ISLAMABAD: Transparency International Pakistan (TIP) has requested the Prime Minister’s Office to initiate an investigation into the alleged violation of the Pakistan Petroleum Rules, 2001, in the disposition of controlling shares of two petroleum exploration firms—SPUD Energy Pty Ltd and Frontier Holdings Limited (FHL).
In a formal letter dated May 2, 2025, TIP raised concerns over the alleged transfer of controlling shares in the two companies without prior government approval, a move that, if confirmed, would violate Rule 69(d) of the Pakistan Petroleum (Exploration and Production) Rules, 2001.
According to Rule 69(d), companies must obtain prior consent from the government before proceeding with any disposition of controlling interests. The rule states: “Without the prior consent of the Government, there shall be no disposition of the share capital of the holder or its parent company in consequence of which any person who, prior to that disposition, had effective control of the holder or its parent company ceases to have such effective control.”
TIP stated that SPUD and FHL are linked to Jura Energy Corporation, which recently saw a controlling interest shift from Phoenix Holdings Ltd to IDL Investments Ltd. It alleged that this transaction occurred secretly, without notifying or securing consent from the Petroleum Division.
The watchdog also cited past regulatory violations by SPUD and FHL, including a government-ordered recovery of Rs1.3 billion in unpaid royalties. TIP warned that failure to act on this latest development could set a dangerous precedent, undermine regulatory authority, and compromise Pakistan’s energy sovereignty.
However, both SPUD Energy and FHL have strongly denied any legal breach.
In detailed responses, the companies stated that no recent change in their direct ownership or control had occurred. They clarified that IDL became the majority shareholder of Jura Energy Corporation on March 6, 2025. However, since the change took place at a level above the immediate holding companies (SPUD and FHL), no prior government consent was required under the applicable petroleum rules.
The companies explained that in the case of FHL, Rule 69(d) of the 2001 Petroleum Rules applies solely to changes in the shareholding of FHL itself or its direct parent company, not to entities further up the ownership chain. Similarly, for SPUD Energy, governed under the 1986 Petroleum Rules, the relevant provision is Rule 68(d), which follows the same principle.
Accordingly, they argued that the share transaction involving Jura Energy Corporation—where Phoenix Holdings transferred its controlling stake to IDL Investments Ltd—did not constitute a direct change in control of either FHL or SPUD. Therefore, no government approval was necessary under the legal framework.
Calling TIP’s allegations “baseless and misleading,” the companies asserted that the transaction was fully transparent and had already been disclosed via stock exchange filings in Canada, where Jura is listed.
Repeated attempts were made to contact the Secretary of the Petroleum Division and the Director General Petroleum Concessions (DGPC) for their official response. However, no reply was received from either office by the time this report was filed.
