Officials say Pakistani oil refineries only have capacity to process 30 percent Russian crude oil

The file photo posted on September 20, 2021 shows Cnergyico Pakistan Limited's oil refining complex in Hub, Balochistan. (Cnergyico Pk Limited/Facebook)
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Updated 29 July 2022
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Officials say Pakistani oil refineries only have capacity to process 30 percent Russian crude oil

  • Experts estimate energy imports from Russia could save Pakistan about $3 billion yearly
  • Refinery officials say Pakistan’s plans to import oil from Russia will not disrupt Gulf imports

KARACHI: Officials at refineries in Pakistan have said given “technical and operational constraints,” the South Asia country can only process up to 30 percent of Russian varieties of crude oil, as Pakistan explores cheaper import options and experts warn a deal with Moscow could become a new source of friction between Pakistan and the United States.

Pakistan’s energy ministry last month sought recommendations from industrial experts and major local refineries on importing crude oil from Russia, asking for input on the technical suitability of crude grades, quantity and transportation of freight in comparison with imports from the Middle East. The government specifically sought advice on “payment methodology” in case of crude oil import and “existing commitment to upliftment from the Arab Gulf region with respect to term contracts.”

Pakistan’s energy and power ministers did not respond to repeated Arab News queries about the government’s plans following responses by refineries to the energy ministry’s letter.

But several Pakistani oil refinery officials interviewed by Arab News said they had informed the government in their replies the main problem with a deal with Moscow was that only up to 30 percent of Russian crude could be processed at local refineries, given their current configuration.

“The current configuration of plants supports up to 30 percent of Russian oil refining due to technical and operational constraints,” a top official at a local refinery, who spoke on condition of anonymity, said.

“But the real problem is how the payments would be made under present circumstances and how their LCs [letters of credit] would be processed as Russian banking channels are closed for international payments.”

A number of Pakistani refineries said they had informed the government they could only process certain grades of Russian crude, including Sokol, Sakhalin Light and Eastern Siberian Pacific Ocean (ESPO).

“Byco has responded to the government and we have said that Byco can refine Russian oil but there are limitations,” said Mohammad Wasi Khan, chairman of the Cnergyico petroleum refining company, formerly known as Byco.

Officials at petroleum refineries also said they had apprised the government of supply constraints as some coastlines were located far away and it would take about 16 to 22 days to deliver oil to Karachi.

On the other hand, Pakistani financial analysts estimate energy imports, including crude oil and refined products from Russia, could save Pakistan about $3 billion a year.

“Russians can also provide petrol, diesel, crude oil, and liquefied natural gas [LNG],” said Samiullah Tariq, director of research at the Pakistan-Kuwait Investment Company. “Assuming it’s at a 25 percent discount from prevailing market rates, Pakistan can save more than $3 billion annually,” he added.

Pakistan’s oil imports during 11 months of the last fiscal year, from July 2021 until May 2022, rose by 99 percent to $19.7 billion, including $10 billion imports of refined products and $4.7 billion worth of crude.

As Pakistan evaluates the costs and benefits of Russian oil imports, experts said since Pakistan had no pre-existing contract to buy oil from Russia, it would be hard to expect exemptions from international sanctions.

“It is very unlikely that a new contract by Pakistan will get such exemption,” Husain Haqqani, a scholar at the Hudson Institute in the US, told Arab News. “It will not be easy for Pakistan to pay for the oil, to get insurance for tankers that ship it, and to handle the consequences of violating sanctions.”

“The United States and western Europe will not be happy if Pakistan violates sanctions and starts buying oil from Russia in the midst of Ukraine war,” he added. “Given that US-Pakistan relations are already strained, this would be a new source of tension, which is completely avoidable.”

Analysts and refinery officials also said despite Pakistan’s plans to import oil from Russia, it would continue to secure its petroleum imports from Gulf countries.

Refinery officials said they would fulfill long-term contracts made with the Gulf region’s oil producers and assured that the supply from the region would not be disturbed.

