Tawanai

Pakistan State Oil (PSO) faces serious debt issues and the finance ministry has said that it cannot help. The National Assembly standing committee on petroleum and natural resources has resolved to take up the issue before Prime Minister Yousuf Raza Gilani. Business Recorder reports that:

Cash-strapped PSO had requested for immediate arrangement of Rs 60 billion to ease its financial woes in a meeting held on Wednesday. Special Secretary, Finance, Asif Bajwa, chaired the meeting which was attended by all stakeholders.

“But Finance Ministry has agreed to release Rs 5 billion to Pakistan Electric Power Company (Pepco), which will make payment onward to PSO,” sources said. “Now the third quarter is going to end, and the Finance Ministry will release money during the next month to bail out oil and power sectors,” sources said, and alleged that poor recoveries by Pepco were also the main reason of the circular debt. During the meeting, it was stated that Pepco had sent bills to the consumers and would make payment to PSO during next month.

Meanwhile, briefing the NA body on petroleum and natural resources, PSO Managing Director (MD) Irfan Qureshi said that PSO dues against its clients had exceeded Rs 105 billion. He said that PSO required Rs 57 billion to mature Letters of Credit (L/Cs) for oil import. “PSO may default its L/Cs by April 20 if it is not provided Rs 57 billion,” he warned.

The Oil and Gas Development Company Limited (OGDC) authorities informed the NA body on petroleum and natural resources that litigation issues were resulting in loss of oil and gas. “The country is losing 6000 barrels per day crude oil, 300 MMCFD natural gas and 500 tons LPG per day due to litigation,” OGDC officials said.

Sui Southern Gas Company Limited (SSGC) representative said that the company was to receive Rs 35 billion from its clients on account of gas supply and refunds from FBR. The outstanding of SSGC against KESC stands at Rs 17 billion and Rs 4 billion from Water and Power Development Authority (Wapda). The gas utility is to receive Rs 10 billion on account of refund from Federal Board of Revenue (FBR).

Energy, Oil, Pakistan Pakistan State Oil (PSO), PSO

Pakistan Ministry of Water and Power would provide electricity to around 100 villages through solar energy during this year as part of its programme to ensure light in every village of the country. Electrification through Renewable Energy Technologies in remote and off-grid villages of country is the prime focus of the government which has initiated projects not only to overcome power shortage but also to electrify the remotest parts, said an official at the Ministry.

The official said a project has already been approved to electrify 400 remote villages of Sindh and Balochistan through solar energy. Around 49 villages (3000 households) have been electrified in district Tharparker using solar energy through government own funds.

The funds for remaining work in Sindh and the projects in Balochistan are being negotiated with the donors and are expected to be initiated during this year. Moreover, 100 Solar Home Systems in three villages of district Dera Bugti, 119 Solar Home Systems in 10 villages of Deh Tiko Baran district Jamshoro, Sindh and 200 Solar Home Systems in 16 Villages of district Khuzdar, Balochistan are also being installed through which thousands of people would be facilitated.

The official said in view of the electricity crises in the country the government has given a serious thought to both short and long-term measures. Public sector hydro plants with generation capacity of 347 MW will be added to the system at a cost of US $500 million and 1,700 MW of high efficiency public sector thermal generation would start generation between end 2010 and upto 2012. The outlay for these projects is estimated as US $1.5 billion.

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Consumers, Electricity, Energy, Pakistan, Renewable Energy, Solar, power

Federal Minister for Petroleum and Natural Resources on Friday told National Assembly that the government was making serious efforts to end the load shedding of gas from next year. During question hour, he informed the house that the government was giving incentives to the oil and gas exploration companies for ending load shedding from the country.

Pakistan and Iran are expected to sign an agreement on Iran-Pakistan (IP) Gas Pipeline Project in Turkey during March 8-10, 2010. After signing of the project between the two countries, it would be completed within a period of 3-4 years. This would resolve all issues relating to gas load shedding in the country due to smooth supply of gas from Iran on regular basis, he added.

Responding to a question, he said the government is working on a project to import Liquefied Natural Gas (LNG) to meet the domestic requirements. It would also be instrumental in checking shortage of gas. He said that the load management of natural gas was formally observed for the first time on December 1, in 1982. However, due to lack of proper planning in the past the problem could not be resolved. Load management of gas could only end permanently after matching of supply and demand.

Gas, Natural Gas, Pakistan, Petrol

The strategic fuel reserves have alarmingly dwindled to just seven days for thermal powerhouses, and the government-owned oil marketing company, the Pakistan State Oil (PSO), is virtually penniless now as its outstanding dues, which mainly power sector owes to it, have surged to over Rs100 billion.

“The furnace oil reserves have fast depleted to just seven days from 25 days. If this situation continues, the whole country would plunge into darkness after one week,” a senior official at the Petroleum and Natural Resources Ministry told The News.

