Saudi Arabia has sought acceptable rate of return based on size of the potential investment in crude oil refining, marketing, distribution and related downstream sectors subject to applicable laws and regulations both in Pakistan and Saudi Arabia, well-informed sources in Petroleum Division told Business Recorder.
Recently, Prime Minister Imran Khan visited Saudi Arabia wherein he discussed issues related to economic development of the country with special reference to the Pak-Saudi relationship.
In the wake of this visit by the Prime Minister, a Saudi delegation visited Pakistan and proposed an MoU for cooperation in the field of oil and gas through respective state owned nominated commercial entities. Pakistan State Oil Company Ltd (PSO) has been proposed to be nominated as the commercial entity from Pakistan side and Saudi Aramco was nominated as Saudi commercial entity.
In the light of discussions, a draft MoU was prepared and finalised by the representatives of Government of Pakistan and Saudi Arabia.
The non-binding Memoran-dum of Cooperation and Understanding (MoU) was signed in Islamabad by Saudi Arabia and Pakistan.
According to the MoU, whereas the parties intend to promote their commercial goals and enhance their mutual interests through exploring and advancing investment opportunities for their respective commercial benefits; and whereas Government of Pakistan had proposed to Saudi Arabia opportunities for Saudi companies to invest in the Pakistan energy markets and petrochemical sectors by utilizing Saudi Arabian crudes.
Now, therefore, in the spirit of promoting this collaboration and understanding in all pertinent matters, the parties agreed on the following
Article 1 (objective): The MoU sets forth the parties'' basic understanding with respect to the objectives and scope of the collaboration. Specifically, the parties desire to work together, either bilaterally or in coordination with the related government and nominated state owned entities. PSO and Saudi Aramco will conduct study investment opportunities in the refining/ chemicals, distribution, marketing and related downstream sectors in order to evaluate the economic and technical feasibility of these opportunities in Pakistan while taking into account all logistical and regulatory factors including: (i) securing favourable investment incentives for an acceptable rate of return based on size of the potential investment; (ii) the allocation of appropriate lands to accommodate the initial investments and any potential expansions; (iii) the allocation of appropriate easement and entry rights to freely access the investment sites and freely transfer the feedstock and products to and from such site, including via roads, vessels, pipelines and any other means of transfer and transportation in the country; (iv) the allocation of appropriate tax exemption as per policy; (v) the allocation of natural gas as feedstock for refining activities at mutually agreed prices; (vi) facilitating obtaining adequate assurance that the necessary infrastructure for the success of any potential investment will be made available including the ability to utilize existing and upcoming power and infrastructure developments; (v) facilitating access to regional demand centres and marketing outlets; (vi) facilitate obtaining the requisite licences and government approvals to enter the refining, distribution and marketing sectors in all regions of the country as per applicable laws; (vii) encouraging the participation of third party investors in the proposed investment opportunities, subject to the approval of both parties; and (viii) ensuring that the investments attract international financing at competitive terms.
Article 2( areas of cooperation): Facilitation related to the collaboration may include, but not limited to, the following, (i)( study visits between the parties, in coordination with related government and commercial entities and the exchange of specialists and researchers based on the resources availed by each party; (ii) the exchange of information and lessons learned in fields of mutual interest within the scope of the MoU; and (iii) engagement on joint studies in areas that improve the level of collaboration and realise the goals of the MoU.
Article 3( means of cooperation): Parties intend to draw upon their mutual resources and expertise to undertake studies and activities in areas of shared interest within the scope of this MoU and coordinate with the related governmental and commercial affiliated entities, to assist the parties in promoting investment opportunities in Pakistan especially in the refining of Arabian crude, distribution, marketing and related downstream sectors, subject to the laws and regulations in force and applicable in Saudi Arabia and Pakistan.
Article 4(confidentially): Unless expressly authorised in this MoU, the parties undertake not to disclose the terms of, and/or any information exchanged pursuant to this MoU to any third party without express written consent of the other party. Notwithstanding, both parties may disclose any or all information associated with the matter of this MoU to their relevant Ministries and board members.
This MoU shall come into force on the Effective Date and shall remain in effect unless terminated by either party, with or without cause, pursuant to a written notice, while the commitments made herein do not create any binding obligations on the parties or their respective governments and affiliates, the parties nevertheless sign this MoU in recognition of their common interest and as a token of mutual goodwill and understanding
Article 6 (Settlement of Disputes):Under this MoU and any disputes arising thereto shall be governed and Interpreted in accordance with the laws of England and Wales without regard to any conflict of law provisions.
Article 7 (Implementation of MoU): In order to ensure the effective implementation of and coordination under this MoU the Parties shall designate their representative Focal Points.
Article 8: This MoU constitutes the entire understanding of the parties in respect of the subject matter contained herein and there are no restrictions, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof, other than those expressly set forth or referred to herein. This MoU supersedes all previous agreements and understandings between the parties with respect to the subject matter.
Article 9 (Amendment or Modification): This MoU may not be amended, modified, supplemented, waived or violated except as expressly consented to in writing by both parties. Neither party may transfer or act on any rights or obligations arising out of this MoU, in whole or in part, without the prior written consent of the other party.
Comments
Comments are closed.