“Three refineries have long-term contracts with Gulf oil producers and as the refineries have confirmed they can refine only 30 percent Russian oil, it means the rest of the volume will come from the Gulf region,” the refinery official, who wished to remain anonymous, said.

Some experts also believe Pakistan may be in a position to gradually import Russian oil despite pressure from Washington.

“In order to secure its energy [needs], Pakistan can buy cheap Russian oil, and despite American pressure, Islamabad can continue importing oil from Russia to some extent, but I think Islamabad will eventually be able to import cheap Russian oil,” Dr. Umud Shokri, a Washington-based senior foreign policy adviser and energy strategist, told Arab News.

“Despite pressure from the US, India has continued to buy cheap oil from Russia, while China’s oil imports from Russia have also increased due to the energy crisis and the increase in oil prices,” he said. “Energy consuming countries such as Pakistan want to diversify their energy sources and buy oil and gas. The Russian embargo has caused countries to increase the import of cheap Russian oil.”

The option of crude imports from Russia came into the limelight after now ousted premier Imran Khan, who arrived in Russia in February the day it launched a full-scale invasion of Ukraine, said Moscow was willing to offer oil at cheaper rates to Pakistan.

Pakistan’s Finance Minister Miftah Ismail, who is in the new cabinet of PM Shehbaz Sharif, has rubbished Khan’s claims and said Islamabad would be willing to buy oil at cheaper rates from Russia only if Moscow made the offer and Islamabad didn’t have to face sanctions on the deal.


Army chief vows action after deadly week of militant attacks in Pakistan

Updated 8 sec ago
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Army chief vows action after deadly week of militant attacks in Pakistan

  • Twelve soldiers were killed on Tuesday as militants attacked a checkpost in the northwestern Bannu district
  • Gunmen opened fire on vehicles carrying minority Shiite community members in KP province on Thursday, killing 41

ISLAMABAD: Pakistan Army Chief General Asim Munir vowed action against militants on Friday, following a week of deadly attacks in which dozens of civilians and security officials have been killed in the country’s northwest. 
In the latest attack, gunmen opened fire on vehicles carrying members of the minority Shiite community in Pakistan’s Khyber Pakhtunkhwa province on Thursday, killing at least 41 people in one of the region’s deadliest such attacks in recent years. The assault took place in Kurram, a district where sectarian clashes have killed dozens of people in recent months. No group has claimed responsibility.
On Tuesday, ten Pakistan army soldiers and two from the paramilitary Frontier Constabulary were killed on Tuesday as militants attacked a checkpost in the northwestern Bannu district.
Pakistan’s Khyber Pakhtunkhwa (KP) province in the northwest and the remote southwestern province of Balochistan have both seen an increase in strikes by militants this year.
“He [Munir] reiterated the army’s firm resolve to dismantle hostile terrorist networks and eradicate the illegal spectrum undermining national security,” the army’s media wing said in a statement, quoting Munir as saying after he attended a security meeting in Peshawar, the provincial capital of Khyber Pakhtunkhwa. 
“He assured that through synchronized and robust operations, Pakistan Army in collaboration with Law Enforcement Agencies will relentlessly hunt down the enemies of peace to ensure lasting stability and security.”
In a separate statement, the army said it had carried out three operations in Balochistan on Nov. 20-22, in which four militants had been killed. 
On Tuesday, Prime Minister Shehbaz Sharif chaired a meeting of civil and military leaders who gave the go-ahead for a "comprehensive operation" against separatist insurgents in Balochistan.