“The PSO has written three letters in latest correspondence, each to the Finance Ministry, the Petroleum and Natural Resources Ministry and the Water and Power Ministry intimating them about the appalling oil reserves stocks and its fiscal constraints, which are impeding the import of further fuel in the country,” the official added.

It is pertinent to mention that the PSO has scrapped the import of fuel oil tender because of cash constraints. The public sector oil marketing company in a letter to the Pepco written on February 9 says the entire oil import plan has been disturbed because of the unavailability of the required liquidity.

The letter says if the Pepco does not arrange substantial amount (at least Rs 25 billion) to clear the dues, the PSO will be forced to scrap the tenders. Refineries, which are running under the production capacity by 45 to 60 per cent in the wake of liquidity constraints, have also suspended the supply of products to the PSO as their outstanding dues have jacked up to the whopping figure of Rs 62 billion.

Via: The News

Fuel, Pakistan, Petrol

Pakistan State Oil (PSO), the country’s leading oil marketing company, has posted Rs 5.083 billion as profit after tax in the half year period ended December 31, 2009 as compared to after tax loss of Rs 10.049 billion recorded in the corresponding period in 2008.

Highlights

• Overall, the market share for PSO stood at 71.4 percent during the first half of FY10.
• Despite financial challenges and economic slow down, PSO maintained its leadership in the White and Black Oil market segments with market shares of 56.3 percent and 88.5 percent respectively.
• The reporting period witnessed the transference of 12 percent of the government of Pakistan’s shareholding to the employees of PSO.
• During the first half of FY10, the company signed a Fuel Supply Agreement with Northern Power Generation Company Limited (NPGCL), a subsidiary company of the Pakistan Electric Power Company (Private) Limited (PEPCO), for exclusively fulfilling Furnace Oil and HSD requirements of all the power stations of NPGCL.

Oil, Pakistan financial results, Pakistan State Oil (PSO), PSO

Government of Pakistan awarded a contract to GDF Suez to supply 3.75 million tons per annum of liquefied natural gas (LNG) for a period of 20 years. This is the country’s first gas import project and efforts are still being made to allow Shell to import additional 2.5 million tons during the same period.

The project envisages supply of up to 500 million cubic feet per day of gas. The price of LNG imported from GDF Suez will be $1.8 billon lower than the rates offered by Shell in the first six years, the import price will be around $9.3 per MMBtu said, G A Sabri, senior petroleum ministry official.

GDF Suez will start supplying the gas to Pakistan by Oct. 2011 according to the initial six-year contact. . The company may also supply 1.5 million tons of LNG annually for the following 14 years under the contract, G.A Sabri said.

Via Ibrahimsajidmalick.com

Natural Gas, Pakistan contract, LNG

The Oil & Gas Pakistan Forum 2010 with special emphasis on “Solutions for Sustainability – Pursuit for Steadier Markets” concluded in Islamabad today with speakers providing perceptive insight. Experts stressed on the need to capitalize on the enhanced stability in the global Oil & Gas business, pledging a realignment of policies for a robust future and a collective strategy to recover from the setbacks of the previous years and the need for technology as a driver for future oil and gas initiatives.

More than 300 delegates from government, regulatory bodies, prominent oil & gas companies, stakeholders, members of the Diplomatic Corps and media attended the day-long conference supported by the Petroleum Ministry, MOL Pakistan, Eastern Testing Services and other partners.

The Federal Minister for Petroleum and Natural Resources, Syed Naveed Qamar delivered the Keynote Address, in which he highlighted the most attractive features of the liberal Petroleum Policy and urged the local and foreign E&P companies to proactively enhance their activities and investments in Pakistan for higher productivity. He assured the forum of his complete support and the government’s resolve to protect their interests. Mr. Mehmood Saleem Mehmood, Secretary Petroleum was also present.

Mr. Janos Feher, Chairman, Pakistan Petroleum Exploration & Production Companies Association (PPEPCA) stressed the need for a collection strategy to achieve sustainability and build a steadier, safer and productive market for the oil and gas sector in Pakistan.

Mr. Menin Rodrigues, Chairman of the Conference & CEO of SHAMROCK Communications (Pvt.) Limited in his opening remarks appreciated the efforts of the sector specialists and emphasized the emerging opportunities and challenges in this evident phase of stabilization in this industry across the globe.

Well researched Papers were presented in the various sessions to discuss critical topics including; Regulatory Framework, Incentives, Opportunities, E & P Infrastructure, Business models, Geopolitical Issues; Depleting Reserves, Alternate Energy and Impact of Prices on Economies and an outlook of global perspective. The sessions were chaired by distinguished personalities like; Mr. Saquib Mohiuddin, CEO, Business Support Fund, Ministry of Finance; Mr. Tauqir Sadiq, Chairman-OGRA and Mr. Rune Stroem, Country Director-Asian Development Bank.

