Aramco said on its website that it has finalized agreements to purchase a 40% ownership position in Gas & Oil Pakistan Ltd. (“GO”), marking a significant milestone in the company’s history.
Saudi Aramco Plans To Buy 40% Stake in GO Petroleum
One of Pakistan’s biggest retailers and storage organizations is GO, which operates a variety of downstream fuels, lubricants, and convenience outlets.
According to GO’s website, it has more than 1,100 retail locations across Pakistan that sell gasoline, diesel, and lubricants.
However, regulatory approvals and other customary criteria are among the conditions that apply to this transaction.
Moreover, with the proposed acquisition, Aramco will make its first foray into the retail fuels market in Pakistan, furthering its global aim to fortify its downstream value chain.
“This transaction would enable Aramco to secure additional outlets for its refined products and further provide new market opportunities for Valvoline-branded lubricants, following Aramco’s acquisition of the Valvoline Inc. global products business in February 2023,” it added.
Mohammed Y. Al Qahtani, Aramco Downstream President Statement
Mohammed Y. Al Qahtani, Aramco Downstream President, said, “Our second planned retail acquisition this year aligns with Aramco’s downstream expansion strategy, with a clear path ahead for growing an integrated refining, marketing, lubricants, trading and chemicals portfolio worldwide.
GO has a significant storage capacity, high-quality assets and growth potential, which will help launch the Aramco brand in Pakistan.”
Furthermore, experts in economics praised the move as beneficial for the financially struggling nation in South Asia.
“From the economic front, this is definitely a positive,” Mustafa Pasha, Chief Investment Officer at Lakson Investments said.
Moreover, Pakistan has been utilizing loans to pay down its debt, which is unsustainable, according to the analyst.
“The only sustainable way to reduce the debt is by increasing exports or attracting FDI from abroad,” said Mustafa Pasha.
Experts Opinion
However, Amreen Soorani, Head of Research at JS Global, voiced similar opinions.
“Transactions like these would pave way for other large companies to invest in Pakistan,” she said.
One of the nation’s biggest challenges has been luring foreign direct investment (FDI), which came in at $525 million from July to October of FY24 compared to $490 million during the same period in FY23, an increase of $35 million.
Furthermore, he did point out that Pakistan’s current FDI model has to modify.
“It needs to be less extractive,” he said.
“The announcement by Aramco can have a knock-down effect, leading to greater interest from other global players.
The thing to see now is that the upcoming investment is put to productive use and used as a showcase for other investors,” added Pasha.
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