Pushed by Beijing, Pakistan plans military operation against Baloch separatists — analysts

Updated 4 min 47 sec ago
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Pushed by Beijing, Pakistan plans military operation against Baloch separatists — analysts

  • Government has announced operation but not shared details of scale, scope, whether it will be joint effort with China
  • Analysts say military solutions will not work in Balochistan, plagued by low-level separatist insurgency since decades

QUETTA: Pakistan is working out the operational details, scope and scale of a planned military operation in the insurgency-plagued southwestern Balochistan province, officials said this week, with analysts saying pressure from Beijing had convinced Islamabad it was time to take on separatist militants in a region that is home to key Chinese Belt and Road projects.
Following a string of deadly attacks that have targeted its citizens in recent months, China has pushed to join security efforts to protect them and unveiled a plan on Tuesday for joint counter-terrorism exercises in Pakistan. On the same day, Prime Minister Shehbaz Sharif chaired a meeting of civil and military leaders who gave the go-ahead for a “comprehensive operation” against separatist insurgents in Balochistan.
The statement from the prime minister’s office did not give any details of the operation, including whether it was limited to ground operations or could involve the air force, when it would be launched and in which parts of the vast, remote Balochistan province. It also did not mention if the plan would be a joint effort with Beijing and which Pakistani security agencies would take part.
“Nothing has been finalized yet because the meeting was held on Tuesday and further progress regarding the military operation will take time,” Wasim Akram, an information officer at the Ministry of Interior, told Arab News, adding that the scale of the operation and which forces would participate were details that were still being worked out. 
Balochistan Government Spokesperson Shahid Rind and Special Secretary Home Department Abdul Nasir Dotani also did not share any specific details on the operation’s scope and scale.
“It was decided in the federal apex committee and it is clear it will be a comprehensive military operation,” Rind told Arab News. 
Balochistan Home Secretary Shahab Ali Shah, Balochistan Chief Minister Sarfaraz Bugti, Defense Minister Khawaja Asif and Information Minister Attaullah Tarar could not be reached for comment despite several attempts. 
“PRESSURE FROM CHINA”
Pakistan’s military already has a huge presence in Balochistan, which borders Afghanistan and Iran and is home to a decades-long separatist insurgency by militants fighting for a separate homeland to win a larger share of benefits from the resource-rich province. The government and military deny they are exploiting the province’s mineral wealth or ignoring its economic development. 
The military has long run intelligence-based operations against insurgent groups, the most prominent being the Baloch Liberation Army (BLA), which has escalated attacks in recent months on the military and nationals from longtime ally China.
The region is home to the Gwadar Port, built by China as part of the China-Pakistan Economic Corridor (CPEC), a $65 billion investment in President Xi Jinping’s Belt and Road infrastructure initiative to expand China’s global reach.
In addition to the recent attacks, the BLA also claimed a suicide bombing last month outside the international airport in the southern port city of Karachi that killed two Chinese engineers.
“There shouldn’t be any ambiguity that Pakistan is facing internal and external pressure, mainly from China, to launch this new offensive against Baloch separatist militants,” Dr. Ayesha Siddiqa, a senior fellow at King’s College in London and a military affairs expert, told Arab News.
“There is increasing pressure from the Chinese government and they are not willing to financially assist Pakistan anymore until the security situation gets better … Pakistan has to demonstrate to the Chinese that we are doing something in Balochistan against Baloch militant groups.”