The eminent speakers included Janos Feher, Chairman, Pakistan Petroleum Exploration & Production Companies Association (PPEPCA), Dr. Shahab Alam, Director-Petroleum Ministry; Tashfeen Qayyum, CEO, Eastern Testing; Shahrukh Kiyani, Manager Projects, Mari Gas Company Ltd., Sohail Kiani, President-SARF Canada, N.A. Zuberi, Executive Director, Private Power Board; Abbas Bilgrami, Managing Director, Progas and Samir Ahmed, Managing Director, National Commodities Exchange Limited (NCEL).

Mr. Rune Stroem, Country Director Asian Development Bank, gave an indepth overview of the global and regional oil and gas sector opportunities against the backdrop of economic conditions in the respective areas. He said, “Pakistan’s energy issue was a financial issue”. Concluding the conference Dr. Gulfaraz Ahmed, Former Secretary Petroleum eloquently stressed a restructuring of the energy infrastructure with the involvement of professional talent and to harness the country’s vast reserves of natural gas. The conference ended with a vote of thanks and appreciation to the organizers for a well-managed conference

Gas, Oil, Pakistan, Petrol

The minister for water and power Pakistan said the cabinet decided to adopt all the 11 recommendations of the ADB that took about five months to complete its third part audit of the rental power projects. He said the electricity rates would go up by 6.1 per cent if eight RPPs of 1,156MW were implemented as advised by the ADB, but the increase could go up to 9.9 per cent if 14 RPPs of 1,994MW were realised. He, however, agreed that the increase did not take into account the impact of oil that was a pass-through item and its prices could not be estimated.

He said the ADB had also asked the government to remove inconsistencies in RPP contracts if legally possible, to strictly enforce contract timelines and to get their commercial operations certified by internationally acceptable independent engineers.

The ADB had said that the elimination of 100 per cent loadshedding during peak hours was not a viable option from the affordability perspective, he said. The bank had also called for quality controls of old and used RPPs strictly under the trade policy, optimum utilisation of available gas and find new resources aggressively and must continuously run RPPs till 2012 to provide room for improvement in Wapda’s generation plants, he added.

Electricity, Pakistan

Shamrock is organizing a conference for Oil and Gas industry in Pakistan. For more details, please visit Shamrock Conferences web site

Events, Gas, Oil, Pakistan

Crude Oil and Silver Futures contracts were successfully executed at National Commodity Exchange Limited (NCEL), Pakistan’s only regulated and technologically advanced platform. The newly introduced commodities are attracting volumes with Crude Oil 100 barrel futures contract amounting to US $ 615,952 (PKR 52 million) and Silver 500 ounce futures contract observing trades worth US $ 72,911 (PKR 6 Million) during the last week.

Mr. Samir Ahmed, Managing Director NCEL said “These international, US Dollar-denominated contracts now allow direct linkages to the international markets eliminating the exchange rate risk and allowing investors a pure play on commodity price itself. The contracts will add further depth and liquidity to the NCEL platform and create opportunities for new trading and advanced hedging strategies. The listing of these contracts marks an important milestone in this phase of growth for NCEL”.

NCEL is a gateway to an electronically transacted marketplace, with trading, central party clearing and settlement facility; where customers continue to rely on liquidity, price transparency and ensured settlement. The exchange is a reliable and secure platform boasting increased retail and institutional investor demand for over the counter trades and mitigating the risks of counterparty default. This provides effective hedging tools for trade, industry and other market participants who may be exposed to energy and precious metal price risks.

According to Ms. Raheela Khan, Senior Manager at NCEL, the exchange is currently providing trade facilitates in Gold, Silver, Crude Oil, IRRI-6 Rice, Palm Oil and Interest Rate Futures. “During 2009, total rupee traded volume touched 28,029,469,905 with a total of 86,883 contracts reflecting a year- over- year growth of 4485%” informed Raheela. She further pointed, Dec 09 was an exceptional month with a 5.3 billion rupees monthly volume, setting a daily average traded value of 300million rupees and marked the highest ever day trade volume record of 1.29 billion rupee. NCEL volume growth has been phenomenal in 2009 breaching ISE and nearing LSE volumes, however, volumes were mostly concentrated in gold.

In 2010, these volumes are to grow substantially with growing institutional investors and several agricultural, metals, and financial futures contracts to be listed. These new electronically-traded contracts are offered continuously for 20 hours a day from 10am to 6am, five days a week. NCEL is Pakistan’s first and only demutualised exchange with a 100% institutional shareholding. It has 290 members spread all over Pakistan.

Fore more details visit: www.ncel.com.pk or call 111-623-623

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Oil, Pakistan, Petrol