KARACHI (March 05 2009): The new management of Karachi Electric Supply Company (KESC) has signed an agreement of co-operation in Karachi with the Institution of Engineers, Pakistan (IEP).

According to press release issued by the company on Wednesday, the purpose of the agreement is to provide a basis for the development of mutual understanding and friendly co-operation between the two entities to promote and enlarge the exchange of technical, scientific and professional knowledge for the technical enhancement of skills of KESC employees, the engineering profession in general and to serve the interest of citizens of Karachi in particular.

The signing of this agreement with IEP will facilitate KESC for the enhancement of technical know-how and professional skills of their employees through imparting customised training programme to be developed mutually by the experts of both the entities.

The IEP has come on board to provide services as a gesture of goodwill for KESC and the citizens of Karachi . On the occasion Naveed Ismail, CEO KESC said, "We are highly committed to enhancing the technical skills of our engineering staff and the IEP partnership gives us access to the infrastructure of an internationally recognised body. This can only help further professionalise the quality of KESC's core engineering workforce."

The institute will award certificate to all those KESC employees who will successfully complete the training programme imparted by IEP. KESC shall develop training modules as per requirement and will hand over the same to IEP for imparting training sessions through KESC.-PR.

Copyright Business Recorder, 2009

ISLAMABAD (March 05 2009): Federal Minister for Water and Power, Raja Pervez Ashraf has said that Central and South Asian Republics must promote regional cooperation in all the fields, especially regional power sector to help each other for better future.

He made these remarks while talking to the Ambassador of Kyrgyzstan, H.E. Nurlan Aitmurzaev who paid a farewell call to the minister on Wednesday and discussed various matters of mutual interest and to enhance bilateral trade between the two countries.

The minister while welcoming the envoy said that the Kyrgyz expertise in hydroelectric power generation will benefit Pakistan adding we will welcome and facilitate the Kyrgyzstan to invest and participate in hydroelectric generation projects in Pakistan .

The Ambassador said that Kyrgyzstan has great electricity potential with surplus power and will provide every possible assistance and technical co-operation to Pakistan in this regard. He said that Kyrgyzstan is taking necessary steps for exporting 1000MW power to Pakistan under CASA 1000 project (Central Asian South Asian 1000).

Both, the minister and the Ambassador agreed to hold early meeting of Pak-Kyrygz Joint Ministerial Commission to discuss various matters of mutual interests and to enhance the bilateral trade between Pakistan and Kyrgyzstan . They also discussed to explore the investment opportunities in various sectors and access of the business community to CARs through Gawadar port.-PR.

Copyright Business Recorder, 2009

LAHORE (March 07 2009): Government urged to first execute such short-term power projects, which are easier to construct to resolve the energy crisis being faced by the country. As many as 70 percent of the energy can be saved if buildings are properly insulated for transfer of heat and cold from outside, said recommendations of a seminar arranged by the Institution of Engineers Pakistan (IEP) on "Electric Power Stability and Need of Large Dams."

Government should make arrangements so that all shops and offices must be closed on Sundays while the Factories should be closed on some other day (for instance on Friday). The recommendations further stated that the Government should formulate policy for the construction of buildings and implementation of policy should be mandatory for all agencies responsible for planning design and construction of the buildings.

The immediate measures suggested to the government in the recommendations for the conservation of energy is that the government should take action against billboards and hoarding, which are using excessive lights. Government should try to take all steps to discourage the shopkeepers, which are using more than 3VA per square foot. Further government should abolish all types of import duty and taxes on the import of energy saver lamps to made them affordable for the common man.

The long term measures suggested in the recommendations is that all old thermal units, which are less efficient, should be replaced (in a programmed way) by more efficient combined cycle plants. Further to produce cheap electricity indigenous coal should be used instead of furnace oil etc.

It is also suggested that in big Cities like Karachi , Lahore , Faisalabad etc. Garbage Fired Power Stations of reasonable capacity (for example 100 to 200 MW capacities) should be installed. These have proven feasible in many other Countries. The recommendations also suggested that Professional Management should be implemented at Top levels and even the Ministry Team of capable honest professionals should be formed to oversee the Projects implementation.

Salaries of the low paid staff should be in line with the livelihood. The corrupt staff should be taken to task. High ups should give up recommendations practice for corrupt and inefficient staff. All efforts should be made on self-reliance. It is suggested that We should fight as a nation against all sorts of corruption commonly known as Bribes, Patronage, Kick Backs commissions.

Currently the country is losing 29 billion units of electricity annually due to line losses. A significant portion out of this can be saved since these have a substantial pilferage element. Where line losses are more there are only due to Pilferage. These line loses can only be controlled on the government level.

It is unfortunate that in our country rules and regulations are only effective for poor, average and honest and gentle type people. In the areas of High up whether Land Owners, Sardars and Nawabs or Big High Power Industrialists no one can control the pilferage except Ministers, MNAs, MPAs and Senators of the respective area. Government should take steps to assist Pepco formations in this respect. If measures should be taken to reduce over all at least 5 percent losses/pilferage can be reduced which in turn will save 1000 MW.

It is also suggested that government should start mega hydro power projects like Kala Bagh Dam, Akhori Dam, Basha Dam, Kruuam Tangi Dam and Munda Dam. The recommendations suggested that Kalabagh is the immediate solution, which can provide 3600 MW within five years, if action initiated immediately.

Construction of Kalabagh Dam and Akhori Dam should he given priority being low cost because they could be completed in a shorter period as compared to Basha Dam. Basha Dam is not a priority project as its cost and construction period is double as compared with Kalabagh Dam. Kalabagh Dam has already been approved by the World Bank, Site preparation is well advanced and the work can be started immediately if agreed by the Government and provinces.

The recommendations also suggests the construction of Hydel Power Projects on Run of rivers, which includes Dasu, Thakot, Pathan, Bunji etc should be given top priority. Dasu with a generation capacity of 4000MW is nearest to the load centers and should be completed first followed by other power projects.

Bio -Energy should be used as an energy source. As a result of photosynthesis, plants are able to form biomass and thereby store energy. The use of biomass for energy has great potential for heat and power generation, and for fuel production. Biomass includes wood, organic waste, manure and other substances of vegetable and animal origin.

Pakistan has shown considerable Potential of the existence of Fossil Fuels throughout the country. The three main Sedimentary Basins containing such Fossil Fuels are Pothwar Basin, Sindh Basin, Balochistan Basin.

Copyright Business Recorder, 2009

KARACHI (March 08 2009): Karachi Electric Supply Company (KESC) has started commercial operations of 50MW rental power project for Karachi . The project was completed in less than six months after its announcement in September 2008, and provides additional capacity to Karachis grid, aimed at providing relief to the consumers by minimising power shortfall in the city.

According to a press release issued by KESC on Saturday the project, which marks the fastest ever addition of capacity to Karachis power grid, was completed in two phases of 25 MW each. Installations have been made at two strategic sites of the city, with the current addition having been made in the West Wharf industrial area, while the initial 25 MW has been added at Haroonabad site.-PR.

Copyright Business Recorder, 2009

LAHORE (March 10 2009): Ambassador of Finland in Pakistan Osmo Lipponen called on Punjab Governor Salmaan Taseer here on Monday and discussed matters regarding expansion of educational, cultural and trade relations between Pakistan and Finland. Deputy Head of Mission of Finland, Miia Rainne, First Secretary of Finish Embassy Juha Rainne as well as Honorary Consul General of Finland Shahid Attaullah were also present on the occasion.

The Finish Ambassador during the meeting offered transfer of construction of thermal power station technology to Pakistan . He said in spite of being a small country with regard to population, Finland is among the leading countries that make investment at international level. He also said the volume of investment of Finland in foreign countries is more than that of Peoples Republic of China . "Just as more than 200 companies of Finland are operating in India , similar investment opportunities should be created in Pakistan for Finish investors in the sectors of power generation, telecommunication and mega projects and it is expected that this process would start within next year.

The Finish government is also ready to collaborate with Pakistani Universities for introducing various courses of four years duration. This experiment with the universities of Nepal and India has proved very successful," he added.

Punjab Governor Salmaan Taseer welcomed the offer of the Ambassador of Finland for co-operation in education sector. He expressed the hope that the social democratic government of Finland would co-operate with the Pakistani government at a large scale in the execution of the projects of public welfare in Pakistan . He also referred to the former Noble Laureate President of Finland who despite his political engagements had served as a teacher in a school voluntarily for two years. He also expressed desire that in addition to promotion of co-operation between Finish and public sector universities of Punjab; Finland would also extend co-operation for raising the standard of government schools in Punjab .

The Governor informed Finish Ambassador that open merit policy is being strictly implemented for admission to government universities in Punjab . "It is very encouraging that 60 percent enrolment in Pakistani universities is of highly talented female students who would help in introducing Pakistan as a moderate and enlightened society which is capable of competing with the world," he added.

Referring to the reaction to Governors rule in Punjab, Salmaan Taseer said it is not an unconstitutional step; the provincial governments are also dissolved in Europe but no one rises in revolt. He said no political party has simple majority in Punjab and floor crossing is not permitted under the law. As such, he said, political alliance between two parties is necessary for majority after, which it would be possible for him to invite parliamentary leader of coalition to prove his majority at the floor of the Assembly.

He said that present Governors rule in Punjab is democratic in its nature and the Punjab Assembly is also intact. "There is no violation of human rights nor section 144 or emergency has been imposed and people have freedom of expression. No arrest has been made nor any rally has been tear-gassed. However, no government could ignore violence and hooliganism under the garb of political liberty. The government is not concerned about long march however, it is worried about the miscreants who might pose threat," he added.

Copyright Business Recorder, 2009

ISLAMABAD (March 10 2009): The Pakistan State Oil (PSO) has worked out 768,000 tons furnace oil requirements of Pepco's thermal power stations and independent power producers (IPPs) for March and April, to be imported from different countries, official sources told Business Recorder.

As far as the requirements for the month of February 2009 are concerned, sources said that supplies to 'Gencos' had been executed against the purchase order quantity during the first fortnight of February 2009 whereas in the same period deliveries to IPPs were executed against payments already made. Sources said that Muzaffargarh thermal power station's requirement is 163,000 tons, Jamshoro, 45,000 tons; Faisalabad 18,000 tons, and Piran-e-Gaib 12,000 tons.

The requirement of AES Lalpir and Pakgin has been estimated at 120,000 tons, KEL, 21,000 tons, Saba, 24,000 tons, Hubaco, 225,000 tons, Kapco LSFO 120,000 tons and Kapco HSD 20,000 tons. Sources said that per day requirement of IPPs and Gencos is 25,600 tons, of which 103,000 tons would be supplied through Pakistan Railways, 365,000 tons by road, and 300,000 tons by pipeline.

