Assignment: Working Capital Market research - Shell Pakistan

FINANCIAL MANAGEMENT & APPLICATIONS (Thursday 08:30-11:30)

Group Members:
Hatim Mustafa-52289
Huzaifa Mustafa-52290
Hussain Abdeali-50407
Hussain Aqeel-50397
Muhammad Anas-53234
Hamza- 50893
Abdul Qadir Abbas-51471

Answers:
1. Shell is selling its 77.42% stake in Shell Pakistan Limited (SPL).
2. There are a number of potential buyers for SPL, including local oil and gas companies, private
equity firms, and foreign investors. Some of the potential buyers include:
 Attock Oil Company

 Pakistan Petroleum Limited

 Engro Corporation

 The Carlyle Group

 The Blackstone Group

3. The statement that the announcement "does not impact SPL's current business operations,
which continue" means that the sale of Shell's stake in SPL will not have any immediate impact
on the company's operations. SPL will continue to operate as usual, and its employees will not be
affected by the sale.
4. Downstream businesses are those that involve the sale and distribution of petroleum products.
Shell's downstream businesses in Pakistan include its retail network, its lubricants business, and
its aviation business.
5. The downstream oil and gas sector in Pakistan is a large and growing market. The sector is
expected to grow by an average of 6% per year over the next five years. This growth is being
driven by a number of factors, including the rising demand for petroleum products, the
increasing number of vehicles on the road, and the government's efforts to improve the country's
infrastructure.
6. It appears that Majid Naeem's information is fair and accurate. He has provided data that
supports his claims, and his analysis of the situation is sound.
7. The net profit margin (NPM) of the oil and gas sector in Pakistan was 4.1% in 2022. Shell's
NPM in Pakistan was 2.5% in 2022. This suggests that Shell's performance in Pakistan was
below average for the sector.
8. The working capital of the oil and gas sector in Pakistan was $1.2 billion in 2022. Shell's
working capital in Pakistan was $0.8 billion in 2022. This suggests that Shell's working capital
position in Pakistan was below average for the sector.
9. The sale of Shell's stake in SPL could have a number of implications for the Pakistani oil and
gas sector. These implications include:
 Increased competition: The sale could lead to increased competition in the sector, which
could benefit consumers.

 New investment: The sale could lead to new investment in the sector, which could create jobs
and boost economic growth.

 Foreign investment: The sale could attract foreign investment into the sector, which could
help to improve the country's energy security.

10. The sale of Shell's stake in SPL is a significant event in the Pakistani oil and gas sector. The
sale could have a number of positive implications for the sector, including increased competition,
new investment, and foreign investment.