KARACHI - Shell Pakistan said on Wednesday its parent company, Shell unit Shell Petroleum Company, would be exiting Pakistan with the sale of its 77% shareholding in the business.

The move came after Shell Pakistan (SPL) suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables, and as the country faces a financial crisis and economic slowdown.

"To support its intention to high-grade and simplify its portfolio, Shell Petroleum Company Ltd... has initiated a sales process to sell its 77.42% shareholding in Shell Pakistan Ltd," a spokesperson for Shell Pakistan said in an email to Reuters.

That includes "all of SPL’s Downstream businesses and SPL’s 26% ownership of Pak-Arab Pipeline Company Ltd (PAPCO)," the spokesperson added. Its Downstream businesses include Mobility and Lubricants.

SPL is listed on the Pakistan Stock Exchange. The company said in a notice to the exchange that the announcement "does not impact SPL's current business operations, which continue".

It said in the notice that Shell Petroleum Company had notified its board of directors of its intention to sell the holding in a meeting on June 14.

"Shell has entered into a process and wants to be transparent," the spokesperson said.

"These decisions are not taken lightly, and Shell’s focus will now be on pursuing a safe and smooth divestment and continuing to deliver safe, reliable operations."

(Reporting by Ariba Shahid; Writing by Sakshi Dayal and Gibran Peshimam; Editing by Louise Heavens, David Goodman, David Evans and Jan Harvey)