In a significant move, Aramco, a global leader in integrated energy and chemicals, announced on Tuesday the signing of definitive agreements to acquire a 40 percent stake in Gas & Oil Pakistan Ltd. (GO). This announcement marks Aramco’s entry into the Pakistani fuel retail market, enhancing its international downstream value chain.
GO, a leading Pakistani retailer and storage company operates over 1,100 outlets offering petrol, diesel, and lubricants. The transaction’s completion is contingent on standard conditions, including regulatory approvals.
This acquisition represents Aramco’s first foray into Pakistan’s fuels retail sector. It also serves as a strategic step following its acquisition of the Valvoline Inc. global products business in February 2023, enabling Aramco to expand the distribution of its refined products and Valvoline-branded lubricants.
Mohammed Y. Al Qahtani, Aramco Downstream President, emphasized that this acquisition aligns with Aramco’s strategy to grow its global refining, marketing, lubricants, trading, and chemicals portfolio. He noted GO’s significant storage capacity, high-quality assets, and growth potential as key factors in introducing the Aramco brand in Pakistan.
Economic experts have positively received the development, seeing it as beneficial for Pakistan’s economy. Mustafa Pasha, Chief Investment Officer at Lakson Investments, commented on the unsustainable nature of Pakistan’s debt repayment strategy, emphasizing the necessity of increasing exports or attracting Foreign Direct Investment (FDI) for sustainable debt reduction.
Echoing Pasha’s sentiments, Amreen Soorani, Head of Research at JS Global, noted that such transactions could encourage other major companies to invest in Pakistan. She highlighted the country’s struggle to attract FDI, despite a modest increase from Rs.490 million to Rs.525 million in the July-October period of FY24 compared to the same period in FY23.
Pasha also called for a change in Pakistan’s FDI model, urging for a less extractive approach. He anticipates that Aramco’s announcement could spur interest from other global players, emphasizing the importance of utilizing upcoming investments productively and showcasing them to potential investors.