Shahzad Zulfiqar, a senior journalist who has been covering militancy in Balochistan for over two decades, concurred with Dr. Siddiqa, also pointing to reports that China was pushing Pakistan to allow its own security staff to protect thousands of Chinese citizens working in the South Asian nation.
“Though Pakistan has been taking action against militant groups involved in attacking Chinese nationals, now there is pressure from China which is asking Pakistan to work on a joint security mechanism because Chinese citizens are being targeted and are under threat,” he said. 
The foreign office in Islamabad this month denied international media reports Beijing wanted its own security forces on the ground in Pakistan. 
Pakistan had raised a security force to protect Chinese nationals and projects, particularly those operating under the CPEC umbrella, and “this security apparatus continues to provide security to Chinese CPEC projects inside Pakistan,” Foreign Office Spokesperson Mumtaz Zahra Baloch told reporters on Nov. 14:
“Pakistan and China have a robust dialogue and cooperation on a range of issues including counterterrorism and security of Chinese nationals in Pakistan … We will continue to work with our Chinese brothers for the safety and security of Chinese nationals, projects and institutions in Pakistan.”
“NO MILITARY SOLUTIONS”
Ethnic Baloch separatists have launched several insurgencies in Balochistan since the birth of Pakistan in 1947, including from 1948-50, 1958–60, 1962–63 and 1973–1977. An ongoing low-level insurgency began in 2003. The army has launched several military campaigns in response, including as early as 1948 in the state of Kalat and a five-year-long operation in the 70s under Prime Minister Zulfiqar Ali Bhutto. 
“Many political governments have come and gone in Balochistan but the operation has continued,” Sardar Akhter Jan Mengal, head of the Balochistan National Party (BNP) and a prominent Baloch nationalist leader in the province, told Arab News.
“No one can resolve Balochistan’s political issue with military operations.”
Indeed, political leaders and independent analysts have for years urged the government to take a holistic approach to resolving Balochistan’s problems, which they say stems from decades of economic deprivation and political disenfranchisement. The province, which comprises 44 percent of Pakistan’s total land mass, is its most backward by almost all economic and social indicators.
Rich in land and mineral wealth, most parts of the region often lack even the rudiments of modern life. For instance, though home to Reko Diq, one of the world’s largest undeveloped copper and gold deposits, and the site of major Chinese investment projects, the province lacks employment opportunities and basic facilities like Internet, health and education.
Balochistan is also the least represented in Pakistan’s parliament, where legislative seats are allocated to provinces according to their population. Balochistan has a population of only 14.89 million people in a country of over 240 million and is hence allocated only 16 National Assembly seats. Punjab, with a much smaller land area but a population of 127.68 million, gets 141 seats.
Zulfiqar, the journalist, said military operations needed to be combined with social and economic development as well as “good governance” efforts to be successful. 
“This will be the fifth military operation in Balochistan since 1947,” he said. “Military operations are not the only solution to bring peace and stability in Balochistan, there should be more options involved with the military operation, including dialogue and good governance.”
In fact, many fear another military operation in the province will further alienate its citizens, rights activists and political leaders, who have long accused security agencies of arbitrary arrests, extrajudicial killings and other types of rights abuses in the name of cracking down on separatists. The state denies it is involved in such activities. 
“This military operation will put more fuel in the fire of hate in Balochistan rather than extinguish it,” BNP’s Mengal said. 
Nawab Aslam Raisani, a provincial lawmaker and a senior political and tribal leader in the province, also warned against a military operation. 
“We haven’t seen any result of the use of military force,” he said. “This new decision of the apex committee to launch a military operation in Balochistan will push the federation toward more destruction.”


