ISLAMABAD: An eight-member Pakistani delegation is set to pay visit to Saudi Arabia in the near future in order to discuss and finalize a new refinery project prior to the likely visit of Saudi Crown Prince Muhammad Bin Salman (MBS) to Pakistan in November, 2022.
Sources in petroleum division informed Pakistan Today that the finance division has asked the petroleum division to give details of TA/DA in respect of the delegation for the said visit including the foreign exchange component which is mandatory requirement as per para 7 of the Cabinet Division instructions on visits abroad dated 26-10-20218. Similarly, the finance division has sought from the petroleum division to provide details of previous visit(s) abroad undertaken by the members of the delegation during the last 12 months, sources added.
“Pakistani delegation will visit Kingdom of Saudi Arabia (KSA) in the near future and this delegation during this visit will meet with Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman, Saudi officials of energy ministry, officials of Saudi Aramco etc mainly to discuss and finalize a multi-billion-dollar deal for an oil refinery project ahead of Saudi Crown Prince’s likely trip to Pakistan in November, 2022,” said the sources.
The sources said an eight member Pakistani delegation headed by Minister of State, Petroleum Division, Dr Mussadik Malik is set to visit to Saudi Arabia in the near future in order to discuss and finalize a multi-billion-dollar deal for an oil refinery project (Saudi Aramco Refinery Project) that had stalled for the past several years. And, the finance division has sought details regarding the members of the delegation.
Other members of the delegation include Muhammad Mahmood, Secretary, Petroleum Division, Shehbaz Tahir Nadeem, Joint Secretary, Petroleum Division, Muhammad Iqbal, Director General (Minerals) Policy Wing, Petroleum Division, Dr Sajjad Ahmad, Director General Geological Survey of Pakistan (GSP), Policy Wing, Petroleum Division, Dil Nawaz, DG (Oil), Syed Muhammad Taha, Managing Director, Pakistan State Oil (PSO), and Shahid Mahmood Khan, MD, Pak-Arab Refinery Company (PARCO).
They added that a major breakthrough/announcement regarding setting up a new refinery in Pakistan with the cooperation of Saudi Arabia is likely during the Crown Prince’s upcoming visit to Pakistan.
As per sources, Pakistan and the Kingdom of Saudi Arabia are inching towards signing a multi-billion-dollar deal for an oil refinery project that was stalled for the past several years. They said that teams from Pakistan and Saudi Arabia have already been engaged in a series of meetings to finalise a commercial deal on the project.
They said former petroleum minister and current Chairman of the Energy Task Force, Shahid Khaqan Abbasi has also been playing a great role in finalizing negotiations with the Saudi government on incentives for KSA after setting up a new refinery in Pakistan. This visit of the Pakistani delegation is also expected to bring fruit by settling the issue of incentives including deemed duty on petrol and high speed diesel (HSD) with the Saudi government, said sources.
“Once both sides finalize the incentives for setting up new refinery then these incentives will be incorporated in the new refinery policy 2022 which would then be sent for approval to the Economic Coordination Committee (ECC) and the cabinet,” said the sources.
Reportedly, in January 2019, Saudi Arabia’s Energy Minister Khalid Al-Falih during his visit to Pakistan announced the project and said that they were planning to set up a $10 billion oil refinery in Pakistan’s deep-water port of Gwadar. However, the plan was shelved due to financial viability issues.
During the Saudi Crown Prince Mohammad bin Salman’s visit to Pakistan in February 2019, an investment package worth $20 billion was announced. As part of this package, $10 billion was to be allocated to setting up the mega oil refinery in Gwadar. However, due to differences with the Pakistan Tehreeki-Insaaf (PTI) government, a bailout package worth $3.2 billion was returned. Following this development, the country also decided to shelve the mega oil refinery project.
It is also learnt from sources that another reason for the failure of the refinery deal was the absence of a pipeline that could help transport oil from the refinery to different parts of Pakistan, which would require an additional investment of around $2 billion.
However, the incumbent coalition government after it came into power has expedited work on the energy projects which Saudi Arabia had planned in Pakistan. Similarly, Prime Minister Shehbaz Sharif has given sincere instructions to the Petroleum Division to materialize the refinery deal as early as possible.
