Early on Thursday Supreme Court ordered a delay to the privatisation until it rules on whether a Saudi-backed firm can enter the bidding, but a spokeswoman at BP's office in Karachi said the decision to pull out was taken before the court order.
"The decision was made without any regard to the Supreme Court decision," the spokeswoman told Reuters. The sale of all but 3 percent of the government's 54 percent stake in the country's top oil marketing company had been expected to fetch up to $800 million.
"As part of a regular review of our global refining and marketing business we have concluded that, whilst very attractive, this is not the right time for us to pursue this option. We have therefore informed the Pakistani government and our bidding partners of our decision to withdraw," BP said in a statement emailed to Reuters.
BP Plc was set to bid for the stake in a consortium with Kohinoor Group. The statement said that the decision was based "solely" on a review of the growth opportunities. BP's decision and the court order were just the latest blows to privatisation process.
"Obviously this is bad news for the privatisation process, since it's a mega transaction of $700-800 million; investors take into account such delays," said Mohammed Sohail, director equity at JS Global Capital Ltd. Another analyst saw repercussions for other energy firms tagged for privatisation, like Oil and Gas Development Co and Pakistan Petroleum Ltd.
"We might see selling in PSO and other stocks which are in line for privatisation, like PPL and OGDC, but the overall sentiment in the market is far too strong to be hurt at this point," said Ali Hussain , head of research at Invest Capital and Securities. The Attock Group is backed by the Pharaon Group of Companies, whose sponsor is Saudi investor Ghaith R. Pharaon.
Six other parties selected to bid include Saudi-based Aljomaih Holding Co with Kuwait's Noor Financial Investment Co and Fauji Foundation; Saudi Dabbagh Group Holding with Savola Group and Goldman Sachs (Asia); and Bakri International Energy Systems with Salsal Petroleum.
Pakistan's MCB will bid with Malaysian oil group Petronas, while other bids are due from Swiss firm Vitol SA and TransAsia Gas International. According to industry sources, Vitol is likely to join forces with Fauji Foundation, a trust for retired members of the armed forces and their families, making it a strong contender.