Thursday June 01, 2023

Pakistan important partner, say Russia, USA

Russian energy minister meets PM Shehbaz Sharif in Lahore to discuss matters related to energy trade

A Russian delegation led by Energy Minister Nikolay Shulginov called on Prime Minister Shehbaz Sharif in Lahore, January 20, 2022. —APP
A Russian delegation led by Energy Minister Nikolay Shulginov called on Prime Minister Shehbaz Sharif in Lahore, January 20, 2022. —APP

WASHINGTON/LAHORE/ISLAMABAD: In separate developments, the Russian Federation and the US promised full support to Islamabad on Thursday, saying Pakistan was an important partner and they wanted strong bilateral relations with it in various sectors.

A delegation, led by Russian Energy Minister Nikolay Shulginov, called on Prime Minister Shehbaz Sharif in Lahore and discussed cooperation in various fields to strengthen the Pak-Russia relations.

Welcoming the delegation, the prime minister highlighted the importance Pakistan attached to its relations with the Russian Federation. He recalled his meeting with President Vladimir Putin in Samarkand in September 2022 and said that the meeting had reached important decisions to strengthen Pakistan-Russia relations. He also noted with satisfaction the keen desire on both the sides to upgrade the bilateral cooperation in trade, investment and economic matters.

The Russian minister reciprocated PM’s sentiments and delivered a special message of Russian President Vladimir Putin to his host. In his message, President Putin, referring to Pakistan as Russia’s important partner in South Asia and the Islamic world, reiterated his strong interest to deepen the bilateral relationship.

Both sides agreed on the importance of energy sector for development of bilateral economic and trade relations. In this regard, views were exchanged on supplying oil and gas from Russia to Pakistan on a long-term basis. Matters related to gas pipelines were also reviewed.

The PM provided guidance for the work of 8th Round of Pakistan-Russia Inter-Governmental Commission meeting, scheduled to be held in Islamabad on Jan 20, 2023. Federal ministers Sardar Ayaz Sadiq, Syed Naveed Qamar, Minister for State for Petroleum Musadik Malik and Special Assistant to the Prime Minister Tariq Fatimi were also present.

Separately, in the federal capital, on the second day of Pak-Russia talks, Moscow communicated to Islamabad that it would announce the price of Russian crude for Islamabad once an MoU or protocol was signed for energy trade (crude oil, POL products and LNG), which would show the seriousness of Government of Pakistan towards the energy trade.

And to this effect, both sides are working to finalise an MoU and protocol that may be signed at the end of three-day talks on Friday (today).

“The experts from Russia also asked Pakistan counterparts not to mention the price cap of $60 per barrel imposed on Russian oil by G7 countries while discussing the crude import,” the officials involved in the talks told The News.

Currently, the Russian oil price in the international market hovers between $70-75 per barrel whereas Brent is priced at $81 per barrel. However, Pakistan hopes that it will get crude oil below $60 per barrel from Russia under the GtG mode. Nonetheless, sources said that the issue of discount as desired by Pakistan on crude oil would be decided by Russian President Putin if the Pakistan government’s top man contacts him.

Pakistan is interested in buying around 100,000 barrels per day of Russian crude oil and if the country’s refineries get synchronised well with the blended Russian crude oil, then the quantity of crude from Russia will be increased accordingly. As far as the $3 billion Pakistan Stream Gas Pipeline (PSGP) is concerned, Pakistan is of the view that it will erect the pipeline but it is linked with the supply of more LNG and infrastructure at the port. Russia wants to initiate the project and move forward in finalising the shareholding under the existing IGA. But now Pakistan wants it to execute the project on a BOOT (build, own, operate and transfer) basis.

Overall, the talks, officials said, under the Inter-Governmental Commission level are going on a positive trajectory, but after signing of the MoU for energy trade, Russia will come up with the price for Pakistan. This means, in the ongoing talks, there will be no decision on discount in crude price and life of the GtG agreement.

However, PSO mandarins are engaged on behalf of Pakistan with Russian officials and experts on the issue of import of crude, finished products and LNG issues and officials of OGDCL and Mari Gas Company are in talks on the issue of building LNG storages.

