January 23, 2003	Thursday	Ziqa’ad 19, 1423

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ISLAMABAD, Jan 22: The United Arab Emirates is expected to extend its credit facility for oil supplies to Pakistan up to 120 days as a special consideration to help it in building strategic reserves and meet normal refining requirements.

The UAE has also assured Pakistan that it would make investments in multi-million dollar white oil pipeline project and make further investment in Pakistan’s privatization programme in the energy sector. Pakistan is importing around 36,000 barrels of crude oil from UAE nowadays out of the total imports of 159,000 barrels per day.

Pakistan had sought crude oil import from International Petroleum Investment Company (IPIC) of the UAE on six-monthly credit facility for Pak-Arab Refinery Co (Parco) — a joint venture of Pakistan, UAE and Austrian firm OMV, official sources told Dawn.

Pakistan formally approached International Petroleum Investment Company (IPIC) of UAE through its ambassador to UAE Maj-Gen (retd) Salimullah a fortnight ago to seek extension in the credit facility from 30-days to 180 days for Pak-Arab Refinery Co (Parco).

Pakistan was, however, told by the IPIC board that as per policy of Abu Dhabi National Oil Company (ADNOC), no credit facility was extended to any one beyond 30 days yet the IPIC had taken the initiative to extend the agreement to 90 days at its own expense as a special consideration which expired in December last.

The IPIC board members assured the ambassador that they would get the duration increased to 120 days during board meeting scheduled to be held in March.

The IPIC board had also informed Pakistan that they would be coordinating with Omanis who were also keen to invest in white oil pipeline project. The IPIC would also look into further investments in energy sector privatization including Pakistan State Oil (PSO), these sources said.

Parco is getting almost 36,000 barrels of crude oil every day from UAE to meet its refining requirements. Currently Pakistan is also importing around 13,000 barrel crude from Iran besides around 110,000 barrels from Saudi Arabia. Total crude imports are around 159,000 barrels per day nowadays.

With this arrangement, Pakistan is likely to put in place sufficient arrangements for special credit facilities of over $2 billion against its total oil imports of around $3.5 billion expected this year.

Until Jan 10 this year, Pakistan had secured around 50 per cent of its total $3.5 billion oil imports on deferred payments from Saudi Arabia and Kuwait for calendar year 2003.

Total oil imports on deferred payments from these two countries is expected to be cross $1.8 billion mark during 2003 under the revised agreements.

The agreement with Saudi Arabia to be effective from Jan 1, 2003 would cover only crude imports for Pakistan Refinery Limited, and National Refinery Limited.

Kuwait has also agreed to supply furnace oil on 60-day deferred payment basis as their existing 90-day late payment arrangement expired on Dec 31, 2002.

Pakistan’s total oil imports of around 20 million tons are expected to cross $3.5 billion by end of the current fiscal year and could go up further in case the prevailing international price trend continued.

Pakistan wants to curtail the oil import bill and ensure such arrangements that it could easily absorb supply and foreign exchange shocks in case of US war on Iraq.