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Foreign ministry to get details of Russian oil offer to ‘clear confusion’

Malik reiterates Russia to give crude oil, petrol, diesel at discounted rates to Pakistan
Minister of State for Petroleum Musadiq Malik addresses a press conference in Islamabad on December 16, 2022. Screengrab via YouTube/PTV News
Minister of State for Petroleum Musadiq Malik addresses a press conference in Islamabad on December 16, 2022. Screengrab via YouTube/PTV News

Story highlights

  • Foreign ministry to get details and information on technicalities of Russia’s cheap oil offer
  • 20,000 tons of additional LPG will be brought every month
  • Pakistan working with Azerbaijan on a framework agreement
  • Azerbaijan’s SOCAR will give distressed cargo to Pakistan
  • Efforts under way to sign deal with United Arab Emirates to bring finished products
  • Russia’s IGC is scheduled to visit Pakistan in the second week of January
  • Pakistan reviving strategic pipeline agreement with Turkmenistan

The petroleum ministry would brief the foreign ministry on the “technicalities” of the Russian offer—for cheap crude oil, petrol, diesel—in order to “clear the confusion” over the talks.

“There was confusion in communication. There is no problem,” Minister of State for Petroleum Musadiq Malik said while addressing a press conference in Islamabad on Friday. “If there is any confusion, we are ready to clear it.”

He was responding to a query on Foreign Minister Bilawal Bhutto Zardari’s interview in which he said that Pakistan was not pursuing or receiving Russian oil at a discounted price.

“As far as Russia is concerned, we aren’t pursuing or receiving any discounted energy, but we are facing an extremely difficult economic situation, inflation, pump prices. But we do have energy insecurity. And we are exploring various avenues to expand our areas where we can get our energy from. Any energy that we receive from Russia will take a long time for us to develop,” Bilawal said in an interview with PBS Newshour.

When asked by the interview, Malik said: “I have not seen the full interview [of Foreign Minister Bilawal Bhutto Zardari] in it. Right now we are not buying oil from Russia now, this is 100% correct. Secondly, refineries. I think it is our responsibility that the details that I have presented in front of you. There are technicalities you have to sit with refineries and you have to understand. It is necessary for us to send all details to the foreign ministry.

So in order to clear this confusion, the names of refineries, their capabilities, and oil quality… Russia has also assured us that they would work for us to give us that quality of crude oil (after blending other types), that could be maximum used in Pakistan. So, I think it is our duty to do an additional job to take the foreign ministry on board. And we will send these details in a written form to the foreign ministry in order to clear confusion as it is a technical matter.“

At the start of his press conference, Malik reiterated that Russia would be providing crude oil, petrol, and diesel to Pakistan at discounted rates. He added that the inter-governmental commission (IGC) visit led by Russia’s energy minister was scheduled for the next week of January.

“Russia clearly told us that they will give crude oil at discounted rates, at the same price available to the whole world or more than it,” he said, adding that the government was moving forward with the offer. The petroleum minister explained that Moscow has eight types of crude oil, out of which two would be used by Pakistani refineries. His elaboration of types of oil and Pakistan companies’ status are as follows:

  • Sokol (Siberian light) and Ural are the two types that can be refined in Pakistan
  • Pakistan Refinery Ltd (PRL), which is owned by the PSO, can use up to 50 per cent light crude oil of Russian origin
  • Parco (Pak-Arab Refinery Limited) said it can use up to 30%
  • Cnergyico said not only can it use the two light crude oils but also the other six crude oils

The government would have a discussion on the rate of discount when the Russian delegation will arrive in Pakistan.

Reiterating that the government has Malik added that the government was providing more gas as compared to the past, he said they were bringing 20,000 tons of additional liquefied petroleum gas (LPG) every month and setting up LPG shops at places (where pipelines are not present due to infrastructure or low pressure) where they were not present in the past 70 years.

Secondly, Pakistan was working with Azerbaijan pertaining to gas. Both sides were exchanging the draft of the framework agreement under which SOCAR—one of the leading trading firms of LNG—would find and give distressed and unsold cargo to Pakistan.

“We will have the right to whether accept or reject it on the given rate,” Malik said. Under this deal, Pakistan can get LNG on a government-to-government basis.

The government has boosted its commitment to reviving the Turkmenistan–Afghanistan–Pakistan–India (TAPI) Pipeline and set up a Special Strategic Cell in the ministry under which the country will get “1.3 million cubic feet of cheap gas”.

A dedicated staff of the cell would look into the deals for energy.

Efforts were also under way to sign a deal with the United Arab Emirates to bring finished products, he added.

When asked about the Reko Diq deal, he was of the view that it was “confusion more than anything else” and “communication”. He stressed that there was not any fundamental disagreement. The agreement was signed after their considerating, he added.

Pakistan was also considering setting up a global trading firm with Azerbaijan in any European and Asian country.

“Things will be clear and the process will start in the first quarter of the first year,” he said in response to a query on an apparent confusion.

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politics Dec 17 2022