“PARCO can process the Russian blended oil by up to 30 per cent, Pakistan Refinery Limited 50 per cent and the Cynergico Refinery can process the maximum. As for the LNG import, the private companies of Russia have told Pakistan that they can offer it after 2025-26 on a long-term basis.”

Meanwhile, the US State Department said on Wednesday that they wanted to see Pakistan in an “economically sustainable position” and it is a “topic of conversation” within the US administration.

State Department Spokesperson Ned Price expressed these views during a press briefing while commenting on the financial crisis in Pakistan and the US government’s efforts to help the country.

When asked what suggestions Washington had for Islamabad to overcome these financial challenges and the discussions going on between the two governments, Ned Price said these conversations with “our Pakistani partners often do entail technical issues. Often times these are addressed between the Department of the Treasury and our Pakistani partners.” He added that “Pakistan’s macroeconomic stability is a topic of conversation between the Department of State and our counterparts, the White House, the Treasury Department, among others.”

He was also asked whether the US is planning to give some debt relief as the country’s forex reserve plunged to a historic low of $4.3 billion — enough for three weeks of imports. To this, the spokesperson said, “So this is a challenge that we are attuned to. I know that Pakistan has been working with the International Monetary Fund (IMF) and with international financial institutions. We want to see Pakistan in an economically sustainable position. Those conversations, as I understand it, are ongoing.”

The US official added that they are supportive where they can be of their Pakistani partners, but ultimately these are conversations between Pakistan and international financial institutions. In another related development, after reports that the World Bank (WB) had delayed approval of loans worth $1.1 billion for Pakistan, the multilateral donor termed the news item as “unfounded” on Thursday. Taking to his Twitter handle, WB Country Director for Pakistan Najy Benhassine said: “The press reports that refer to a World Bank decision to delay approval of potential Bank operations in Pakistan are unfounded.”

Earlier, the media reports claimed the Washington-based lender has delayed the approval of two loans for Pakistan worth $1.1 billion until the next fiscal year. However, Behassine made it clear that all the dates for approval of loans were already scheduled. “The tentative board approval dates of all of our proposed operations, as well as their amounts, are indicative, and the World Bank decides on the timing for sharing project proposals for board consideration following due process and based on the proposed projects’ readiness,” the WB official added.

Also, Saudi Arabia’s finance minister said on Wednesday his country was discussing with the World Bank and other financial institutions how could it be “more creative to provide that support” to Pakistan. Saudi Arabia has recently extended the term of a $3 billion deposit to boost Pakistan’s foreign-currency reserves late last year.

Speaking at the World Economic Forum (WEF) in Davos, Mohammed Al-Jadaan indicated the kingdom was changing the way it provided assistance to allies, shifting from previously giving direct grants and deposits unconditionally. “We used to give direct grants and deposits without strings attached and we are changing that. We are working with multilateral institutions to actually say we need to see reforms,” the minister said.

“We are taxing our people; we are expecting also others to do the same, to do their efforts. We want to help but we want you also to do your part.

“We are providing even oil and derivatives to support their energy needs,” Al Jadaan said. “So there is a lot of efforts, but we wanted this to be conducted.”

Meanwhile, Foreign Minister Bilawal Bhutto Zardari met Managing Director Operations of World Bank Axel van Trotsenburg on the sidelines of World Economic Forum at Davos in Switzerland on Thursday. During the meeting, he appreciated the WB pledge of $2 billion at Resilient Pakistan Conference and its important role as a major development partner of Pakistan. He also discussed the World Bank’s engagement with Pakistan.

Bilawal also held a meeting with Belgian Minister of Foreign Affairs European Affairs Foreign Trade and the Federal Cultural Institutions Hadja Lahbib on the sidelines of WEF at Davos.

Meanwhile, Pakistan and the Netherlands expressed the resolve to work together to further enhance cooperation in trade, investment, education, Information Technology and agriculture sectors.

The resolve was expressed during a meeting between Foreign Minister Bilawal Bhutto Zardari and Dutch Deputy Prime Minister and Foreign Minister Wopke Hoekstra on the sidelines of WEF in Davos on Thursday.