PSO is of the view that Railway's assurance is essential for providing sufficient fleet to move the required quantity. In this context, Pepco has been asked to impress upon Pakistan Railways for arrangement of adequate rolling stock for maximum lifting through tank wagons. From the data of recent months, the present total capacity of Railways for LSFO/HSFO movement to cater to the power sector fuel requirement is approximately 95000 tons per month. Sources said that IPPs have also been asked to make timely payment to PSO to avoid any interruption in supply.

The projected volume of TPS Muzaffargarh has been given based on the consumption pattern when the station is operated on full capacity with sizeable stock. Similarly, Jamshoro TPS requirement has to be rationalised in view of maximum consumption which has been recorded at 1100-1200 tons/day, whereas estimates are at 1500 tons/day.

"We feel confident that if availability of local product is ensured ,and the Railways provide the required fleet, PSO will make all-out efforts to meet the projected fuel oil requirements during the period under reference," sources quoted PSO General Manager Industrial Consumer as saying in a letter to Pepco Thermal General Manager.

On February 14, Pepco representatives had provided data sheet regarding furnace oil requirements of IPPs and Gencos for the period February 10, 2009 to April 30, 2009 for PSO's review and comments,

"We are of the view that the furnace oil volumes are projected on higher side, without taking into consideration the logistics and operational issues, particularly jetty constraints, thus showing a significant variation in comparison to the actual upliftment by IPPs and Gencos in the corresponding period last year," sources said.

Copyright Business Recorder, 2009

ARTICLE (March 12 2009): Pakistan Power Resources (PPR) pioneered the concept of fast-track, rental Power Projects in Pakistan and owns and operates the 136MW Bhikhi Power Plant in District Sheikhupura. PPR is in the process of setting up additional fast-track, rental Power Projects to cater to Pakistans urgent energy requirements.

Awarded through an internationally-competitive bidding process, the 136MW Bhikhi Power Plant was set up in a span of only eight months and dispatched highly-affordable electricity to the national grid. The fast-track Bhikhi model is being replicated to urgently and efficiently enhance Pakistans power generation capacity.

The Government of Pakistan has announced the addition of 2,200MW by the end of the current financial year through fast-track, rental Power Projects. "We are pleased to be contributing to Pakistans energy sector by adding power generation capacity on a fast-track basis," said PPR Director Razi Ahmed. PPR has been awarded the 110MW Guddu Power Project and the 192MW Multan Power Project. With the successful implementation of these two Projects. PPR will have invested over $350 million and installed 438MW of power generation capacity. "PPR remains committed to providing expeditious and economically-viable solutions to meet the countrys pressing power needs," said Mr Ahmed. Associated Group (AG) is the principal sponsor of PPR.

The foreign co-sponsor is Walters Power International, owned by former Oklahoma Governor David Walters. PPR is an Oklahoma-incorporated company with its Pakistan operations headquartered in Lahore . AG, founded in 1965, is one of Pakistans premier business houses in the energy sector. AG is the largest producer, transporter and marketer of LPG, AG is also rehabilitating Pakistans only coal-fired Power Plant, and is developing the Pakistan GasPort Limited LNG Import Terminal and LPG Extraction Facility at Karachi.

Copyright Business Recorder, 2009

UAE, South Korea to set up coal-based power plant

KARACHI (March 15 2009): Sindh Chief Minister Syed Qaim Ali Shah Saturday held a meeting with a 8-member delegation of UAEs Bin Din Group and PEDCO of South Korea, working on development blocks of Thar Coal Project and considered the details of Letter of Intent.

According to details, the Korean Firm would work for three years in Blocks 4 and 8, and start drilling and boring for coal mining, where-after power generation will start. The Korean group will set-up Mine-mouth Thermal Power Plant of 1000 MW, by using Thar coal reserves.

The meeting was informed that Mines and mineral development dept, Law dept, Thar Coal and Energy Board and Chief Ministers Secretariat would examine the details of the agreement, being prepared for the proposed project. The Thar Coal Energy Board is going to have an important meeting on Tuesday and signing of the agreement is expected on Thursday.

The Chief Minister assured of all possible assistance and co-operation of Sindh Government to the delegation. The PEDCOs representative informed that theres is a major power company of the world and will soon start coal mining. He said the Mine-Mound power plant would cast a positive and soothing impact in Pakistans economy.

He said the plant, after completion, would be Pakistans first and biggest thermal plant which would make energy available to two million households and six lac industrial units. It will generate job opportunities for 90,000 skilled and non-skilled workforce.

Copyright Associated Press of Pakistan, 2009

ISLAMABAD (March 15 2009): Minister for Water and Power, Raja Pervaiz Ashraf told the National Assembly on Saturday that Alternative Energy Development Board (AEDB) has initiated many projects for introduction of alternative energy in the country.

Replying to a question from Abdul Qadir Patel, MNA during Question Hour session, he said that next month first commercial scale wind power plant in the countrys history will be ready for inauguration.

He also said that first public sector wind project of 50 MW has been signed with Karachi Port Trust. He added that 40 micro wind turbines have been installed in Karachi , while 125 KW wind turbine are already operational in Landhi, Karachi . He said that in solar energy sector, 3000 off grid, rural homes were electrified through solar energy in district Tharparkar, Sindh.

Raja Pervaiz Ashraf said that a solar energy project for 300 villages in Balochistan was waiting for funds. Pilot projects for PV water pumping and solar water heaters have been approved for World Bank financing, he added. He said that ECC has approved policy recommendations for use of bio-diesel as alternative fuel.

Copyright Associated Press of Pakistan, 2009

KARACHI (March 16 2009): The Thar Coal Power Project (TCPP) would attract over $20 billion foreign investment within next six months, an official of Sindh Coal Authority Board (SCAB) told Business Recorder on Sunday. According to Sharjeel Memon, one of the SCABs governors, a host of interested companies from United States , China , Britain , Singapore , South Korea , Germany , Poland , Australia etc would invest over $20 billion in the Tharparkar-based energy project.

Memon, who is also the member of provincial assembly of Sindh, revealed that even the neighbouring India had shown interest in the attractive coal-based power generation project, TCPP. He, however, opined that tension at border and an ongoing blame-game between the two nuclear-armed South Asian neighbours were likely to keep New Delhi away from the project. The SCAB official also linked the expected investment with an early end to the ongoing political turmoil in the country.

"Lots of MoUs have been signed and a host of foreign firms keen to invest in the coal sector are visiting the Chief Minister on almost daily basis... work is underway on war footing basis," he added. Also, he said, President Asif Ali Zardari, during his recent visit to China , had inked different MoUs with the investors in Beijing .

He said a nine-member Korean delegation, which had held a "fruitful" meeting with Chief Minister Syed Qaim Ali Shah last Thursday, would soon start boring for mining in Blocks 4 and 8 of the site.

The coal exploration work would follow the power generation process that, the MPA said, was a federal subject and would be carried out by Islamabad .

According to Memon the TCPP would help Sindh province generate at least 7000-8000 MW electricity by 2012, which would not only cater to the countrys 3,500MW power shortage, but would also be exported to the neighbouring countries. He said the provincial government had undertaken a fast track infrastructure development in Thar, along with a coal based mine-mouth thermal power plant by a Korean firm at an estimate cost of $3 billion. According to Asad Ali Shah, another SCAB member, a coal-based power generation plant in Thar would help Pakistan save a huge sum of $8 billion it was presently paying for imports of oil to run its power generation units. A recent study has revealed that Tharparkar has 175 billion tons of coal reserves with a best power generation quality, he added.

Copyright Business Recorder, 2009

ISLAMABAD (March 17 2009): Azad Jammu Kashmir (AJK) Government has kicked off construction work on hydel power project of 1.7 megawatt worth Rs 300 million in a bid to explore the power potential in this Himalayan region. The Dhanna Khoi Ratta, Hydel Power Project is one of the projects of 5,594MW potential explored in AJK.

Prime Minister AJK, Sardar Muhammad Yaqoob Khan on Monday laid the foundation stone of the project, which will start power generation in 30 months and give AJK an income of Rs 40 million per annum. The project, being constructed by Alamdar Engineering, will be handed over to AJK Government in 2011, and will provide employment to 150 to 170 people during construction and after completion 35 to 40 people will get jobs on this project.

AJK Premier told the gathering that AJK government will start work on 969 MW Neelum- Jhelum Hydel Power Project soon, while feasibility studies of 1000 MW Kohala Hydel Project will be completed next year.

With completion of these two projects, AJK will be in a position to run the stalled wheel of industry and agriculture by providing it electricity. He said that besides these two projects, potential of more about 15,000 MW hydro power project was traced in AJK, which can change the ultimate socio economic scene of AJK and of Pakistan as well.

He said that AJK Government is in contact with WAPDA for utilising the hydro power potential of AJK. Wapda has offered AJK Government to help construct the power project below 50 MW capacities. "In next weeks meeting with WAPDA authorities, we will talk to them for initiation of other mega projects of hydel power generation", he added.

He asked the industrialist and investors of Pakistan invest in highly profitable hydro-power generation in AJK, as it will help in eradication of poverty, as AJK have the potential of over 15,000 MW hydro power generation. "We have almost completed the studies of projects of over 5,594 MW hydro power generation and if launched these projects will help end power crisis in Pakistan . "In my personal meetings with private sector, I told them that AJK was completely safe and secure for investors and law and order situation and public approach is ideal for investment", Yaqoob Khan said.

He said that Pakistan was facing a shortfall of about 4,000 MW electricity, which has badly affected the industrial and agriculture sectors and damaged economy. "If Pakistani investors will invest in this sector, it will help the country not only to run the stuck industrial wheel but also help eradication of poverty, unemployment and economic disorder", he said.

Giving details of the explored hydel power potential in AJK, the premier said that potential of 2,468 MW was explored in Muzaffarabad, 1,369 MW in Mirpur, 231 MW in Poonch, 645.4 MW in Kotli, 338.85 MW in Bagh and 541 MW in Neelum districts of AJK. At present AJK is generating just 37.65 MW electricity, while it needs 400 MW he said.

He said that the work in progress on hydel power generation projects include 3 MW Sharda, 3.2 MW Sharian, 1.7 MW Dhanan, 4.8 MW Batter, 0.6 MW Hallan, 0.6 MW Rangarr, 0.32 MW Halmatt and 3 MW Qadirabad power projects. The feasibility study of four projects of 63.80 MW hydro power generation has been completed and will be kicked off soon. These projects include 43.5 MW Kuttan Jagran-II, 14.4 MW Jheng, 3.2 MW Rerra and 3 megawatt Hajeera, he added.

