ISLAMABAD: Six months of administrative silence have followed the Petroleum Division’s crackdown on energy firms accused of illegal management takeovers. While the government initially moved to penalize unauthorized changes in control, its failure to finalize action has raised questions about the oversight of the country’s most sensitive industry players.
Dawn news reported that the parent companies of Spud Energy Limited and Frontier Holdings Limited offloaded their interests without formal approval from relevant authorities, a violation of national regulations.
The controversy began on March 6, 2025, when Phoenix Exploration sold its 73.3 per cent stake in Jura Energy to IDL Investments Limited, a firm registered in the British Virgin Islands.
On July 18, 2025, the Director General Petroleum Concession (DGPC), under the Ministry of Energy’s Petroleum Division, issued a show-cause notice stating that the transaction was “neither disclosed nor approved prior to execution”, as required under Pakistan’s petroleum rules.
Under these rules, companies holding petroleum rights are obligated to disclose changes in shareholding, the issuance of new capital, board appointments, voting rights, and corporate structure.
The DGPC directed Spud Energy, Frontier Holdings, and Jura Energy to submit comprehensive documentation within 30 days. Required disclosures included detailed shareholding structures of IDL Investments, Phoenix Exploration, Jura Energy, PetExPro, Frontier Holdings, and Spud Energy, both before and after the transaction.
Regulators also requested details on new board appointments, shareholder voting patterns, transaction values, tax filings, and confirmation of whether capital gains or withholding taxes were paid in Pakistan.
The notice warned that failure to comply could result in punitive action, including the revocation of petroleum rights. The requirements are part of national security considerations used to evaluate companies operating in the country’s oil and gas sector.
Both companies have admitted that the transaction took place without prior approval. However, the DGPC has not initiated enforcement action under Rule 69(d), which empowers the regulator to suspend or revoke licences in cases of unauthorised transfer of control or interest.
On Oct 16, 2025, the Islamabad High Court (IHC) issued a status quo directive in response to Writ Petition No. 4195/2025. The court also restrained all parties from taking any action that could alter the existing shareholding or control structure of Frontier Holdings Limited and Spud Energy Pty Limited.
The Petroleum Division has not responded to inquiries regarding the delay in enforcing compliance with petroleum rules or ensuring adherence to the IHC directions.
It is pertinent to mention that in July 27,2025, the DGPC has issued show-cause notices to two petroleum companies, Spud Energy Pty Ltd (SEPL) and Frontier Holdings Ltd (FHL), for failing to disclose recent changes in their ownership structures.
The Petroleum Division has emphasised that any change in a company’s ownership or board must receive prior approval from the division, as well as from relevant regulatory authorities. The companies were warned that their operational licences could be revoked if they did not respond to the notices by August 18.