Over 200 investors, entrepreneurs from Pakistan, UAE attend joint business forum in Sharjah

Updated 48 min 44 sec ago
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Over 200 investors, entrepreneurs from Pakistan, UAE attend joint business forum in Sharjah

  • Sharjah-Pakistan Business Roundtable hosted on Thursday by Sharjah FDI Office, Pakistan Business Council
  • UAE is one of Pakistan’s largest trading partners and source of foreign investment, valued at over $10 billion in last 20 years

ISLAMABAD: Over 200 investors and entrepreneurs from Pakistan and the United Arab Emirates (UAE) attended a joint business forum in Sharjah this week to explore bilateral investment opportunities in sectors such as manufacturing, IT, trade and green-tech, state media reported. 
The UAE is one of Pakistan’s largest trading partners and a major source of foreign investment, valued at over $10 billion in the last 20 years, according to the UAE ministry of foreign affairs. The UAE-Pakistan trade volume rose to $7.9 billion in 2023, up 12 percent from 2022. In May this year, Prime Minister Shehbaz said the Emirates had committed $10 billion to invest in promising economic sectors in Pakistan. The Pakistan Business Council (PBC), set up this September at the Sharjah Chamber of Commerce and Industry, also aims to increase Pakistan’s bilateral trade volume with the UAE to $40 billion in three years. 
The UAE is home to more than a million Pakistani expatriates and the second-largest source of remittances to Pakistan after Saudi Arabia.
“The Sharjah FDI Office (Invest in Sharjah) and the Pakistan Business Council in Sharjah hosted the Sharjah-Pakistan Business Roundtable here on Thursday,” Pakistani state news agency APP reported on Friday. 
“The event brought together over 200 investors and entrepreneurs to explore opportunities for strengthening economic ties and fostering bilateral investments between Sharjah and Pakistan.”
Speaking at the event, Consul General Hussain Muhammad, said Pakistan’s economy, workforce, and abundant natural resources offered “immense potential for collaboration” with the Emirates. 
“Pakistan’s economy is diverse, with opportunities in agriculture, textiles, information technology, and renewable energy,” the diplomat said. “Sharjah’s investors and businesses could greatly benefit from exploring partnerships in these sectors.”
The consul general said the recent establishment of the Pakistan Business Council in Sharjah was a “testament to the growing collaboration” between the two countries and expressed confidence that the Council would play a “crucial role” in supporting Pakistani investors, facilitating partnerships, and advancing mutual economic interests.
Over 11,500 Pakistani companies are currently registered within Sharjah’s mainland and dedicated Free Zones.


Haider tank, Shahpar fighter drone in spotlight as Pakistan’s top defense expo concludes 

Updated 22 November 2024
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Haider tank, Shahpar fighter drone in spotlight as Pakistan’s top defense expo concludes 

  • Exhibition hosted over 550 exhibitors and 350 civil and military officials from 55 countries
  • IDEAS has been held biennially since 2000 and grown into a key event for defense sector

ISLAMABAD: Pakistan’s top defense exhibition IDEAS 2024 will conclude today, Friday, with the locally manufactured third-generation Haider tank and Shahpar fighter drone among the South Asian nation’s main showpieces. 
IDEAS has been held biennially since 2000 and has since grown into a key event for the Pakistani defense sector. This year’s show, running from Nov.19-Nov. 22 in Karachi, hosted over 550 exhibitors, including 340 international defense companies, and more than 350 civil and military officials from 55 countries.
On the first day of the expo, Pakistan launched the Haider tank, locally produced at the Heavy Industry Taxila in collaboration with local and international technology partners. The tank has auto-tracking, a remote-control weapons system and a 470-kilometer cruising range.
The Shahpar-III drone capable of flying at 35,000 feet and carrying heavy weapons such as bombs, cruise missiles and torpedoes, was also launched at the exhibition. 
“I had no prior knowledge about these products, but upon visiting, I was astonished to discover such a top-class range of items being exported abroad,” Muhammad Mohsin, a visitor, told media.

A member of Pakistan armed forces takes a selfie with Global Industrial & Defense Solutions (GIDS) Shahpar, unmanned combat aerial vehicle (UCAV) during the International Defense Exhibition and Seminar “IDEAS 2024” in Karachi on November 21, 2024. (REUTERS)

“These products, manufactured in Sialkot, Gujranwala, and Karachi, truly showcase exceptional craftsmanship. It is imperative that these remarkable offerings gain greater recognition in international markets.”
Mohsin said he was unaware that Pakistan was exporting a “top-class range of items” in the defense sector until he attended this year’s IDEAS.
The Shahpar-III is a successor to the Shahpar-II drone, which could fly up to 20 hours at a maximum altitude of 23,000 feet, according to Global Industrial Defense Solutions (GIDS), a state-owned Pakistani defense conglomerate that has developed the drones. The Shahpar-III can fly up to 35,000 feet for 24 hours and carry a payload of up to 500 kilograms.

