10 BUSINESS
Thursday, 12 January, 2017
Russian GazpRom mulls joint ventuRe with pakistan’s oGDCl ISLAMABAD
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AHMAD AHMADANI
high profile delegation of Moscow's state-owned natural gas giant Gazprom is expected to visit Pakistan during the month of February to materialise a deal regarding a joint venture with Islamabad’s OGDCL for the exploration and production of oil and gas. Well-placed sources told Pakistan Today that a delegation of Moscow's state-owned natural gas giant Gazprom would visit Pakistan during the next month of February to hold discussions with Petroleum Ministry and Oil and Gas Development Company Limited (OGDCL) officials for materialising a deal regarding a joint venture with the OGDCL. Russia’s Gazprom is mulling hydrocarbon exploration and production projects in Pakistan and is interested to start joint work with the OGDCL, they added. “A big cooperation in the field of energy is planned to take place, according to the negotiations so far held between Pakistan and Russia, in the coming days,” sources said, adding that many companies are mulling investment and exploring opportunities for direct investment in Pakistan after the inking of $2 billion gas pipeline project from Karachi to Lahore. The sources also informed that Gazprom was keen to work with OGDCL in exploration and production (E&P) of oil and gas. They said Russian firm is interested to obtain a separate field from OGDCL to start E & P activities in the oil and gas sector of Pakistan. Russian investment in the field of exploration and production of oil and gas sector of Pakistan is likely if upcoming meeting between the two companies prove fruitful, sources said. Petroleum Ministry officials on the
condition of anonymity confirmed that discussions with Russia’s Gazprom are underway and soon they would visit Pakistan. They said that there exists a lot of potential and scope for Gazprom investment in the oil, gas and mineral sector in Pakistan. Also, Gazprom’s participation in hydrocarbon exploration and production projects in the country would also help promote the existing volume of bilateral cooperation between the two countries. “Many Russian companies are keen to invest in Pakistan as large number of companies has so far shown interest in oil and gas sector of the country,” they said. Pakistan People’s Party (PPP)-led government in Pakistan had signed a Memorandum of Understanding (MoU) in November, 2010 with Russian federation to pursue joint projects and cooperation in the oil and gas sector. The MoU was signed by Federal Minister for Petroleum Syed Naveed Qamar and Russian Minister for Energy SI Shmatko in Moscow. During the ceremony, the Russian minister expressed his desire to participate in developing joint ventures with Oil and Gas Development Company Limited (OGDCL) in exploration and development of oil and gas prospects in Pakistan and also offered technology and investment for the purpose. Energy experts are of the view that
Pakistan has currently been seeking international cooperation, investment and joint ventures to boost all types of energy - natural gas, electricity and petroleum to shore up its industrial production and gross domestic product (GDP), which has fallen nearly two per cent to 4.5 per cent in fiscal year 2016. The under negotiation cooperation with Russia and Gazprom is part of this plan, they added. Continuing with the policy of previous government regarding enhanced regional cooperation in the field of energy, incumbent Pakistan Muslim League-Nawaz (PML-N) government has intensified bilateral relation with Russia and central Asian states. Minister of Petroleum and Natural Resources Shahid Khakan Abbasi also held repeated meetings in Moscow with his Russian counterpart in a bid to enhance and intensify bilateral cooperation in the energy sector. Pakistan and Russia had signed a government-togovernment deal in October 2015 to construct a pipeline to transport liquefied natural gas (LNG) from Karachi to Lahore. Moscow will lend Islamabad $2 billion for the project. Pakistan and Russia enjoyed cordial friendly relations and bilateral cooperation between the two countries in various walks of life, especially in the petroleum sector was growing at a fast pace for the