Copyright Business Recorder, 2009

ISLAMABAD (March 19 2009): Prime Minister Syed Yousuf Raza Gilani has said that Pakistan offers enormous investment opportunities, particularly in the field of hydrocarbons, as there is a surge in energy demand due to high economic growth and improvement in the living standard of the people.

The Prime Minister was talking to a delegation headed by Mr Paolo Scaroni, CEO/Chairman ENI Italy, which called on him here at the PMs House Wednesday. Terming energy exploration as one of the most under-explored sectors in Pakistan , the Prime Minister said that the demand is increasing rapidly and the government is encouraging investment to enhance production in this field.

He said the government is continuously monitoring the demand and supply situation of energy and will take every step to meet the demand of energy to maintain the momentum of growth and development. He said local as well as global companies are being encouraged to invest more in this sector and the response in this regard is encouraging.

Due to high demand in energy and power sector, the Prime Minister proposed that ENI Italy may also explore possibilities to invest in relevant sectors like power generation, petrochemicals besides, doing more exploration in the field of oil and gas.

The Prime Minister, while commending ENI Italy for its exploration activities, said that the Government of Pakistan desires that ENI may also expand their activities in upstream sector.

The Prime Minister said that Pakistan and Italy enjoy good economic and trade relations and called upon the need to further improve the current level of trade between the two countries. He said successful implementation of wide ranging structural reforms and good macroeconomic policies have transformed Pakistans economy into a stable and resurgent one, thus making it attractive for foreign investors.

Paolo said that Govt of Pakistans policies for investments, particularly in the field of hydrocarbon exploration are very attractive and ENI Italy has planned to enhance investments in future. He expressed keen interest in investing in offshore oil exploration and energy sector.

They will be signing an MoU on Thursday (today). ENI is an Italian based oil & gas exploration company and is doing business in 70 countries. The company primarily focuses in areas of exploration & production, gas & power, refining & marketing, construction and petrochemicals. Advisor to PM on Petroleum and Natural Resources, Dr Asim Hussain, Chairman BoI, Mr Saleem H. Mandviwala, Secretary BoI and Secretary Petroleum also attended the meeting. Italian Ambassador to Pakistan was also present on the occasion.

Copyright Business Recorder, 2009

ISLAMABAD (March 19 2009): The National Electric Power Regulatory Authority (Nepra) has allowed power distribution companies (Discos) to increase electricity tariff from 33 paisa to Rs 1.96 per unit across-the-board except for lifeline consumers. Nepra has already dispatched the revised tariff to the Ministry of Water and Power for issuing notification which is expected soon as this raise is part of the agreement signed between the government and the International Monetary Fund (IMF).

Hyderabad Electric Power Companys request to the authority was considered for monthly adjustment of Power Purchase Price (PPP) variation for January 2009. According to the information given to the authority, the power purchasing agency CPPA was Rs 6.7047/kWh which was Rs 1.2633/kWh higher than the reference PPP of Rs 5.4414/kWh. After incorporating the impact of target distribution losses of 34 percent, the required tariff revision was Rs 1.96 per kWh. This adjustment will apply to all the consumers except those who consume 50 units or less in a month.

Nepra has determined Rs 1.47/kWh for the consumers of Mepco, Rs 1.35 per unit for Fesco, Rs 0.85 per unit for Gepco, Rs 0.78 per unit for Pesco, Rs 0.84 per unit for Lesco and 51 paisa per unit for Iesco and Qesco 33 paisa per unit. According to the Letter of Intent (LoI) agreed between Pakistan and the IMF, "the average base tariff will be further increased during 2008-09 according to a schedule to be agreed with the World Bank by end-December 2008 (structural benchmark)."

The government has recently increased power tariff by 6 paisa per unit across-the-board from February 25, 2009 whereas on January 30, Nepra had allowed the Discos to readjust their consumer-end tariff upward in the light of the revised Power Purchase Price (PPP).

According to sources, the quantum index of large scale manufacturing (LSM) has already registered negative growth of 5.35 percent in the first seven months of the current fiscal year (July-January) 2008 as against positive growth of 5.08 percent in the same period of last year. The main reasons of this decline in QIM growth was due to power and gas shortage, which is one of the basic inputs of industry. The new raise, if notified as per plan of the government, would hit all segments of society and further propel the inflation rate.

Copyright Business Recorder, 2009

SIALKOT (March 20 2009): Under the fast track policy of the government initial development work on two-power projects has been started for generating 500 megawatt electricity in Sialkot and Narowal districts. Official sources told Business Recorder here on Thursday that Sahuwala ( Sialkot ) rental power project would generate 200 megawatt electricity and this project would be operational in October this year.

Similarly, Hubco was establishing power project, which would generate 300megwatt of electricity in Narowal and it would be operational in 2011. It is expected that the regular functioning of Sahuwala ( Sialkot ) power project would be much supportive in reducing the power crisis being faced by the industrial sector of this export-oriented city and hub of cottage industry. This is a major achievement in attracting private sector to overcome present load shedding as per government commitment to the nation, sources said.

Copyright Business Recorder, 2009

SEOUL (March 24 2009): A South Korean energy development firm has signed an agreement with the Pakistan government for a stake in a coal mine in the Thar desert region, the firm said on Monday. South Koreas Pan Energy Development Co (PEDCO), with UAEs Bin Din Group, had secured the stake in coal blocks in the area, which has about 2.56 billion tonnes of estimated reserves, about 40 times the amount of coal used each year by local generators in South Korea .

The Thar region, east of the Karachi , is reported to have the worlds largest coal reserves of about 100 billion tonnes or more. PEDCO said that the Pakistan government is requesting two coal power plants with 500,000 kilowatts capacity and the firm is closely in talks with state-power monopoly Korea Electric Power Corp (KEPCO) PEDCO expects coal production of 2 million tonnes by 2011 from the blocks, and 10 million tonnes from 2015.

Copyright Reuters, 2009

BEIJING (March 25 2009): A foreign banks consortium, comprising BNP Paribas, HSBC Bank plc, the Export-Import Bank of China, has signed a Sinosure buyer credit facility agreement of 150.151 million dollar with Northern Power Generation Company Limited for construction of 425 MW combined cycle power project at Nandipur, Finance Director of the company Ijaz A. Babar told APP.

The CIC France is also a part of consortium through a participation agreement with BNP Paribas, France, he said. Northern Power Generation Company Limited (NPGCL) is the biggest thermal generation company operating under the overall management of the Pakistan Electric Power Company (Pepco).

The agreement was signed with the consortium, comprising worlds top class banks like The Export-Import Bank of China, BNP-Paribas, France, HSBC Bank plc, Paris branch, and CIC France on Thursday, he said. NPGCL is constructing a 425 MW combined cycle power plant at Nandipur, near Gujranwala with the EPC cost of 329 million dollars.

The main EPC contractor is a leading Chinese company, Dongfang Electric Corporation Limited, with sub-contractor G.E. France. The credit facility is covered by China Export and Credit Insurance Corporation. Ijaz Babar said that earlier, a foreign banks consortium, consisting of BNP-Paribas, France, HSBC Bank plc, Paris branch, and CIC France had signed a Euro 68.97 million Coface Buyer Credit Facility Agreement on October 3, last year for the project.

BNP-Paribas, by signing both the credit facilities, has now also fulfilled its commitment as initial mandated lead arranger made for the project with the government of Pakistan , Ijaz said. Appreciating the financial deal, Ijaz said that in spite of the fact that the world was passing through grave economic crisis, these banks had fulfilled their commitment, which exhibited confidence they had on strong fundamentals of Pakistans economy.

Ijaz said that the agreement would help in a long way in improving the financing arrangements for the other projects in the pipeline by Wapda/Pepcos corporatised entities namely 425 MW Chichoki Mallian;

700-800 MW Guddu power project; and 969MW Nelum Jehlum hydropower project with due support from Chinese and European banks. Chief Executive Officer Muhammad Rafiq Butt and Finance Director Ijaz A. Babar signed on behalf of Northern Power Generation Company, whereas Chief Executive Officer Francois Cristofari and head of Export Finance (Middle East/Africa) Gerard Lagouarde, signed on behalf of BNP Paribas (China) Limited.

Amongst other signatories to the agreement was Deputy General Manager of the Export-Import Bank of China Zhu Li and Director of Middle East and South Asia of HSBC Bank plc Simon Lee. First Vice-President Jacques Vincent especially visited to sign the participation agreement with BNP Paribas.

The signing ceremony, held last week, was attended by Deputy head of Pakistan mission Abdul Salik Khan, Minister (Economic) Sardar Aminullah Khan and Commercial Counsellor Naeem Khan.

Abdul Salik Khan, expressing his views, said that financial close of such an important project at this point reflected a confidence of financial institutions on the strong economic indicators and policies of present government of Pakistan , and congratulated all the participants for this success. Signing ceremony was followed by a dinner, hosted by head of Export Finance, BNP Paribas ( China ) Limited Antoine Gustin.

Copyright Associated Press of Pakistan, 2009

HELSINKI (March 25 2009): Wrtsil company received another major order from Pakistan, by Liberty Power Tech Ltd, an independent power producer (IPP). The contract value is about euro 137 million. Total gross power output of the plant is 200 MWe, located near Faisalabad , Punjab , it is due to be commissioned in December 2010, and would supply electricity to the countrys national grid.

This order follows three other IPP projects signed by Wrtsil in 2007 and 2008. Including last four orders, total generating capacity delivered by Wrtsil to Pakistan , will exceed 1700 MWe.

Liberty Power Tech combined cycle solution is EPC (engineering, procurement and construction) order and comprises 11 Wrtsil 18V46 generating sets. In addition to equipment supply, Wrtsil will erect, test, commission plant, and provide local construction supervision.

An O&M contract to operate and maintain it is under negotiation between Wrtsil and the customer. "The need for power generation and energy production is growing rapidly in Pakistan . With Wrtsils support and advisory services, we have been able to arrange financing for power plant project," said Ashraf Mukaty, Sponsor-Director of Liberty Power Tech Ltd.

It will have notably high overall efficiency of 45 percent for lifetime of plant when running on heavy fuel oil at site conditions. This level of efficiency on low-cost fuel oil will enable generating costs to be very competitive.

"We look forward to serving Liberty Power Tech throughout its lifecycle. It endorses reputation of Wrtsil equipment and service capability we are able to provide," said Nomi Ahmad, Regional Director, Middle East , Wrtsil Power Plants. Liberty Power Tech signed Power Purchase Agreement with National Transmission & Despatch Company, and Implementation Agreement with Pakistan Government under 2002 Energy Policy.

