Oil and Gas Exploration sector has made the highest profit repatriation of $42 million in the first two months of the financial year 2019-20 with a modest year-on-year growth of 8 percent, according to State Bank of Pakistan (SBP).
The growth was recorded at a time when other sectors showed a downward trend in sending dividends back to their headquarters. This was largely due to higher crude oil prices which are linked with the pricing formula of these companies operating in Pakistan.
Multinational oil and gas exploration companies and private companies with foreign shareholding continued to expand their operations in Pakistan discovering more oil and gas fields.
These companies invested $21 million from different countries. These include OMV from Austria, Eni Pakistan from Italy, Polish Oil and Gas, Exxon Mobil Corporation, a multinational with headquarters in the USA, etc.
Leading local companies such as Oil and Gas Development Company and Pakistan Petroleum Limited are also doing well, which can be seen from their recent disclosure of profits.
After the oil and gas sector, financial business, including foreign banks, insurance companies recorded profit repatriation of $31.4 million, followed by the transport sector with $30 million.
Overall, profit repatriation of foreign and multinational companies operating in Pakistan continued to shrink as it dropped 9 percent year-on-year in July and August to stand at $214 million. The profit repatriation of these company recorded a massive 21% decline in the last the financial year.
The economic slowdown in the country has taken its toll on foreign and multinational firms and overall businesses in Pakistan. However, recent structural reforms in the economic system are likely to improve the profits and balance sheets of foreign companies, as well as profit repatriation and investment in Pakistan.
