ExxonMobil close to hitting huge oil reserves in Pakistan, bigger than Kuwait’s

Abdullah Hussain Haroon, Pakistan’s caretaker Minister for Maritime Affairs and Foreign Affairs, speaking at the Federation of Pakistan Chambers of Commerce and Industry. (AN photo)
Updated 05 August 2018
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ExxonMobil close to hitting huge oil reserves in Pakistan, bigger than Kuwait’s

  • The US energy giant has drilled up to 5,000 meters near the Pakistan-Iran border, says Pakistan foreign minister
  • If the oil deposits are discovered as expected, Pakistan will be among the top 10 oil-producing countries, ahead of Kuwait in sixth position

KARACHI: The US energy giant ExxonMobil is close to hitting huge oil reserves near the Pakistan-Iran border, which could be even bigger than the Kuwaiti reserves, says Abdullah Hussain Haroon, Pakistan’s caretaker minister for maritime affairs and foreign affairs.

ExxonMobil, the American multinational oil and gas company, has so far drilled up to 5,000 meters close to the Iranian border and is optimistic about the oil discovery, Haroon told business leaders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
If the oil deposits are discovered as expected, Pakistan will be among top the 10 oil-producing countries ahead of Kuwait in sixth position.
Kuwait’s oil reserves make up 8.4 percent of the oil reserves in the world. Kuwait claims to hold about 101.50 billion barrels, including half of five billion barrels in the Saudi-Kuwaiti neutral zone which Kuwait shares with Saudi Arabia.
According to current estimates, 81.89 percent of the world’s proven oil reserves are located in OPEC member countries, with the bulk of OPEC oil reserves in the Middle East, amounting to 65.36 percent of the OPEC total, latest OPEC data shows.
Pakistan’s foreign minister also said that his government has already taken an undertaking from ExxonMobil to set up a generation complex worth $10 billion.
“They are also putting up an LNG berth at Port Qasim, the second seaport in Karachi. They have already paid for the drilling rights in Pakistan,” Haroon added.
He said: “Pakistan is providing a level playing field to foreign investors and they are interested in coming to Pakistan. What we need to do is to meet their standards and attract them to make investment.”
In May 2018, the ExxonMobil had acquired 25 percent stakes in offshore drilling in Pakistan. The agreement was signed at Prime Minister’s Secretariat among ExxonMobil, Government Holdings Private Limited, PPL, Eni and the Oil and Gas Development Corporation.
The agreement has reduced the drilling share of other partner exploration companies to 25 percent each.
Haroon said that Pakistan is being dragged into the US-China trade war but “the country is maintaining its impartiality.”
“When we sought a much-needed external loan from China, which they initially had refused, the US expressed its annoyance,” Haroon added.
Pakistan currently meets only 15 percent of its domestic petroleum needs with crude oil production of around 22 million tons; the other 85 percent is met through imports. The country facing huge current account deficit of up to $18 billion is spending a substantial amount of foreign exchange reserves on import of oil. The import bill of Pakistan rose by to $12.928 billion in the July-May 2017-18 period of the last fiscal year.
Pakistan’s foreign minister also talked about the current water crisis and its impact on Indo-Pak relations. “India is acting to control water flows which would endanger Pakistan’s food security and they would ruin our crops,” he said.
Haroon called for the integration of Karachi Port and Port Qasim so that they could supplement each other in the larger interest of the country.
He underlined the need for a new area for a fish harbor as the existing one has many issues and there is shortage of land. He regretted that the harbor is not well kept and hoped that the European Union will give subsidy for a new one.
Ghazanfar Bilour, president of the FPCCI, said that Pakistan trade was facing global competition both in terms of marketing products and trade diplomacy as the agreement signed by Pakistan to expand exports was not providing potential benefits. “We need strong advocacy to achieve market access for Pakistani products in other leading markets, and correction in the existing bilateral trade agreements,” he noted.
Tariq Haleem, vice president of the FPCCI, called for bringing down the cost of doing business and improving efficiency at all Pakistan ports.
“At Karachi Port, about 27 million tons (import and export) of dry and liquid cargo is handled per annum. But, in actual fact, these volumes were not satisfactory, the reason being the extreme shortage of space at the Karachi port,” he said.