Copyright Pakistan Press International, 2009

KARACHI (March 26 2009): Karachi Electric Supply Company (KESC) Wednesday signed an agreement with ABB, a Japanese firm to help the consumers for electricity conservancy to minimise the ever-increasing power demand in the metropolis. The firm will help and educate the consumers for consuming minimum electricity through introducing quality energy efficient lighting solutions, both for consumer as well as industrial applications to conserve energy.

This was stated by Naveed Ismail, Chief Executive Officer, KESC, while addressing a press briefing, after signing the agreement with ABB at companys headquarters on Wednesday. He said that the move of informing people about the electricity conservation would begin from schools, where children would be taught how to save energy.

The CEO further said that the two power generating units of Bin Qasim Thermal Power Plant (BQTPP) would be operational soon. In reply to a query he said that as Karachi Water and Sewerage Board (KWSB) has not paid the dues of Rs 6.8 billion to the company, electric supply to it would be disconnected.

"It was the City District government Karachis (CDGK) responsibility to switch off the street lights which some times are on the whole day," he said adding that installations on the City Governments land were covered under law.

The ABB representative said that they would work closely with consumer groups, consultants and other stakeholders for enhancing the use of quality energy, efficient lighting solutions both for consumers as well as industrial applications to conserve energy. He also explained different tips of energy conservation to consume minimum electricity.

Copyright Business Recorder, 2009

PESHAWAR (March 25 2009): The Energy Monitoring Cell (EMC), established by NWFP government in its finance department helped in saving Rs 9 billion in the head of over-billing during last four years in electricity bills of the provincial departments. This was stated in a briefing on the cell to provincial Minister for Finance, Mohammad Humayun Khan here on Tuesday.

EMC Project Director Kiramat Ali Rizvi briefed the minister regarding the performance of the project during first phase completed in June 2008. The project had cost Rs 39.398 million and saved a huge amount of Rs 9 billion. The EMC obtained a credit of Rs 1 billion from Pepco against excess billing during 2003-2006 and clearance of equal amount was in the pipeline.

The minister was told that the EMC was also providing guidance to other provincial governments to resolve the issues pertaining to Pepco. It was stated that after successful completion of 4 years, the EMC had been extended to a period of more 3 years with a cost of Rs 39.270 million and an online system had been developed with the district governments in which software were being used to deal with matters relating to Pepco.

The EMC was also assisting in rectification of wrong adjustment made by Wapda and replacement of defective meters as well as dealing with old pending credit cases of the NWFP government with Pepco and Pesco. The minister was informed that due to the constructive approach of the EMC, increased tariffs were applied by Pepco in provinces other than NWFP where the EMC succeeded in stopping the same increase.

NWFP Minister for Finance, Engineer Humayun greatly commended the activities of the Energy Monitoring Cell (EMC) of the Finance Department. He underlined the need for better management on the part of EMC officials so that the unit could play far better role in monitoring the financial matters with the federal government, Pepco, Pesco and other departments, keeping in view the interests of the people and to ensure better service delivery in all wings of the finance department.

Advisor to NWFP Chief Minister on Finance, Ziaur Rahman, Special Secretary, Finance, Abdul Samad Khan, Secretary, Excise and Taxation Sajid Khan Jadoon, Project Director EMC Kiramat Ali Rizvi, Senior Economic Advisor Fareeha Fah and other officers were present on the occasion.

The minister said that in other departments minor mistakes were being ignored but in the finance department there was no room even for a minor mistake, and called upon the department high-ups to make everything on clear footing as they were the most important organ of the provincial exchequer. Earlier, he opened the new premises of the EMC by cutting the tape. He also inspected all sections of the EMC and exchanged views with the staff on duty.

Copyright Business Recorder, 2009

LAHORE (March 27 2009): Pakistan Electric Power Company (Pepco) has expressed the hope that the situation of power supply would improve by 31st March and the load shedding duration would be reduced substantially, emerging out of low releases from Tarbela and Mangla reservoirs. It may be noted that the power system was facing shortage of 1500 MW during day times and up to 2500 MW during peak hours.

This shortage, which is likely to continue until March 31, 2009, is resulting in 6-8 hours of closures/load shedding for general customers, while only four hours of closures are being faced by the industry, including textile mills. The Pepco spokesman said the above 06 to 08 hours load shedding is being undertaken by the Discos on the basis of firm schedules already published in the media. In fact, no deviation has taken place and the schedules are being followed in true letter and spirit, he added.

However, it was explained that a System Maintenance Programme is also underway on a sustained basis around the year for all Discos. The spokesman added that the shutdowns, required for maintenance and also being availed by the Discos, are unfortunately being perceived as part of load management, which is not the truth.

Furthermore, these shutdowns only relate to up to a maximum of two percent of the system/total number of distribution 11 KV feeders and thus cannot be made or considered as a part of any load management/load shedding programme. As such, Pepco spokesman requested the media and the valued customers to kindly differentiate between the small number of shut downs for maintenance and the scheduled load management hours/timings.

The Pepco, said the spokesman, was doing all possible arrangements for minimum disruptions in supplies through more than the optimum running of generation plants, which were also being worked for efficiency enhancement of 300 MW on the fast track. Meanwhile, about 300 MW enhancement has already taken place in 2008.

The spokesman hoped that the present power deficits would reduce after enhanced water releases from Mangla and Tarbela from April 01, 2009, onwards and similarly would reduce the duration of load shedding hours. He said as many as 19 new power projects (IPPs and rentals), totalling 3,502 MW will come on bar well within the year, consequent of which load shedding would end as targeted by the end of this year. These would be in addition to the two IPPs of 246 MW already connected to the system during late 2008, he added.

He said with addition of the above level of new generation capacity, enhancement of Pepcos own generation capacity by 600 MW, reduction in high power demands for non-productive sectors because of Pepcos awareness campaign helped by the media and clearance of the present level of intra-corporate or circular debt to the tune of Rs. 81 billion or so through issuance of TFCs in the next day or two, it is a surety that power deficits and ensuing load management hours would greatly reduce by the day and eventually we would be rid of the problem by the end of this year. However, the spokesman said that the situation could further be eased and ameliorated, if our customers help us through a reduction in their demands and by taking-up conservation.

Copyright Business Recorder, 2009

KARACHI (March 27 2009): Turkish investors are keen to invest in alternative energy projects and a Turkish company, Zorlu Energi, will invest some $500 million in windmill project, said Fethi Etem, Consul General of Turkey.

Addressing the launching ceremony of advisory service of Escorts Investment Bank Limited of Turkey in Karachi , he said that Zorlu Energi Pakistan Ltd, a Turkish company, had already made $110 million investment in the windmill project and in the first phase five windmills were being installed in Jhimpir (Sindh) with an electricity generation capacity of 6 megawatt each.

He said that at present the Turkish company had obtained license from Alternative Energy Development Board for generating 50 MW electricity and was planing to extend its operation. "Zorlu Energi would expand windmill project up to 300 MW with further investment of some $500 million in the near future", Fethi added.

Consul General of Turkey said that Turkish companies are interested to invest in livestock, engineering, textile, leather, construction and other sectors with an aim to boost the bilateral trade, he said. Although Pakistan and Turkey are the two Muslim countries, but the trade volume is less than the one billion dollar and stood at 740 million dollar, he said, adding with some initiative we can boost it to one billion dollar annually.

Foreign Direct Investment in Turkey was $17.7 billion during the last year, he informed and offered Pakistani businessmen to invest in the Turkey , where a lot of opportunities are available for new business. Rashid Mansur, President and CEO of Escorts Bank, said that bank will provide advisory services to the businessmen of both countries for the mergers and acquisitions, joint ventures, imports, exports, brand promotions, distribution of products and services.

He said that Escorts Banks average return on equity stood at 20 per cent during the last five years and bank has also distributed some 20 per cent dividend. "We have introduced "Merhaba Turkey " country specific corporate advisory services, which help boost the bilateral trade between the two countries, besides opening new avenues of investment", Mansur said.

Copyright Business Recorder, 2009

ISLAMABAD (March 29 2009): President Asif Ali Zardari said on Saturday that 30 billion-dollar investment had been planned for power sector by 2016, of which 20 billion dollars would be contributed by the private sector. Addressing the joint sitting of the Parliament, the President said the investment in power sector included development of the long awaited Thar coal project.

The President said that the government inherited power shortage of around 3,500 megawatts, and added the private sector had been encouraged to come forward. A number of IPPs and rental power projects were being set up and some of them would be commissioned this year, he said.

The President said that construction of 1000 MW Neelum Hydel Project in Azad Kashmir had started. The source of eight billion-dollar funding for Basha Dam had been identified, the President said, adding its construction would start in about a years time.

About economy, he said that when the government took over, it faced a situation of near economic meltdown due to problems inherited and also due to global recession. The government inherited massive shortfall in energy, dwindling foreign exchange reserves and rising inflation, he said, and added that the difficult decisions had to be taken for economic stability.

A home grown economic reforms programme was developed, he said, appreciating the Prime Minister for taking difficult decisions. These decision were difficult but were necessary, said Zardari. The President said the reforms programme had started showing results with inflation declining from over 25 percent in August 2008 to 21 percent, which would come down to single digit by next fiscal. "Since the second quarter, there has been no net borrowing from the State Bank of Pakistan . The rupee recovered some of the value it lost in October 2008," he said.

The remittances, according to the President, have grown in the first eight months of the on-going financial year. Foreign exchange reserves stood at 6.4 billion dollars in November last and a week ago, it was over 10 billion dollars, he said

Copyright Business Recorder, 2009

ISLAMABAD (April 01 2009): Federal Minister for Water and Power Raja Pervez Ashraf on Tuesday urged the investors of United Kingdom to invest in mega water reservoirs including Bhasha dam. Speaking at a luncheon reception hosted by Alternative Energy Development Board (AEDB) in honour of the visiting Pakistan-Britain Investment Forum (PBTIF), Ashraf said that Pakistan had potential of 25000 MW thermal power generation.

He said the government was working to build large dams and Bhasha dam was one of them that would be completed in eight years. PBTIF may be a great help in this regard, the minister said. He said that Pakistan had 195 million metric tons reserves in Thar and the government was also working to exploit these reserves for power generation.

He also invited British businessmen to invest in Pakistans renewable energy sector. He said that Pakistan was offering attractive incentives to investors willing to exploit this environment-friendly but largely unexplored sector especially for power generation.

