Home » Economy » Saudi Aramco Acquires 40% Stake in Pakistan Gas & Oil Pakistan Ltd (GO) after CCP Approval
Saudi Aramco Acquires 40% Stake in Pakistan Gas & Oil Pakistan Ltd (GO) after CCP Approval
Saudi Aramco Acquires 40_ Stake in Pakistan Gas Oil Pakistan Ltd GO after CCP Approval

The Competition Commission (CCP) of Pakistan has approved Aramco’s acquisition of a 40% stake in Gas & Oil Pakistan Ltd., one of Pakistan’s largest Oil and Gas companies.

This move marks Aramco’s first entry into Pakistan’s fuel retail sector to grow its global presence by acquiring more distribution channels for its refined petroleum products.

Building on previous $21 billion investments, including Saudi Arabia’s recent  $5 billion investment package for Pakistan, this acquisition further strengthens bilateral ties and underscores Saudi Arabia’s commitment to boosting Pakistan’s economy.

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Enhanced Competition through Aramco

The CCP’s approval of the merger came after a thorough analysis determined that the acquisition would not result in Aramco’s dominance in the relevant market post-transaction. 

Aramco’s entry into Pakistan’s fuel retail market is anticipated to intensify competition, elevate service standards, and provide consumers with a broader range of high-quality petroleum products. 

The Saudi giant’s advanced expertise and cutting-edge technologies are expected to drive innovation and efficiency within the sector, ultimately benefiting end-users.

Expanding Aramco’s Distribution Channels

For Aramco, the approved acquisition of a 40% stake in GO for Aramco represents a significant milestone in its global expansion strategy. 

By securing a foothold in Pakistan’s fuel retail market, the company gains access to a vast network of distribution channels, including over 1,200 retail outlets operated by GO across the country.

Enhancing Consumer Experience

Image Credit Gas Oil Pakistan Ltd GO

The acquisition is expected to boost competition, elevate service standards, and provide consumers with a broader range of high-quality products. 

With GO’s extensive network of downstream fuels, lubricants, and convenience stores, Aramco gains access to significant storage capacity (200,000 MTs) and a fleet of 800 tank trucks, enabling efficient distribution of its refined products and Valvoline-branded lubricants.

Boosting Pakistan’s Energy Infrastructure

Image Credit Aramco

Aramco’s investment in GO is expected to have far-reaching implications for Pakistan’s energy infrastructure. With the influx of capital and expertise from the Saudi energy giant, GO is poised to upgrade and expand its existing facilities significantly.

Potential areas of improvement include enhancing storage capacities, modernizing distribution networks, and implementing advanced technologies to optimize operations. 

These investments will bolster Pakistan’s energy security and contribute to the nation’s overall economic resilience and competitiveness.

Strengthening Bilateral Ties 

Image Credit Aramco

This strategic investment by Aramco is the latest chapter in the longstanding economic partnership between Saudi Arabia and Pakistan. In recent years, the two nations have worked tirelessly to deepen their bilateral ties, focusing on enhancing trade and investment opportunities.

In February 2019, during the visit of Saudi Crown Prince Mohammed bin Salman to Islamabad, the two countries inked investment agreements valued at a staggering $21 billion. 

Among these agreements were plans for Aramco to construct a $10 billion oil refinery and a $1 billion petrochemical complex at the strategically vital Gwadar Port in Balochistan.

Image Credit Ministry of Foreign Affairs

During his recent visit to the Kingdom for a special World Economic Forum meeting, Pakistan’s Prime Minister Shehbaz Sharif held discussions with Saudi ministers, where Saudi Arabia granted a $5 billion package for Pakistan to facilitate investment in the energy sector.

Bolstering Foreign Direct Investment

Image Credit Ali Lodhi

The acquisition of a 40% stake in GO Pakistan by Saudi Aramco is expected to bring much-needed foreign direct investment (FDI) to Pakistan’s energy sector. This strategic move reflects Aramco’s confidence in Pakistan’s economic potential and commitment to its growth. 

Economic experts have hailed the development as a positive for Pakistan, as it will help attract more FDI into the country.

Sustainability at Forefront by Aramco 

Image Credit Aramco

The energy sector is pivotal in driving this transformation as the world transitions towards a more sustainable future. Aramco’s entry into Pakistan’s fuel retail market presents an opportunity to promote sustainable practices and accelerate the adoption of renewable energy sources.

By aligning its operations in Pakistan with global sustainability goals, Aramco can position itself as a leader in the transition towards a greener future while simultaneously contributing to Pakistan’s efforts to mitigate the effects of climate change and promote environmental stewardship.

Expanding Global Footprint 

Image Credit Aramco

Aramco’s 40% stake in Gas & Oil Pakistan Ltd. (GO) acquisition represents a significant milestone in the longstanding economic partnership between Saudi Arabia and Pakistan. 

This strategic investment marks Aramco’s inaugural entry into Pakistan’s fuel retail market and underscores the Saudi energy giant’s commitment to expanding its global footprint and strengthening its international downstream value chain.

More Aramco Ventures 

ARAMCO Global Partnership with FIFA 

A 4-year global partnership has been announced by Saudi Aramco and FIFA, with Aramco now being FIFA’s exclusive worldwide partner in the energy category. 

As part of the sponsorship agreement, Aramco will have the rights to the highly anticipated FIFA 2026 World Cup and FIFA Women’s World Cup 2027. Aramco’s goal is to support the growth of sports on a global scale, in line with FIFA’s mission to host major tournaments and promote grassroots programs.

Title Sponsor of Aston Martin F1

Image Credit Aston Martin

The Aston Martin Formula One Team, headquartered in Silverstone, England, has extended its partnership with Saudi Aramco, who will continue to be its Sole Title Sponsor until 2028. 

Effective January 1, 2024, the team will be referred to as the Aston Martin Aramco Formula One Team. This renewed collaboration signifies a commitment to working together to develop innovative solutions for mobility both on and off the racetrack.

Aramco and Enowa Partnership

Image Credit NEOM

Saudi Aramco and Enowa, the energy and water company of NEOM, has agreed to build a synthetic e-fuel plant in NEOM. 

This plant aims to produce 12 tonnes of synthetic methanol per day using green hydrogen and captured CO2, with a strong emphasis on promoting the circular carbon economy and reducing CO2 emissions. 

The e-fuel facility will showcase the technical feasibility and commercial viability of a synthetic gasoline value chain. This project is a prominent endeavor in Aramco’s wider endeavors in researching, developing, and demonstrating low-carbon synthetic fuels.

Keep Reading: Saudi ARAMCO Announces 4 Year Global Partnership with FIFA

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