Govt To Sign Refinery Upgrade Deals Within 10 Days

Pakistan's refineries are projected to sign agreements with the administration within the next seven to 10 days to move forward with long delayed modernization projects, Petroleum Minister Ali Pervaiz Malik noted.

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• Malik remarked offshore exploration could require investments of more than $100 million for a single well, making policy stability and medium term visibility notable for investors.
• The administration shared the draft refinery upgradation agreement with refineries on Thursday and expects the agreements to be signed before the end of August.
• The administration is additionally working with the World Bank on reforms to the gas sector, including separating infrastructure from energy businesses and increasing competition.

Notably, the administration shared the draft refinery upgradation agreement with refineries on Thursday and expects the agreements to be signed before the end of August. Once upgraded, the refineries will be able to process a wider range of crude oil grades, according to the minister.

Meanwhile, the upgrades are part of broader efforts to improve Pakistan's domestic refining capacity and reduce dependence on imported petroleum products. Petroleum Minister Ali Pervaiz Malik remarked the government's new refinery policy was now in place and agreements with refineries were being finalized.

In practice, the minister additionally stressed the need for predictable policies to attract investment in Pakistan's upstream oil and gas sector. He remarked the country had resumed offshore exploration after a gap of two decades, with businesses including Mari Petroleum, Pakistan Petroleum Limited and Oil and Gas Development Firm Limited participating in the effort.

Malik remarked offshore exploration could require investments of more than $100 million for a single well, making policy stability and medium term visibility notable for investors. He additionally stated successful explorers should be able to retain profits and reinvest them in infrastructure needed to develop discoveries.

Meanwhile, the administration is additionally working with the World Bank on reforms to the gas sector, including separating infrastructure from energy businesses and increasing competition. Malik remarked circular debt flows in the energy sector had been kept near zero without increasing consumer tariffs.

In practice, the minister remarked the Cabinet Committee on Energy, chaired by Prime Minister Muhammad Shehbaz Sharif, had been reactivated and should meet every two months to review developments throughout the energy value chain.

Pakistan Petroleum Dealers Association Chairperson Malik Khuda Baksh remarked refinery upgrades could create room for further reductions in diesel costs by increasing domestic production and reducing reliance on imported crude and finished petroleum products.

Baksh remarked upgraded refineries would be able to process both heavier and lighter crude grades, increasing refining capacity and improving efficiency. He called on the administration to accelerate the upgrade program so domestic production could better meet demand and any resulting cost savings could be passed on to consumers.

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