Pakistans renewable energy sector, the minister said, would be reaching a milestone with the inauguration of the first wind farm in Jhimpir in the second week of April. The farm has been set up by a Turkish firm M/s Zorlu Enerji. Besides, he said, there was vast scope of investment in other areas of energy sector. UK and Pakistan , he said have strong trade ties that are growing.

"UK is Pakistans most important trading partner within the EU because of trade volume and large Pakistani Diaspora living there," he added. UK is Pakistans 4th largest destination for exports. Pakistan exported goods to the UK worth US $1,030 million last year, while imports from UK valued at $769 million.

Pakistan , the minister said, had signed Free Trade Agreement (FTA) with China and is establishing China-specific industrial zones. He urged British investors to benefit from these special zones by setting up industry there and exporting their products duty-free to China . Raja Pervez Ashraf suggested that PBTIF and its counterpart body in Pakistan - Pakistan Britain Business Advisory Group should chalk out a joint plan for further strengthening bilateral trade relations.

British High Commissioner Robert Brinkley, speaking on the occasion, said: " UK would like to further strengthen its trade relations with Pakistan through increased interaction of businessmen and the government officials of the two countries.

Exchange of trade related information and business delegation between the two countries would provide an opportunity to identify areas of mutual interest." Chief Executive Officer AEDB Arif Alauddin hoped that PBTIF, through innovative thinking, dynamic and proactive approach would help improve bilateral commercial relationship. He further expected that British investment would lead to strong growth of different renewable energy sources including bio energy, geothermal energy, hydropower, wind and solar energy.

Copyright Business Recorder, 2009

LAHORE (April 01 2009): The closed Mangla hydel power generation units resumed production of 250 megawatt, much needed electricity after Indus River System Authority (Irsa) released 25,000 cusecs water from the Mangla Dam on Tuesday. Director General, Pakistan Electric Power Company (Pepco), Tahir Basharat Cheema told Business Recorder that load-shedding situation has improved with enhanced water releases from Tarbela and Mangla dams.

Since the hydel power stations are generating about 2000 to 2500 MW, the current shortfall in the supply and demand has come down to manageable 1500 MW, he added. Pepco had started six to eight-hour countrywide load shedding on 21st March after Tarbela Dam touched its dead level and water releases from Mangla Dam on river Jhelum were stopped which forced closing down of Mangla hydel power generating unit. Cheema said that addition of about 800 MW electricity to the national grid, load shedding hours would be reduced now, bringing great relief of the industrial, commercial and domestic consumers.

Copyright Business Recorder, 2009

ISLAMABAD , March 30: Prime Minister Syed Yousuf Raza Gilani on Monday said the economic policies were mainly aimed at providing investmentfriendly environment and protection to foreign investors.

Talking to a delegation of Pak-Britain Trade and Investment Forum (PBTIF), led by its chairman Sir Tom Harris, at the PM's House, the premier said Pakistan had become a destination of choice for foreign investments due to its geostrategic location, availability of skilled manpower, better infrastructure, provision of raw material and low manufacturing cost.

According to an official press release issued here, the leader of the delegation invited the prime minister to visit London to address the British Corporate Sector about his government's economic policies in an investment conference later in the year.

The prime minister while accepting the invitation informed the delegation that timeframe for his visit would soon be decided through bilateral diplomatic channels.

Mr Gilani said the United Kingdom was a key economic partner of Pakistan being the second largest investor and third largest trading partner.

He highlighted that Pakistan 's overall macroeconomic indicators, despite the global restrictions, remain sound.

The government attached highest priority to the energy and oil and gas exploration sectors in which lucrative returns were being offered to foreign investors.

The delegation informed the prime minister of the UK sector's interest in expanding the business economic ties with Pakistan.

The premier assured them that in coordination with the provincial governments, the ministry of finance and Board of Investment (BoI) would look into extending full support in facilitating their projects.

Enhanced level Meanwhile, President Asif Ali Zardari has called upon the UK investors to enhance level of their investments in Pakistan in different sectors.

Highlighting the investmentfriendly environment in the country, he said energy, mining, banking, IT and telecommunications, infrastructure development and agriculture sectors can be focussed by the foreign investors, including those from the UK.

He was talking to a delegation of Pakistan Britain Trade and Investment Forum headed by Sir Tom Harris, chairman PBTIF, which called on him here at the Aiwan-e-Sadr on Monday.

Other members of the delegation included Vince Harris of International Power, Zafar Iqbal Chaudhry of Clyde and Co, Rashid Iqbal of Media Integrated Learning Centre Education and Ikram Khan of Mediworld.

Lauding the efforts of PBTIF for invigorating new life and positive momentum into commercial and investment relations between Pakistan and UK despite challenging circumstances, President Zardari expressed his determination to enhance further the already existing trade ties between the two countries.

Bilateral trade has already seen an increase, he added.

Referring to the close trade and commercial ties between the two countries, the president said that UK was the biggest foreign investor in Pakistan and is the country's fifth largest export market.

He further said that new incentives had been given to improve the public private partnership (PPP) in the country.

Sir Tom Harris thanked the president for his encouragement to the initiatives of BPTIF and informed him about its future programme.

He said that PBTIF was playing a vital role in improving trade and investment between the UK and Pakistan and organising the visits of UK- based businessmen to Pakistan.

Minister for Investment Waqar Ahmad Khan, Minister for Privatisation Syed Naveed Qamar, Secretary General Salman Farooqi, Chairman BoI Salim H. Mandiwala, Foreign Secretary Salman Bashir, Secretary Investment Tariq Iqbal Puri, Secretary Commerce Salman Ghani and Pakistan 's High Commissioner to UK Wajid Shamsul Hassan were also present during the meeting.

Better climate While showing interest in expanding business, the PakistanBritain Trade and Investment Forum has asked Pakistan to remove technical impediments and improve supportive conditions like skilled work- force and better security to foster the long-term investment.

The forum delegation in a meeting on Monday informed the Prime Minister's Adviser on Finance, Shaukat Tarin that a significant number of British companies were interested to expand their project-based investment in Pakistan.

The delegation was led by Vice Chairman Standard Chartered Bank, UK , Tom Harris and representatives HSBC, Shell, Glaxo Smith Kline.

The objective of delegation's current visit to Pakistan is to seek expansion of trade relations and to explore opportunities for inward investment in the country.

Shaukat Tarin expressed the desire to expand exports from Pakistan to UK and said it would strengthen the bilateral relations. He said Pakistan would welcome investment in its integrated energy generation programme and export-oriented manufacturing sector.

The adviser briefed the delegation regarding various portfolios of domestic industries in food, textile, petroleum, pharmaceutical and other sectors where the country has the potential and competitive edge in the world export markets.

He briefed the visiting delegation on government's nine point economic reforms agenda of re-engineering its manufacturing and agriculture sector.

The businessmen delegation appreciated Pakistan 's efforts in the war on terror, consolidation of industrial portfolios, poverty alleviation, widening industry-based investments through FDI and establishment of Special Economic Zones.

Mr Tarin assured all out support to the future investors by expanding a comprehensive support system that tides over all bottlenecks, promotes tradecum-industry based investment in Pakistan.

Later, the delegation held a meeting with Syed Naveed Qamar Federal Minister for Privatisation, who gave an overview of the efforts to facilitate the investors to participate in the privatisation activity.

Naveed said the level-playing field was being provided to local and foreign investors for investment in all sectors. There were attractive incentives which allow 100 per cent foreign equity and remittance of capital, profits, royalty, technical and franchise fee and zerorated import of raw material for export manufacturing..

DAWN Reports

ISLAMABAD (March 28 2009): Hashoo Group of Companies, which is already engaged in oil and gas exploration and production in Pakistan through its companies namely Orient Petroleum International Inc (OPII) and Zaver Petroleum Corporation Limited (ZPCL), has launched Global Drilling Company Pvt Limited (GDCPL) for drilling industry in Pakistan.

GDCPL is focused on providing world class drilling services in Pakistan with a vision to enhance the drilling services and make it available to all Exploration and Production Companies so as to contribute its share in making Pakistan self-sufficient in hydrocarbon production and also to create an opportunity of employment and training for local people at the International Standards.

GDCPL is set to have a modest start with one 1500HP rig that is one of the most modern rigs in the market, equipped with the state of the art technology and most experienced management and technical staff capable of managing all affairs of the company. GDCPL will initially be providing services to OPII, ZPCL and other joint venture partners to catch up with the left over drilling plans due to paucity of rigs in the country in the recent past.

Global Drilling is likely to contribute its bit in accelerating the pace of exploration and production activities in the country that has slowed down due to non-availability of rigs for the E&P sector. The company also plans to progressively buy more rigs in the future ultimately to become leading drilling company of the country.

Global Drilling is scheduled to start drilling of its first exploratory well, Maharvi -1 in the district of Bahawalnagar, Punjab , for OPII towards the last week of March 2009. It is expected that the well will be drilled to a target depth of 7,300 feet. According to a press release, a new team of managers and technical staff with extensive international experience in drilling services has been engaged at internationally competitive salary packages.

The in-house expertise covers full spectrum of the drilling contractors activities including Operations, Quality Assurance, Safety, Health and Environment (QASHE), Engineering, Drilling, Procurement and Drilling Project Management. GDCPL has already obtained IADC Registration and has become a registered drilling contractor on the IADC member directory 2008 bearing registration No 172275.

GDCPL has a firm commitment plan to obtain the following certifications in the year 2009 with a vision to work abroad and compete in the international market on merit. The certifications include ISO 9001-2001 Quality Management System, ISO 18001-2007 Occupational Safety & Health Assessment System (OHSAS), ISO 14000-2001 Environment Management System and ISO 29001- Oil Field Related Health & Safety Management System. -PR.

Copyright Business Recorder, 2009

ISLAMABAD (March 27 2009): Ihor Pasko, Ambassador of Ukraine in Islamabad on Thursday called on Senator Waqar Ahmed Khan, Federal minister for Investment along with Dr G. Sarwar (CEO) and Ziauddin A. Khan (Project Manager) DGS Global. The Ambassador highlighted the Ukrainian business potential, as Ukraine is very much advance in technologies across the globe.

DGS Global introduced its expertise in all kind of mineral survey, and the technology they have in search of oil and gas, minerals, water reserves over 200,000 sq/km area in four month time, which will result in saving $2.7 billion. His Excellency also highlighted the fact that companies currently working in Pakistan normally take 4-5 years for the same job and cost $4 billion for 200,000 sq/km of area.