mutual advantage. The gift from Moscow is the planned $2 billion Russian investment in 1,100-kilometre natural gas pipeline, from Karachi to Lahore. In August last year, Pakistan and Russia signed a landmark defence deal for the sale of four Mi-35 ‘Hind E’ attack helicopters to Pakistan and are currently in talks about the delivery of Sukhoi Su-35 fighter jets. The former Soviet Union had financed the construction of the stateowned Pakistan Steel Mills. The Steel Mills is the hallmark of Pak-Russia economic relations and Russia has already constructed Muzaffargarh and Gaddu power stations and was thus playing its role in resolving the energy related problems of Pakistan. The soviets had also helped supply some of the oil drilling equipment for the state-owned Oil and Gas Development Company. Some of that equipment is in use till date. In 1961, Pakistan set up its largest E&P firm, the Oil and Gas Development Company Ltd (OGDCL), with the financial and technical support of Soviet technical experts. The cooperation remained almost non-existent for decades due to diplomatic reasons. A leading Russian petroleum company, JGC Rosgeologia (Rosgeo), had already signed memorandum of understanding (MoU) signed with Khyber Pakhtunkhwa Oil and Gas Company Ltd (KPOGCL). Under the MoU, the jointstock company Rosgeo from Moscow will extend long-term cooperation in KP’s exploration and production (E&P) sector. Reportedly, the non-binding agreement will envisage long-term cooperation between the two companies to perform various E&P activities, including geological and geophysical field works, 2D and 3D seismic data acquisition, drilling and related services, warehousing and jointly acquiring concession blocks in various parts of Pakistan.
Business community terms PM’s package for exports sector historic PESHAWAR APP
Former Khyber Paktunkhwa Chamber of Commerce and Industry (KPCCI) presidents on Wednesday welcomed the massive Rs.180 billion package of Prime Minister Muhammad Nawaz Sharif for promotion of exports sector and termed it a historic and positive step of the federal government, which will increase the country's exports and generating employment opportunities for the youth. Former KPCCI president Faud Ishaq told APP
that Prime Minister Muhammad Nawaz Sharif deserved full credit and appreciation for announcing a massive Rs180 billion package for promotion of exports sector that would also largely benefited the exporters and business community of Khyber Pakthunkhwa (KP) and FATA. Ishaq said this massive package would not only strengthen economy but also promote industrialisation, generate employment opportunities and enhanced the exports of Pakistan. With promotion of exports sector, he said, the problems of poverty, illiteracy, unemployment and migration of population from villages to
urban areas would also be addressed. "The package is historic and unprecedented and I thanked the Prime Minister Muhammad Nawaz Sharif for fulfilling yet another demand of business community and exporters for announcing a massive Rs180package for promotion of exports sector," he remarked. Significant reduction in hours of load shedding in urban and rural areas is yet another achievement of PML-N government, Dr Sarwar said, adding that uninterrupted power to industrial units had increased production capacity of industrial units and also enhanced employment opportunities.
219 exhibitors take part in heimtextil Fair in Frankfurt KARACHI: Around 219 exhibitors took part in Heimtextil Fair, being held from January 10-13 in Frankfurt (Germany) while 55 Pakistani companies to participate in this exhibition under the flag of Trade Development Authority of Pakistan (TDAP) pavilion. Over 2000 trade visitors from Pakistan are attending Heimtextil Frankfurt 2017. With a strong increase in the number of exhibitors and all indications suggesting that the new furnishing season will be a good one, Heimtextil started on Tuesday in Frankfurt. It is not just the number of home textile exhibitors that has grown in 2017, but also the exhibition space. Heimtextil in Frankfurt is by far the most international event of its kind. Pakistan have 219 exhibitors of which 55 exhibitors are participating under the TDAP pavilion in halls 10 and 10.3. This will make Pakistan the 4th largest country at the show behind Germany, China and India. Pakistani Ambassador in Germany Jauhar Saleem will also be visiting the show. In home textiles, Pakistan has a very strong and important position in the textile market. Hall 10 which has exhibitors of bed sheets, towels and kitchen linen, the biggest country is Pakistan. Premium exhibitors like Gul Ahmed, Kamal, Sapphire can be found in hall 10.2. STAFF REPORT