Members of the Pakistan Navy special force conduct a counter-terrorism demo during the International Defense Exhibition and Seminar “IDEAS 2024” in Karachi on November 21, 2024. (REUTERS)

GIDS, which exports its products to 14 countries including Saudi Arabia and the United Arab Emirates, introduced Shahpar-II in 2021.
“This [Shahpar-III] has a more strategic value to an armed force in comparison to Shahpar-II,” Asad Kamal, Chief Executive Officer of GIDS, told Arab News, adding that the drone would soon be inducted into the Pakistan Air Force.
“Shahpar-III is a natural step up when you’re making UAVs drones.”

Officials and people take pictures with a JF17 Thunder fighter jet during the International Defense Exhibition and Seminar “IDEAS 2024” in Karachi on November 21, 2024. (REUTERS)

Kamal said the drone could see targets at night and “take out on the enemy” with heavy weapons. 

Members of Pakistan armed forces and their families look at a counter-terrorism demo during the International Defense Exhibition and Seminar “IDEAS 2024” in Karachi on November 21, 2024. (REUTERS)
Members of the Pakistan Navy special force conduct a counter-terrorism demo during the International Defense Exhibition and Seminar “IDEAS 2024” in Karachi on November 21, 2024. (REUTERS)

“That means that from your own borders, you can launch a cruise missile from an unpiloted plane,” he added. “That cruise missile has a range of 250 kilometers. So, it can give any force a lot of firepower value by having this sort of a weapon in its arsenal.”
With inputs from AFP


Fear, grief grip Pakistan’s Kurram district as 41 killed in sectarian attacks

Updated 22 November 2024
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Fear, grief grip Pakistan’s Kurram district as 41 killed in sectarian attacks

  • Gunmen opened fire on vehicles carrying members of minority Shiite community in KP province on Thursday
  • Clashes in July and September killed dozens of people and ended only after a jirga called a ceasefire

PESHAWAR: Fear gripped Pakistan’s northwestern Kurram district on Friday as the death toll from two sectarian attacks rose to 41, with authorities imposing a curfew and suspending mobile phone services in the remote mountainous region.
Gunmen opened fire on vehicles carrying members of the minority Shiite community in Pakistan’s Khyber Pakhtunkhwa province on Thursday in one of the region’s deadliest such attacks in recent years. The assault took place in Kurram, a district where sectarian clashes have killed dozens of people in recent months.
“Total 41 people have been killed and 19 others are injured in the attack,” Deputy Commissioner Kurram, Javaid Ullah Mehsud, told Arab News on Friday, saying police were yet to file a police report on the incident. 
No one immediately claimed responsibility for the latest attack, which came a week after authorities reopened a key highway in the region that had been closed for weeks following deadly clashes.
Mehsud told reporters a local jirga, or tribal council, had been convened to help restore peace and order.
Previous clashes in July and September killed dozens of people and ended only after a jirga called a ceasefire.
A senior administration official told the AFP news agency mobile signals across the district had been shut down, describing the situation as “extremely tense” with locals staging a sit-in in Parachinar, the district’s main town.
“A curfew has been imposed on the main road connecting Upper and Lower Kurram, and the bazaar remains completely closed, with all traffic suspended,“ the official said.
Shop owners in Parachinar had announced a strike on Friday to protest the attack.
Locals described an atmosphere of fear across the district. 
“The night was spent in tension,” Irfan ullah Khan, a local youth representative, told Arab News. “People in different villages were guarding their homes … The region is in grief as the situation is tense. Anything can happen.”
Interior Minister Mohsin Naqvi called the shootings a “terrorist attack.” Prime Minister Shehbaz Sharif and President Asif Ali Zardari condemned the attack, and Sharif said those behind the killing of innocent civilians will not go unpunished.
Baqir Haideri, a local Shiite leader, denounced the assault and accused local authorities of not providing adequate security for the convoy of more than 100 vehicles despite fears of possible attacks by militants.
Shiite Muslims make up about 15 percent of the 240 million population of Sunni-majority Pakistan.
With inputs from AFP