Saudi oil on easy terms: minister says ‘high-ups’ stopped talks

ISLAMABAD: Petroleum Minister Ghulam Sarwar Khan on Thursday disclosed that he was stopped by ‘high-ups’ from discussing oil supply on deferred payment with a Saudi delegation led by energy adviser Ahmad Hamed Al-Ghamidi.

Speaking at a joint news conference with Information Minister Fawad Chaudhry after a meeting of the federal cabinet, Mr Khan said he had told journalists outside the Parliament House before holding talks with the visiting delegation that he would discuss oil refinery, exploration blocks, pipelines and oil supplies on deferred payments.

However, “the high-ups asked us not to take up” the issue of oil on deferred payments with the delegation, he said without naming anybody. “Therefore, we neither discussed oil supplies on deferred payments nor they declined,” he said, referring to media reports that such a request was turned down by the Saudis.

The minister also clarified that the two sides had agreed in principle that the kingdom would set up a refinery at Gwadar, but its refining capacity and investment figures had not been discussed at this stage. In initial discussions, it has been agreed in principle that it would be a government-to-government agreement for which Riyadh has nominated the largest firm Saudi Aramco and Pakistan has designated the Pakistan State Oil (PSO).

Sarwar says MoU about Gwadar oil refinery will be signed during the visit of Saudi Arabia’s energy minister soon

He said the two sides finalised a memorandum of understanding (MoU) for the oil refinery at Gwadar after the Saudi delegation visited the new port and liked the site allocated for it. He said the federal cabinet led by Prime Minister Imran Khan approved the MoU that would be signed during the upcoming visit of the Saudi energy minister to Pakistan by the end of this month or early next month.

He said the Saudi leadership told the prime minister during his recent visit to the kingdom that they had been offering investment and trade cooperation to previous governments as well, but they were not forthcoming to avail the opportunity. He said it was a positive sign that huge Saudi investment would now be coming to Pakistan.

Responding to a question, the petroleum minister said the Saudi delegation found the Gwadar deep seaport feasible and had agreed to set up a state-of-the-art oil refinery immediately.

Other terms regarding the capacity, cost and other modalities of the refinery will be jointly decided by both the countries. The location and the land have been earmarked for the refinery and the provincial government would also be taken on board in this respect.

Mr Khan said he also noticed some adverse reports and wanted to dispel the impression that China had shown any concern regarding the establishment of an oil refinery by Saudi Arabia. “China has no concern on it,” he said, adding that Pakistan required 4-5 mega oil refineries and any country could invest and some of them were already looking into the opportunities. “We want all to invest here whether they are Chinese, Saudis, the UAE, Russia or any other country. The UAE has already signed MoU for Khalifa Refinery in upcountry,” he said.

He said Pakistan also offered investment opportunities to Saudi Arabia, including South-North and North-South pipelines that would be multiple pipelines to be used for clean oil, crude oil or gas.

The previous government primarily concentrated on LNG import and exploration for local oil and gas finds and production were ignored. Aimed at exploration and developing domestic oil and the gas sector, the government is going to offer 10 oil and gas blocks initially for competitive bidding in November.

He said there were 46 exploration blocks in all provinces and one in Islamabad Capital Territory which would be offered for bidding later. The Saudi government has been especially invited to invest in them as they have good experience in drilling and exploration.

The petroleum minister said that despite increase in the price of crude oil in international market, the government was providing relief to people on petroleum prices. The present government kept oil prices unchanged for two months. By not increasing petroleum prices for October it will absorb a loss of Rs8bn.

He said the petroleum prices were still cheaper in Pakistan than India. India is relatively stable economy than Pakistan but HSD was Rs129.65 per litre against Rs106.57 per litre in Pakistan. Similarly, Motor Gasoline was sold for Rs144.02 per litre in India compared to Rs92.83 per litre in Pakistan, he said.

He said as a cabinet member he will request the prime minister to order the forensic audit of Neelum Jhelum, Islamabad Airport and Pakistan Steel Mills and other big projects whose costs had multiplied. He said anybody responsible for these losses, whether in military government, the Pakistan Peoples Party or Pakistan Muslim League-N government, would be held accountable and taken to task.

Published in Dawn, October 5th, 2018



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