The Ambassador said that all state and private companies of Ukraine are interested in business opportunities in Pakistan . Senator Waqar welcomed their interest of investing in oil and mineral sector of Pakistan . He said that "our leadership is committed and understand the investment climate, both domestic and globally. We do look for such opportunities as Pakistan has the potential and have infrastructure. Such new ideas can lead us to conceive new projects in the country".-PR.

Copyright Business Recorder, 2009

ISLAMABAD: Pakistan is to seek oil facility from Saudi Arabia for 100,000 barrels per day on deferred payment of two year during the meeting of Friends of Pakistan due in Tokyo on April 16, said Advisor to Prime Minister on Finance Shaukat Tarin.

Tarin, who visited Saudi Arabia on March 7 and held vital meetings with authorities concerned dispelled the impression that the visit could not succeed saying that that Saudi Arabia has advised Pakistan to bring the issue of oil facility at the forum of Friends of Pakistan.

"The kingdom has indicated that Saudi Arabia would consider the demand seeking oil facility once it is placed in FoPs meeting," Tarin said. He said that during the meetings with Saudi authorities, Islamabad asked for increasing the import of Pakistani labour force so that Pakistan would have maximum remittances from Kingdom.

"We also invited Saudi Arabia to come forward and invest in Pakistan 's agriculture sector and import agriculture products from their own agriculture farms in Pakistan to ensure their food security."

Pakistan has also sought permission to export animals to cater to eating needs of Saudi Arabia.Regarding urea facility, he said that Saudi Arabia would maintain revolving fund to urea facility for Pakistan . "We also briefed governor central bank of Kingdom on securitisation of workers remittances."

When Pakistan got nuclear, it faced a lot of economic sanctions from USA and all donor countries, but it was Saudi Arabia , which helped Pakistan and extended the oil facility to wriggle the country out of morass. But when Pakistan started experiencing the fast deletion of the foreign reserves, Saudi Arabia refused to extend any oil facility to Pakistan asking Islamabad to first enter the IMF programme only then the Kingdom would consider about the oil facility.

But now Saudi Arabia asked Islamabad , even after getting IMF bailout package, to bring the demand particularly with regard to seeking oil facility in the meeting of Friends of Pakistan. However, Pakistan has managed to get oil facility from Iran to provide sustainability in foreign reserves.

"Although Pakistan has foreign reserves of over $10 billion mainly because of IMF programme, its sustainability can only be maintained if Pakistan manages more resources, which could ensure interest free inflows," some independent economic experts said.

"This can only be possible by alluring maximum foreign direct investment for which the business and investment friendly climate had to be introduced by the government, which will trigger economic growth in the country too. This would basically help sustain Pakistan 's reserves at a reasonable level," economists say.

Tarin, mentioning the preparation for projects to be marketed in the FoP meeting, said the details will be provided to the ambassadors of the FoP member countries on March 24 so that respective countries have ample time to identify the projects they intend to fund.

EDITORIAL (March 21 2009): The 12-nation Organisation of Petroleum Exporting Countries (Opec), which pumps 40 percent of world oil supplies, has been advocating the idea of fair price of oil in the international market for a long time.

At a recent energy conference in Geneva, Saudi Oil Minister Ali Ibrahim al-Nuaimi said that an "ideal" price for oil in the current environment would be between 60 and 75 dollars per barrel to allow minimum viable levels of investment in the industry and warned that a "pre-mature shift" towards renewable energy sources could jeopardise essential investment in oil and an economic recovery. Forty dollars per barrel were not enough and "todays low prices are just as unsustainable as soaring prices".

Diminishing investment in fossil fuels, according to the Minister, could impact their ability to provide the energy that will be needed when the economy turns around. The climate of uncertainty produces a strong sense of investment risk for producers. Talking about alternative sources of energy, Nuaimi stated that while the days of easy oil were over, the days of oil as a primary fuel source were far from over.

He argued that while an "inclusive mix" of fossil fuels and renewables was essential to meet future needs, many alternatives to oil and gas were still costly and unproven, and fossil fuels were expected to account for 80 percent of world energy needs for years to come. Earlier, in a regular meeting in Vienna , Opec had refrained from cutting output quotas and delayed such a decision till an extraordinary meeting to be held on May 28, 2009 to assess the market situation. This was touted as a measure which indicated Opecs desire not to worsen a vicious global recession.

The arguments for fair price of oil are not new or unexpected, especially at a time when the oil prices are down. These are voiced more loudly and consistently by the oil producers when faced with a bearish market and are usually forgotten in a rising market. The truth of the matter is that while such a reasoning would look to be quite convincing to an ordinary person, there is nothing like a fair price of a commodity in the actual world.

In the world market as well as in a free market economy, the prices of various commodities are determined primarily by the forces of supply and demand, all the players in the market including sellers and buyers aim at maximising their own profits and oil is no exception to this rule. As such, the idea of fair price in a certain range can only be interpreted as utopian or a kind of fairy tale. The anxiety of the oil producers about the current low level of prices is, however, understandable.

They were happy and largely unconcerned when the prices of oil were hitting almost dollar 150 per barrel but their foreign exchange earnings have gone down sharply since then, threatening their consumption and investment plans. The fact of the matter is that Opec itself is indulging in monopolistic practices by forming a cartel and regulating oil supplies in the international market. The main reason driving down the oil prices in the international market at present is the global recession which has reduced demand considerably. As soon as this phase is over, prices would again start climbing, possibly beyond the range specified by Nuaimi.

So far as Pakistan is concerned, its policy makers should not be lulled by such ideas but strive constantly to improve its current account position so that the country is able to bear the shock of rising oil prices if and when it comes. At the same time, efforts should be made to explore alternative sources of energy and gradually reduce its dependence on fossil fuels. Anybody could easily imagine the consequences for the country if the earlier trend of rising international oil prices had continued uninterruptedly. Unfortunately, there is hardly any compassion or fair play in the real world when self economic interest is involved.

Copyright Business Recorder, 2009

ISLAMABAD (March 26 2009): Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain on Wednesday said that Pakistan is vigorously pursuing TAPI (Turkmenistan-Afghanistan-Pakistan and India) gas pipeline and other gas import projects to meet the growing energy demand of the country. He expressed these views while talking to Sapar Berdiniyazo, Ambassador of Turkmenistan in Pakistan, who called on him at his office here.

Referring to economic and political significance of the TAPI gas pipeline project for the whole region, the advisor said that its early implementation would help strengthen and expand the economic and trade relations among the regional countries. The advisor said that upcoming steering committee meeting on TAPI project would produce positive outcome in the negotiations on the project.

He declared that this project would help promote political goodwill in the region. The ambassador said that beyond TAPI gas pipeline project, Turkmenistan desires to further deepen the bilateral relations in different fields.-PR.

Copyright Business Recorder, 2009

FAISALABAD (March 26 2009): Pakistan contributes little to greenhouse gas emission and global climate change. Its total energy-related carbon dioxide emission, measure about 100 million tons, out of which, 46 percent is from oil-related emissions, 45 percent from gas and 9 percent from coal, an Asian Development Bank Study report said.

On a per-capita basis, this is equal to 0.7 tons, compared with an average of 25 tons for the USA , Australia , and Canada ; 11 tons for European Union (EU) countries and 2.1 tons for developing countries on average, it added. Overall, the ADB report mentioned that the Pakistan has made little progress towards achieving energy conservation and energy efficiency (measured by the number of GDP units produced using energy) even when compared with other South Asian countries.

Energy efficiency and conservation cannot only reduce large financial outlays required to develop additional energy supplies in future, but can help minimise uneconomical excess standby capacity required to cater to peak loads, reduce subsidy and defer transmission system expansion needs, thereby saving public funds and increasing returns on energy infrastructure investments.

In recent years, the ADB report highlighted that Pakistans rising consumption of oil, its flat oil production (close to 65,000 bbl/day), primarily from Southern Indus Basin, has led to increased levels of oil imports. A country with limited refining capacity is heavily dependent on petroleum product imports. Pakistan consumes close to 370,000bbl/day of oil and various petroleum products, of which nearly 80percent, is imported.

Majority of the imports is from Middle East, with Saudi Arabia as the leading oil importing destination for Pakistan . Due to the large-scale fuel switching in the power and cement industry, displaced by natural gas and coal, respectively and with increased use of Compressed Natural Gas (CNG) in vehicles, oil consumption to an extent has levelled off temporarily.

According to the ADB report, Natural Gas presently accounts for the largest share of Pakistans energy use, amounting to about 50percent of total energy consumption. Pakistan currently consumes all the domestic natural gas it produces.

Over the period of past six years, natural gas consumption in the country has risen by an average annual rate of 10.4percent, liquefied petroleum gas (LPG) by 17.6 percent and coal by 22.8 percent. Despite a slight increase in production recently, Pakistan, with its growing level of consumption, will need to become an importer of natural gas in the next three to five years, provided no major discoveries are executed, it mentioned.

Consequently, Pakistan is currently exploring several pipeline options (Iran-Pakistan-India, Turkmenistan - Afghanistan - Pakistan - India) and the import of LNG from Qatar, to meet the expected growth in demand for natural gas, the study added.

Coal plays a minor role in countrys energy mix, although Pakistan sits on one of the largest coal reserves estimated at 185 billion tons in Thar in Southern Pakistan. Pakistans demand for electricity is also rising rapidly, close to 12 percent on the average.

Its installed capacity is about 20,000 megawatts (MW). Conventional thermal plants using oil, natural gas, and coal account for about 66 percent of this capacity, with hydroelectricity making up 32 percent and nuclear 2 percent, it revealed.

In 2006, electricity generation stood at 93.6 billion kilowatt-hours (kWh). However, the Government estimates that this will need to increase to 120 billion kWh by 2010 to meet the increase in demand. Further, Pakistan faces power shortages during peak seasons and peak hours of use, making it necessary to implement rotating blackouts (load-shedding), the ADB report said.

Additionally, many rural areas do not even have access to electricity, while half the population is not connected to the national grid. Technical and commercial losses caused by poor infrastructure and a significant amount of power theft represent 30 percent of the total generated electric power, ADB report disclosed.

Pakistan as an energy intensive, is a net importer of energy and also lags behind other countries in converting high-value primary energy (gas and oil) into useful energy services. It takes, for example, almost 5.0 times much primary energy to produce one unit of GDP than Bangladesh, 3.4 times than Nepal, and 2.3 times than Sri Lanka.

Compared with India, which is a coal-based economy and faces technical problem in efficient conversion of primary energy from coal into energy services, Pakistan remains 33 percent more inefficient in converting its primary energy sources into useful energy services, the ADB report concluded.

