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Wednesday April 17, 2024

Refinery accord nears finish; PARCO board to seal fate

Pak Arab Refinery Limited (PARCO) awaits board approval before proceeding with the draft submission and final signing

By Tanveer Malik
March 19, 2024
A representational image shows Total Energies employees walking in the Donges oil refinery in Donges, on September 8, 2023. — AFP
A representational image shows Total Energies employees walking in the Donges oil refinery in Donges, on September 8, 2023. — AFP

KARACHI: The Oil & Gas Development Authority (Ogra) is expediting the finalisation of upgrade agreements with refineries under the Brownfield Refinery Policy, in line with the Prime Minister's instruction for a signing ceremony to mark the occasion.

While four refineries are on the verge of completing their agreements, Pak Arab Refinery Limited (PARCO) awaits board approval before proceeding with the draft submission and final signing. The development was shared during a recent Ogra meeting, which also saw Cnergyico pledge to submit its draft agreement shortly. "Pakistan Arab Refinery Company (PARCO) explained that they are taking the matter to their board meeting for approval, which is expected in the coming days. The submission of the draft of the upgrade agreement and its final signing would be subject to the approval from the board," PARCO representatives told a meeting of Ogra, whose minutes of the meeting were available with The News.

Minutes of the meeting also showed that Cnergyico confirmed that the draft upgrade agreement will be submitted within a few days. The meeting was convened to discuss the progress on the signing of the Upgrade Agreement including the Escrow Account with the brownfield refineries last week, chaired by the member (Oil) of OGRA along with representatives from SIFC and officials of refineries.

The member (Oil) appreciated the refineries' efforts for the implementation of the refining policy. He stated that the purpose of the meeting was to discuss the status of the upgrade agreements of all the refineries. The meeting was told that Pakistan Refinery Limited (PRL) has already signed an upgrade agreement with OGRA; however, they will sign a fresh upgrade agreement for opting for the prevailing policy, which was amended. Attock Refinery Limited (ARL) and National Refinery Limited (NRL) have submitted their draft upgrade agreements, which are under evaluation with OGRA's legal counsel and are expected to be finalized soon.

The member (Oil) emphasised that the draft template agreements, once finalised, will be circulated to all the refineries, and accordingly, we will be in a position to advise on a probable date for the signing of upgrade agreements.

In the first week after assuming office, Prime Minister Shehbaz Sharif had directed the Petroleum Division to arrange a signing ceremony of the refinery upgrade agreements under the Brownfield Refinery Policy to be witnessed by him. These directions were issued at a meeting on the energy sector, presided over by the Prime Minister.

The Ministry of Energy notified the amended oil refining policy after its approval by the Cabinet on February 15, 2024, as recommended by the Cabinet Committee on Energy (CCoE) in February 2024.