KARACHI, July 26: Pakistan State Oil is planning to set up a major refinery in the country.

“The refinery will have a refining capacity of 150,000 barrels of crude oil per day,” PSO managing director Tariq Kirmani said in an address to PSO employees on Friday at the PSO House.

He said the refinery project would cost $1.4 billion. “We will move fast and meet the country’s requirements with lot of savings in foreign exchange on imports of finished product.”

The MD said PSO had a large product requirement. “We need a refinery project of our own in order to ensure availability of products for all times to come,” he said. “We can do it soon.”

However, a PSO press release has been silent as to where the mega refinery is being set up. The statement also did not reveal about the project detail whether it would be a joint venture or not.

It is quite a surprising news from the PSO for setting up of a refinery when the country’s giant oil marketing company (OMC) is heading for privatization.

According to Invest Cap and Securities, the Privatization Commission chief had already said that a period of eight weeks would be provided to the three bidders after the official announcement of the bid date. Considering this, there are chances of PSO’s bidding to be scheduled by the end of September or early October.

Recounting the recognition PSO had received during the last financial year that ended June 30, 2003, the managing director said the company had become a member of the World Economic Forum, while the Wharton Business School of the University of Pennsylvania and top management expert Professor Roderick Martin had sought to conduct separately case studies of PSO’s turnaround.

He said the company had ended the financial year 2002-03 with flying colours. He said as far as white oil products were concerned, the industry had grown by 2.5 per cent, while the company had achieved a growth of 4.8 per cent and its market share was increasing.

Mr Kirmani said as far as black oil products were concerned, PSO had a monopoly and that had now ended. This is because of deregulation, increased availability of gas to IPPs, availability of hydel power and less fuel offtake by Hubco and other power projects.

He said during the last financial year PSO had won railways, defence and Pakistan Steel contracts. PSO had come a long way. “We used to be a supply-driven company. Now we are a customer focused company,” he said.