Copyright Business Recorder, 2009

ISLAMABAD (March 20 2009): Economic Co-ordination Committee (ECC) of the cabinet on Thursday agreed to grant seven years tax holiday to the refurbished oil refineries to be relocated to Balochistan subject to application of admissible regulations. Petroleum Ministry had recommended ten years concession and some other incentives for the refurbished refineries.

Official sources told Business Recorder that the Petroleum Ministry argued in the ECC meeting that the same incentives cannot be offered to the second hand refurbished relocated refineries as given to the brand new refineries because of cost difference. However, the case of Bosicor Refinery is different which will install diesel hydrotreater and isomerization plant to produce environmentally friendly low sulphur diesel as well as low benzene motor gasoline.

Petroleum Ministry, in its summary, a copy of which was made available to this newspaper, had proposed that old relocated refurbished refineries should be allowed to be set up in Pakistan in accordance with the policy guideline worked out by the committee under the chairmanship of the then Deputy Chairman, Planning Commission and subsequently by Planning Commission on December 22, 2008:

(ii) The Bosicor refinery or any other refurbished relocated refinery, if set up along the coastal belt of Balochistan should be given 10 years tax holiday incentives instead of 20 years tax holiday. Waiver of 5 percent WPPF subject to the condition that the entire proceeds will be exclusively spent for the benefit of the local labour and their welfare, through a Board of Trustees, to be specially established for this purpose to build confidence level.

(a) Waiver of Development Surcharge @ 0.5 percent of the value of exports under the EPZA Rules, 1981, if refinery is declared as EPZ.

(b) The government would not pay any freight on inland transportation of crude oil and petroleum products and the refinery project would have its own arrangements for crude import handling/Single Point Mooring etc to avoid back freighting of crude oil.

c) They would observe the terms and conditions of their licence issued by the independent regulator ie Ogra and other rules, laws and regulations etc. The sources said, incentives would be available to the projects if oil refinery will be commissioned at the end of 2011.

Presided over by the Prime Ministers Advisor on Finance Shaukat Tarin in the chair, ECC directed the Petroleum Ministry to get cabinet approval for Iran-Pakistan-India (IPI) gas pipeline as the gas price offered by Iran is irrational given the future expected fluctuations in the price of furnace oil.

The ECC directed provincial governments to take action against hoarders of food items as per law in order to provide relief to common man, adding that provinces must keep a persistent vigil on food items supply chains mechanism in the market to ensure availability of all consumer items at sales outlets. Relief to common man should be the primary focus of provincial governments at district level, it added.

ECC constituted a surveillance committee under Ministry of Food and Agriculture (Minfa) comprising representatives from relevant federal and provincial government organisations, local governments and concerned DCOs to look into the price control matters and submit actionable recommendations for ECC decisions.

ECC considered Ministry of Commerce summary seeking permission for bilateral trade with India through Wagah-Attari road link and approved the proposal in the light of a decision taken in an earlier meeting between the President of Pakistan and the Prime Minister of India at New York on 24 September 2008, advising the concerned to implement it in phased manner commensurate with parallel development of infrastructure on both sides of the border.

While reviewing Ministry of Communications summary proposing leasing of right of way (ROW) by National Highways Authority according to an approved leasing policy, ECC directed the Communication Division to revisit the draft leasing policy, and constituted a committee comprising Ministers for Information, Privatisation and representatives of Communication Division to technically/commercially examine the proposal and resubmit its recommendations to ECC for approval.

ECC deliberated on Ministry of Petroleums summary seeking extension in Uch Gas Field Development and Production Lease earlier granted to OGDCL for a period of 25 years, and approved Uch-II Expansion Project for commitment of gas supply for 25 years from the start-up date in relaxation of Rule - 32 of Pakistan Petroleum Exploration and Production Rules - 1986, advising the Petroleum and Natural Resources Division to seek Prime Ministers approval as per law.

The committee also authorised Federal Board of Revenue(FBR) to waive regulatory duty @ 20 percent on potato chips fries to be imported by International Franchise Food Chains (IFFC) operating in the country.

The ECC also allowed the Ministry of Water and Power to waive the coal-based power projects from the requirement of firm Energy Performance Cost (EPC) contract in the light of ECCs earlier decision of May 23, 2007.

ECC considered Ministry of Water and Power proposal for power transmission enhancement multi tranche facility project, based on an earlier signed GoP-ADB agreement of May 20, 2008, seeking financing for a power transmission enhancement investment program and approved ADB loans re-lending proposal to NTDC at an interest rate of 12.0 percent, including exchange risk coverage.

ECC allowed Ministry of Finance proposal for equity based investment abroad by resident Pakistanis comprising a request of M/s Educational Services Pvt Limited (ESL) of Beacon House School System to remit an amount of $17.5 million to its wholly-owned UK based subsidiary (ESL) titled New Silk Route UK and approved the proposal.

ECC approved Ministry of Food and Agriculture proposal seeking GoP collaboration with M/s Monsanto USA in Bt Cotton technology transfer along with an action plan mutually agreed by all stakeholders. It allowed Minfa to enter into agreement/MoU with M/s Monsanto of USA for implementation of a collaboration-based action plan that would lead to Bt. cotton technology transfer.

According to Minfa, the said technology transfer has been found successful in saving the cotton crop from bollworm losses and finally leads to increased cotton crop yield by economising on cost of production. ECC, however, constituted a steering committee under Minfa to look into the follow-up technical issues based on the action plan.

ECC reviewed implementation status of its earlier decisions made on 10th February, 2009 and expressed satisfaction over the decisions implemented, advising Ministries/Divisions to expedite implementation formalities on items reported as implementation in progress.

ECC reviewed Key Economic Indicators (KEI) and overall price situation in the country and noted that overall Consumer Price Index (CPI-based) inflation has registered a deceleration of 0.4% during July 2008-February 2009 over last month. ECC further noted that forex reserves as on 16 March 2009 stood at $10.2 billion that included impact of IMFs first tranche disbursement and other positive inflows. It noted that inflationary pressures are likely to ease in next few months owing to sharp decline in commodity prices particularly POL and Palm Oil.

ECC noted that overall workers remittances during July 2008-February 2009 amounted to $4918 million showing an increase of 19.2%. ECC was informed that FBR has collected Rs 702.5 billion during first eight months of CFY (July 2008-February 2009), posting an increase of 20.0 percent compared with same period of last year.

The committee was informed that as on March 8, 2009 domestic wheat stock stood at 1.051 million tones, showing higher stock of about 0.422 million tons compared with last year. The wheat procurement target from 2008-09 crop has been fixed as 6.55 million tons. The government has decided to import 2.5 million tons of wheat in phases this year to augment domestic wheat supplies. Out of 2.5 million tons, TCP so far has imported 2.039 million tons of wheat. The remaining quantity is in the pipeline.

ECC directed TCP to complete provision of required wheat stock to Sindh to meet any shortfall. It noted that existing sugar stock was reported to be around 2.553 million tons to supplement open market needs. ECC noted that 76 percent of planned quantity of urea (570,007 million tones) has arrived; whereas 24 percent is due to arrive at ports. Minfa briefed ECC that by the coming Kharif season it will have a surplus stock of urea after combining domestic production and foreign imports.

ECC expressed satisfaction over current account balance recording a surplus of $169 million in February 2009 which is a tremendous improvement upon the deficit in October 2008 prior to the release of the first tranche of the 7.6 billion dollars International Monetary Fund stand-by arrangement.

Copyright Business Recorder, 2009

KARACHI (March 22 2009): Looking at the global economic downturn and dim prospects of any sharp increase in oil prices, the new petroleum policy is positive for the exploration and production (E&P) companies operating in Pakistan, analysts said.

The Ministry of Petroleum and Natural Resources unveiled the new petroleum policy on Friday and according to the industry sources, the policy will apply to those licences granted after the implementation of this policy or in some cases licences that were given under the 2007 policy, Farhan Mahmood, an analyst at JS Global Capital said. It means that the wellhead pricing of existing producing fields will not be affected by this policy, he added.

He said that the gist of the new policy on the pricing side is that while the government has given higher wellhead gas pricing for E&P companies (14-20 percent over 2007 policy while 27-68 percent over 2001 policy), the price ceiling has been introduced at $100 per barrel both for local crude oil and gas well head pricing. However, this ceiling would be reviewed after every 5 years or as and when the price dynamics significantly changes in the international market.

Given the fact that crude oil prices are expected to range between $40-75 per barrel in next 4-5 years, the positive impact of the new policy will be visible in medium to long term. The major beneficiary of this policy will be OGDC, followed by PPL, as they are more aggressive in their exploratory activities.

Copyright Business Recorder, 2009

ISLAMABAD (March 22 2009): The Ministry of Petroleum and Natural Resources has invited expressions of interest (EoIs) for grant of petroleum exploration rights (exploration licences) for 53 blocks in the country. After the unveiling of Petroleum (Exploration and Production) Policy 2009, the ministry has invited all the interested companies to submit EoIs for grant of exploration rights.

The blocks are: 2769-16 (Mari East), 3066-5 (Bostan), 3068-6 (Killa Saifaullah), 2771-3 (Khangarh West), 2967-3 (Quetta South), 2764-3 (Palantak), 3170-6 (DI Khan), 2568-19 (Digri), 3272-16 (Lilla), 3072-7 (Okara), 2564-3 (Parkini Block B), 2569-3 (Sanghar South), 2866-3 (Khuzdar North), 2763-4 (Kharan West), 3372-23 (Hisal), 3371-13 (Peshawar), 3270-7 (Zindan) and 3371-15 (Dhoke Sultan).

Copyright Business Recorder, 2009

SEOUL (March 24 2009): A South Korean energy development firm has signed an agreement with the Pakistan government for a stake in a coal mine in the Thar desert region, the firm said on Monday. South Koreas Pan Energy Development Co (PEDCO), with UAEs Bin Din Group, had secured the stake in coal blocks in the area, which has about 2.56 billion tonnes of estimated reserves, about 40 times the amount of coal used each year by local generators in South Korea.

The Thar region, east of the Karachi, is reported to have the worlds largest coal reserves of about 100 billion tonnes or more. PEDCO said that the Pakistan government is requesting two coal power plants with 500,000 kilowatts capacity and the firm is closely in talks with state-power monopoly Korea Electric Power Corp (KEPCO) PEDCO expects coal production of 2 million tonnes by 2011 from the blocks, and 10 million tonnes from 2015.