state Bank allows clearinghouse membership to CDns KARACHI: In order to facilitate the general public, SBP has allowed clearinghouse membership to Central Directorate of National Savings (CDNS). State Bank has issued instructions to all the banks to accept profit coupon / withdrawals slips pertaining to Pensioners Benefit Account (PBA), Behbood Saving Certificate (BSC) and Saving Account (SA) of CDNS. The investors can now deposit these instruments directly into their bank accounts, located anywhere in Pakistan. These instruments will be cleared by CDNS through NIFT. Upon receipt of successful clearance from National Savings, banks will then credit respective accounts of such investors. STAFF REPORT
ECC APPROVES EXTENSION FOR NEELAM JHELUM SURCHARGE ISLAMABAD STAFF REPORT
The Economic Coordination Committee of the cabinet (ECC) on Wednesday approved extension in the collection of Neelum Jhelum surcharge at Rs 0.10 per kilowatt hour up to June 30, 2018 and consented giving a sovereign guarantee for WAPDA to get Rs 32 billion credit from banks for settling net hydel profit claims of Punjab. The meeting was chaired by Finance Minister Ishaq Dar. The ECC approved the proposal of Ministry of Water and Power to extend the closing date of collection of Neelum Jhelum surcharge at Rs 0.10/kWh up to June 30, 2018, for the Neelum Jhelum Hydropower Project. The previous closing date for the surcharge was December 31, 2016. The extension in the closing date for a period of 18 months up till June 30, 2018, is expected to result in collection of Rs 9 billion which will assist in ensuring successful completion of the project. An official source said that the ECC meeting was informed that the surge was required to meet up with the shortfall in the work on the project.
Neelum Jhelum Hydropower Project was started in 2008 with a financial close and its estimated cost of construction increased from initial Rs 38 billion to Rs 174 billion and then to Rs 274 billion during the PPP government. Under the present government the estimate has increased to over Rs 440 billion and WAPDA authorities initially said the project would be completed in 2017 but as per their new schedule the project would be completed in mid-2018. Minister for Water and Power Khawaja Asif has recently said the project will start power generation in the monsoon season of 2017. The ECC also approved sovereign guarantee for the loan of WAPDA to pay net hydel profit of Rs 32 billion to Punjab. The authority had earlier claimed that it did not have resources to pay Punjab during the current financial year. The authority had sought sovereign guarantee for obtaining loan for payment to the provincial government. The remaining amount from the Rs 80 billion will be paid to Punjab in equal instalments during the next three years. An official statement said that in pursuance of the decision of the Council of Common Interests (CCI), ECC approved
the proposal of Ministry of Water and Power for issuance of Letter of Comfort and GoP guarantee by finance division to WAPDA for settlement of Net Hydel Profit claims of government of Punjab. ECC approved the summary submitted by finance division regarding the Prime Minister’s Package of Incentives for Exporters which has been formulated with a view to mitigate exporters’ difficulties and enhance the country’s exports. The package will have an estimated financial impact of Rs 180 billion, and is applicable for the period from January 16, 2017, till June 30, 2018. The incentives for FY 2017-18 would only be available to those exporters who would achieve an increase of 10 per cent in their exports as compared to their exports for FY 2016-17. The Finance Division informed the ECC about the latest key economic indicators, including reviews of product’s prices, inflation, commodity stock position, energy figures, foreign exchange reserves, foreign investment, trade performance and tax revenues. The ECC was informed that headline inflation measured by CPI increased by 3.7 per cent in December 2016 compared to 3.8 per cent in November 2016.
ECC was apprised that the reported stock of wheat as on January 03, 2017, is 7.5 million tonnes showing that sufficient quantity of local wheat is available for daily releases to mills by the provincial food departments and the PASSCO. The finance division informed the ECC that the stock of various POL products averaged 34 days on January 10,
2017. It was also informed that production in the Large Scale Manufacturing sector stood at 2 per cent in July-October FY 2017. The ECC was apprised that worker remittances received during JulyDecember FY 2017 amounted to $ 9.45 billion. It was also informed that gross foreign exchange reserves stood at $ 23.18 billion as on January 09, 2017.