division has failed to take enforcement action six months after issuing show-cause notices to energy companies over alleged unauthorised changes in ownership and management control.
The case involves Spud Energy Limited and Frontier Holdings Limited, whose parent companies reportedly offloaded their interests without obtaining mandatory prior approvals from the relevant authorities — a clear violation of Pakistan’s petroleum rules.
The controversy surfaced on March 6, 2025, when Phoenix Exploration sold its 73.3 per cent stake in Jura Energy to IDL Investments Limited, a company registered in the British Virgin Islands. According to the Director General Petroleum Concession (DGPC), the transaction was neither disclosed nor approved before execution.
In a show-cause notice issued on July 18, 2025, the DGPC stated that such approval is compulsory under petroleum regulations, which require companies holding petroleum rights to disclose any changes in shareholding, ownership structure, board composition, voting rights, or capital issuance.
The regulator directed Spud Energy, Frontier Holdings and Jura Energy to submit detailed documentation within 30 days, including pre- and post-transaction shareholding structures of IDL Investments, Phoenix Exploration, Jura Energy, PetExPro, Frontier Holdings and Spud Energy. Authorities also sought information on new board appointments, shareholder voting patterns, transaction values, tax filings, and confirmation of capital gains or withholding tax payments in Pakistan.
The notice warned that non-compliance could trigger punitive measures, including suspension or revocation of petroleum rights, citing national security considerations applicable to the oil and gas sector.
Both companies later acknowledged that the transaction had been completed without prior approval. However, despite this admission, the DGPC has not invoked Rule 69(d) of the petroleum rules, which empowers regulators to suspend or cancel licences in cases involving unauthorised transfer of control or interest.
Meanwhile, on October 16, 2025, the Islamabad High Court, in Writ Petition No. 4195/2025, issued a status quo order, restraining all parties from taking any action that could alter the existing shareholding or management control of Frontier Holdings Limited and Spud Energy Pty Limited.
The Petroleum Division has yet to respond to repeated queries regarding the delay in enforcing regulatory compliance or ensuring adherence to the Islamabad High Court’s directives.
Story by Kalbe Ali
