ISLAMABAD: Pakistan and Russia are actively negotiating the structure of a deal for the import of Russian oil by Pakistan amidst concerns about potential secondary US sanctions on such transactions, Minister for Petroleum Musadiq Malik said on Wednesday.
In a media talk, he said he could not disclose the oil price from Russia and such deals structure involves multiple factors such as insurance, re-insurance, shipping line, size of the ship as Pakistani seaports are not catered for big ships.
In first tenure of Pakistan Democratic Movement (PDM), he said it was decided to import Russian oil through establishing special purpose vehicle (SPV) in a public sector company and payment would be made in Chinese currency; however, caretaker government amended the framework and halted the negotiation to import oil from Russia, the minister explained.
He said Pakistan State Oil (PSO)’s refinery Pakistan Refinery Limited (PRL) imported a cargo of oil from Russia but later caretaker government decided not to import oil through the public sector company but private sector was allowed to import the oil.
Malik categorically denied media reports claiming that Pakistan had reached a deal with Russia to import crude oil at a discounted rate.
Responding to a question regarding recent visits of delegations from Saudi Arabia, he said that 34 MOUs worth $2.7 billion have been signed in various sectors including human resource with Saudi Arabia among private sector. A total of seven agreements were signed, he added. He said that five LNG cargos schedule for next year (2025) from Qatar under long-term agreements were cancelled and negotiation was under way to defer five additional cargos to address surplus LNG in the country.
“Pakistan has already postponed five of its LNG cargoes and the postponement of five additional cargoes is being considered further,” he added.
Revealing the factors contributing towards the LNG surplus, he cited the lack of purchase by the power plants and said that the private sector was not buying LNG due to high cost. He maintained that five Saudi companies participated in a road-show held by PRL in Saudi Arabia, with one of them expressing interest in investing $1.7 billion in PRL upgradation under brown filed oil refineries policy. Malik added that a road-show for establishing a new refinery worth $8 to 10 billion in Pakistan would be held in Saudi Arabia soon.
The Petroleum Ministry is currently working on the road-show for the Greenfield refinery project, he noted.
Reuters adds: Russia and Pakistan discussed cooperation on oil and gas offshore exploration and refining at intergovernmental meetings this week in Moscow, the Interfax news agency reported, citing Russia’s deputy energy minister.
Talks also covered the prospect of Russia supplying Pakistan with crude oil and grains, according to the report.
“Yesterday we received a rather interesting proposal from Pakistan in the area of offshore oil and gas exploration, increasing oil recovery at mature fields, and in oil refining,” the deputy minister said.
“We export food and agricultural products, (and) expect the resumption of grain supplies. We positively assess the growth in exports of Russian-made mineral fertilizers to Pakistan that has emerged this year,” Marshavin said, according to Interfax.
Moscow and Islamabad have been discussing long-term crude oil supply deals during recent meetings. Russia started regular oil supplies to Pakistan in 2022 as an EU embargo on Moscow’s energy supplies pushed it to seek new buyers for its fuel. “There are stable deliveries of Russian oil to Pakistan... Work is underway to increase such deliveries and diversify commodity groups,” Roman Marshavin said, according to the report.
Copyright Business Recorder, 2024
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