Key Takeaways
- The Petroleum Division has asked the Economic Coordination Committee to decide on the ownership change of JURA Energy Corporation.
- Two companies, Spud Energy Pty Limited and Frontier Holdings Limited, hold petroleum rights in Pakistan.
- The government is considering regularizing the transaction or revoking the companies' petroleum rights.
The government has requested the Economic Coordination Committee (ECC) to decide on the ownership change of JURA Energy Corporation, involving two companies, Spud Energy Pty Limited (SEPL) and Frontier Holdings Limited (FHL).
These companies hold petroleum rights in Pakistan, and the issue has arisen due to a 73.3 percent stake acquisition by IDL Investments Limited in JURA Energy Corporation, the Canadian-listed ultimate parent of SEPL and FHL.
The Petroleum Division has presented two options to the ECC: revoking the companies' petroleum rights or regularizing the transaction after issuing a warning.
The division supports the second option, arguing that the transaction occurred at the ultimate-parent level and that existing petroleum rules do not clearly prohibit such transactions.
The companies had previously received show-cause notices over the transaction, arguing that the relevant petroleum rules apply to changes in ownership or control at the petroleum-right holder or parent level, rather than transactions involving an ultimate parent.
The Petroleum Division has challenged this interpretation, citing Rule 69(d) of the 2001 petroleum rules, which refers to the share capital of a rights holder or its parent company.
The Law Division has advised that the matter should be assessed separately for each petroleum block, as different regulatory regimes may apply. Prior government consent is required where a share transfer results in a change in effective control.
The Petroleum Division has warned that cancellation of the petroleum rights could have serious consequences, including possible international arbitration.
