Staff Report
ISLAMABAD:
The Directorate General of Petroleum Concessions (DGPC), working under the Ministry of Energy (Petroleum Division), has issued show-cause notices to Spud Energy Pty Limited (SEPL), Frontier Holdings Limited (FHL), and their parent company Jura Energy Corporation (JEC) over an alleged unauthorized transfer of controlling shares — a move that could potentially violate Pakistan’s Petroleum Rules of 1986 and 2001.
The action stems from a transaction dated March 6, 2025, in which a 73.3 percent controlling share in JEC was reportedly sold by Phoenix Exploration to IDL Investments Limited, a British Virgin Islands-registered firm. This transfer was neither reported to the DGPC before nor after the transaction, as mandated under Rule 68(d) and Rule 69(d) of the applicable Petroleum Rules.
According to the DGPC’s official notice issued on July 18, the companies were obligated to seek prior consent from the government before any change in effective control or shareholding structure. The DGPC learned about the transaction not from the concerned companies but through a letter dated May 2, 2025, from Transparency International Pakistan (TIP), which raised serious concerns about the undisclosed deal.
The notice emphasized that any change in a company’s board or ownership, especially in the strategic oil and gas sector, must be pre-approved to safeguard national interests. The government is particularly cautious about preventing foreign influence from countries considered hostile to Pakistan, such as India and Israel.
By bypassing the DGPC and failing to obtain prior approvals, the companies may have breached Good Oil Industry Practices as outlined in the Petroleum Rules and Petroleum Concession Agreements (PCAs). The DGPC has demanded detailed documentation from SEPL, FHL, and JEC within 30 days. This includes pre- and post-transaction ownership charts, new board appointments, tax filings, and payment records related to capital gains or withholding tax in Pakistan.
Additionally, the DGPC has asked the companies to explain how the 2025 transaction differs from a 2012 change of control case in which a No Objection Certificate (NOC) had been granted for the transfer of FHL’s ownership from JEC to Eastern Petroleum Limited, Mauritius.
Failure to comply within the stipulated timeframe may result in serious consequences, including the revocation of petroleum rights. However, the DGPC has also provided the companies (SEPL, FHL and JEC) with an opportunity to appear for a personal hearing, should they wish to present their side of the case.