Elected PM, Khan pledges to punish ‘all those who have robbed Pakistan’

Imran Khan’s Pakistan Tehreek-e-Insaf party holds 151 of the 342 seats in the lower chamber of Parliament. (Reuters)
Updated 30 min 3 sec ago
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Elected PM, Khan pledges to punish ‘all those who have robbed Pakistan’

  • Opposition parties allege election rigging and say Khan’s path to power was made easier by the tacit support of the powerful military
  • The economy is likely to preoccupy Khan’s first few months in office

ISLAMABAD: Pakistani lawmakers elected former cricket legend Imran Khan prime minister on Friday and he pledged to bring to justice “all those who have robbed this country” through corruption.
Parliament’s move cleared the way for the 65-year-old Khan to set up a coalition government and his first major task will be to avert a brewing economic crisis after his party swept to election victory on July 25.
Khan’s party won power on an anti-status quo platform, vowing to fight corruption and lift millions of people out of poverty.
Pakistan has been plagued by boom-and-bust cycles and military coups since independence in 1947, as well as by militant violence in more recent years.
Khan, a firebrand nationalist, has promised to create millions of jobs and build world-class hospitals and school systems in the mainly Muslim country of 208 million people.
Among his first challenges will be to decide whether to request an International Monetary Fund (IMF) bailout to ease currency pressures, or seek support from China and risk deepening Pakistan’s economic dependence on its neighbor.
“I want to thank the people and I want to thank God for giving me the opportunity to bring change,” Khan, wearing a black waistcoat over traditional white shalwar kameez robes, said in a combative speech in parliament.
“First of all we have to do strict accountability,” Khan added. “Those who have robbed this country, I will hold each and every one of you accountable.”
In a sign of Pakistan’s bitter political divisions, opposition lawmakers surrounded Khan and disrupted his speech throughout by shouting “thief, thief Imran Khan” and “puppet.”
Khan’s election was only the second democratic transfer of power since Pakistan’s 1947 independence, and came at a time when relations with on-off ally the United States are fraying over alleged Pakistani support for militants waging war in Afghanistan. Islamabad denies aiding insurgents.
Khan’s Pakistan Tehreek-e-Insaf (PTI) party holds 151 of the 342 seats in the lower chamber of parliament, short of a majority, but is expected to form a coalition government with smaller parties.
In Friday’s lower house vote, Khan garnered 176 votes to defeat Shehbaz Sharif from the outgoing Pakistan Muslim League-Nawaz (PML-N) party, who won 96 votes. Khan, who will be sworn in on Saturday, has yet to announce his Cabinet.
His success in the election ended decades of political dominance by two dynastic powerhouses, the PML-N of three-time premier Nawaz Sharif, and the Pakistan Peoples Party (PPP), founded and led by the Bhutto family.
But Khan will face a battle to push through his ambitious reforms and legislative agenda due to the thin majority in the National Assembly. The Senate, Parliament’s upper chamber, is controlled by the opposition.
“Legislative business will be difficult for him,” said Raza Ahmad Rumi, editor of the Daily Times newspaper.
Opposition parties allege election rigging and say Khan’s path to power was made easier by the tacit support of the powerful military, which has ruled Pakistan for nearly half its history. The army and Khan’s PTI deny any collusion.
“The whole nation has rejected this election,” said Shehbaz Sharif, demanding an investigation of electoral irregularities.
Murtaza Abbasi, a PML-N lawmaker, said in Parliament Khan was “brought here by aliens,” a euphemism for the military.
Khan shot back that he had “struggled 22 years” to become premier and would not be “blackmailed.”
“No military dictator raised me. I got here on my own,” Khan said.
How Khan addresses historic civil-military tensions that have dogged successive governments could define his term.
No Pakistani premier has ever completed a five-year term in office, including Sharif, whose most recent stint in power was ended by the Supreme Court last year.
Sharif, who was jailed over corruption accusations several weeks before the election, saw his second stint in power ended by a military coup in 1999.
The economy is likely to preoccupy Khan’s first few months in office, with his administration facing a battle to reduce a ballooning current account gap and a high fiscal deficit, which shot up to 6.8 percent of GDP in the 12 months to end of June.
To deal with current account pressures Pakistan’s central bank has devalued the rupee four times since December, while interest rates have been hiked three times this year.
A sharp increase in oil prices — Pakistan imports about 80 percent of oil needs - has contributed to a current account deficit that widened by 43 percent to $18 billion in the fiscal year that ended June 30.
China has also provided billions of dollars in loans to shore up Pakistan’s foreign currency reserves, which stand at just over $10.1 billion - enough to cover two months of imports.
Earlier this week Asad Umar, widely expected to be appointed Finance Minister, told the English-language Dawn newspaper that Pakistan turning to the IMF would be a “fallback option” and that all other possibilities are being explored.