Copyright Reuters, 2009

ISLAMABAD : Alternative Energy Development Board (AEDB) has decided to approach provincial governments for provision of wasteland for bio-diesel plantation. According to AEDB on Wednesday, the board of directors has decided to facilitate provision of land to private firms interested in bio-diesel projects. Several private sector organisations have shown interest in bio-diesel production and have sought land for plantations. Bio-diesel can be extracted from sunflower, canola, mustard, rape seed, soy-bean, pongame (sukh-chaien), castor seed and jatropha. It is estimated that the country can cut its import bill by Rs 80 billion if only 10 percent of the diesel consumed in the country (0.8 million tonnes) is switched to bio-diesel. APP
Daily Times.

ISLAMABAD : A separate policy for dormant fields, tight gas and un-conventional hydrocarbon reservoirs would be approved to boost the gas exploration and production in the country, a senior government official told Daily Times on Thursday.

Petroleum Exploration and Production Policy 2007 have failed to address the problems faced by the Pakistan Exploration and Production Companies Association (PPEPCA) and was not able to attract much needed foreign direct investment in this important sector.

Economic Coordination Committee (ECC) of the cabinet is expected to approve formally Petroleum Exploration and Production Policy 2009 to attract investment in this important sector.

This decision has been taken during ongoing consultation on Petroleum Exploration and Production Policy 2009 at a meeting of Ministry of Petroleum and Natural Resources and Planning Commission.

This meeting was part of the inter-ministerial consultation being done to finalise the policy as per decision taken at ECC meeting held in January 2009.

Special Committee of the ECC is headed by Adviser to Prime Minister on Petroleum and Natural Resources, Dr Asim.

The first right of refusal, which is a contractual right that gives its holder the option to enter a business transaction with the owner of something before the owner is entitled to enter into that transaction with a third party, was given to government of Pakistan for sale of natural gas within Pakistan.

Later, Terms Of Reference (TORs) approved by the said committee for its working were to review the efficiency of the Gas Price Gradient (GPG) in the Evaluation and gas price discount mechanism proposed in the proposed policy. This special committee is to review the modalities of implementation of local employment, training and social welfare obligation as per petroleum policy 2009 to make them more effective.

Special committee of the ECC noted operational problems about the GPG mechanism of the 2007 policy. The Special Committee also noted that these operational problems were earlier raised in 2006 by the exploration and production industry, PPEPCA as well as Ministry of Petroleum itself. Rather than ratifying these issues, the Petroleum Policy 2007 was approved with no change in the GPG mechanism.

In a separate meeting held at the office of Member Energy Planning Commission, it was concluded that the Ministry of Petroleum has duly replied the observations of the Planning Commission.

In another meeting on the subject it has been decided that Exploration and Production (E&P) Companies would encourage local employment through imparting training to the local youth and a handsome amount from the profits would be spent for social welfare of the benefit of the local population.

Daily Times

ISLAMABAD (March 19 2009): The Petroleum Ministry has pressed the Economic Co-ordination Committee (ECC) of the Cabinet to approve signing of Gas Sale and Purchase Agreement (GSPA) with Iran at 80 percent of crude after President Zardaris recent visit to Iran, a price that is 2 percent higher than what was last offered to Pakistan, sources said.

They said that Petroleum Ministry has moved a summary to ECC, which is scheduled to meet on Thursday, after Iran warned that it would be free to commit supplies reserved for Pakistan to its other buyers if no agreement was reached between the two countries during the current Iranian year ending on March 20, 2009.

Iran has also said that it might also raise the gas prices, further, by nearly 10 percent. The Petroleum Ministry has, therefore, recommended that Pakistan may enter into the GSPA with Iran at the price offered by Iran in the current scenario.

According to the summary moved to ECC, the Ministry has further recommended to purchase gas specifically for power generation that would be supplied to power generation units through the public sector gas utility companies under the administrative control of Petroleum Ministry. A separate tariff has been recommended for those industrial consumers who would use imported gas. Petroleum Ministry has been proposed to be the administrative ministry in this regard.

Petroleum Ministry had moved a summary to the Prime Minister stating above facts and urgency in the matter and Prime Minister has directed to place the matter before ECC. The project envisages import of one billion cubic feet daily (bcfd) of natural gas, which is nearly 25 percent of Pakistans current gas production.

The project will take at least 4 years to complete, and be able to generate 5,000 megawatts (mw) power. According to an analysis imported Iranian gas will result in annual saving of $1 billion over import of furnace oil, (at crude oil price of $50 per barrel).

Similarly, there will be an annual saving of $735 million if equivalent quantity of LNG is imported. The savings will increase in line with the hike in global crude oil price. The IPI Project shall have immense economic benefits for the people of Pakistan .

The most significant benefit to Pakistans economy will be to provide energy security through the guaranteed availability of clean fuel of high energy content, which is not only less expensive than alternative fuels, but is also environmentally friendly. In addition, it will generate employment and boost the economy.

Copyright Business Recorder, 2009

KARACHI (March 09 2009): OMV Aktieng-esellschaft, Central Europes leading oil and gas group, today announced along with its Joint Venture Partners, Pakistan Petroleum Ltd (PPL) and Eni Pakistan (M) Ltd (ENI), the start of the extended well test of Latif-1, which discovered the Latif gas field located about 100 km from Sukkur in 2007.

As part of the fast track development the gas of Latif-1 is routed via a 23-km long pipeline to Kadanwari gas plant owned by Kadanwari and Miano Joint Ventures and operated by OMV Pakistan. SSGCL as gas buyer is distributing this additional gas from Latif to the southern Sindh province.

The current testing gas rate from Latif-1 is estimated to be around 6 million standard cubic feet per day (MMSCFD), equivalent to 1000 barrels of oil equivalent per day (boe/d). Whereas in the fourth quarter of 2009 additional gas from the appraisal well Latif-2 drilled in the second quarter 2008 would be available.

Latif-2 has, during initial tests, produced at a promising rate of over 25 MMSCFD (4000 boe/d). After the testing phase a field development plan would be submitted to the Government of Pakistan for approval. Following Field Development Operations will increase Latif gas production from 2011 onwards.

The new Latif gas reserves are the result of the exploration efforts of OMV together with its JV partners in Pakistan , PPL and ENI, to enhance indigenous gas production in Pakistan . The stake of the three partners in Latif Exploration License is: OMV (33.4 per cent Operator), ENI (33.3 per cent) and PPL (33.3 per cent).-PR.

Copyright Business Recorder, 2009

ISLAMABAD (March 10 2009): Saudi Minister for Finance, Dr Ibrahim bin Abdul Aziz Al Assaf received Advisor to Prime Minister on Finance, Shaukat Tarin, at his office in Riyadh, according to a message received here on Monday.

During the meeting issues relating to Pakistan 's economic reforms and development, pace of economic stability in Pakistan and the role of the Saudi Development Fund in support of Pakistani developmental projects as well as trade and economic ties between the two countries were discussed at length.

Both the sides exchanged views on existing turmoil in international capital markets and discussed ways and means for strengthening the regional economies of South Asian States with special emphasis on Muslim countries. It was held that to obtain sizeable and cost effective financing within the economic co-operation framework of Muslim countries, global investors could be interacted for attracting investment in secured economic instruments. Matters relating to provision of crude oil from Saudi Arabia were also discussed. Shaukat Tarin, during his discussions with his Saudi counterpart covered various subjects including securitisation of workers' remittances, alleviation of poverty and enhancing volume of trade, especially export of agricultural products to Saudi Arabia .

Both the sides also discussed Kingdom's support for supply of oil, promotion of investment and enlisting Pakistani firms in construction of mega projects in the brotherly Muslim country.

Shaukat Tarin who is on a two day official visit to the Kingdom also met the head of the Islamic Development Bank (IDB), Dr Ahmed Ali in Jeddah, as part of his economic-boosting visit to the Kingdom. Adviser to Prime Minister on Finance and Chief of IDB also held mutually beneficial discussion for closer co-operation between the banking sectors of two brotherly countries.

It was agreed that financial institutions of the Muslim countries may harmonise their efforts to build stronger economies of Muslim States in South-West Asian Region. Shaukat Tarin's meeting with his Saudi counterpart in Riyadh was attended by the Governor of Saudi Arabia Monetary Agency (Sama) and Pakistan 's Acting Ambassador to Saudi Arabia.

Copyright Associated Press of Pakistan, 2009

ISLAMABAD (March 19 2009): Ministry of Petroleum and Natural Resources and Italian energy company, Eni S.p.A, on Wednesday singed a memorandum of understanding (MoU) to undertake joint oil and gas exploration venture. The Italian company will forge venture with Oil and Gas Development Company (OGDCL) and Pakistan Petroleum Limited (PPL) to explore oil and gas reserves in the country.

Petroleum and Natural Resources Secretary Mahmood Saleem Mahmood and Chief Executive Officer of Eni S.p.A Paolo Scraoni signed the MoU at Board of Investment (BoI) here and also exchanged the signed papers pertaining to the agreement. Later talking to media, Scraoni said that the company had an investment plan of 150 million dollars for the next year and its investment was currently amounting to 50 million dollars to 100 million dollars annually in Pakistan .

He said that the MOU was also intended to identify possible areas of future collaborations in term of joint technical studies, joint initiatives and to explore potential business opportunities in the oil and gas upstream, midstream and downstream sectors in Pakistan .

It include jointly explore opportunities for fast track development and use of technologically advanced applications in already discovered or in-production oil and gas fields operated by Pakistani State Oil Companies.

Review farm-in and farm-out opportunities in existing exploration licenses of the Pakistani State Oil Companies and Eni, ensure technology transfer through various means, including inter-company staff secondments, training events and technical and operating activities reviews. He said that Eni was an integrated energy company, which operated in 70 countries in the activities of finding, producing, transporting, transforming and marketing oil and gas.

He said that Eni wished to expand its business presence in the oil and gas sector in Pakistan and strengthen its position within Pakistan . Eni initially entered Pakistan in 2000 by acquisition of a small independent company, British Borneo, which had small, non-operated assets. In 2001, Eni acquired LASMO plc, holding company of LASMO Pakistan.

With this acquisition, he said, Eni became the largest foreign exploration and production company in Pakistan . Currently, Eni Pakistan holds interest in seven development leases and 14 exploration blocks, covering acreage of approximately 36,000 kilometres.

Advisor to the Prime Minister on Petroleum Dr Asim, Federal Minister for Investment Waqar Ahmed Khan, Minister of State for Investment and Chairman (BOI) Saleem H. Mandviwalla, Investment Secretary Tariq Puri and Additional Secretary of Petroleum Ministry GA. Sabri were also present during the ceremony. Earlier during the day, the Eni CEO Paolo Scaroni called on the Prime Minister Syed Yousuf Raza Gilani, said a statement.

The Prime Minister told the delegation that Pakistan offered enormous investment opportunities, particularly in the field of hydrocarbons, as there was a surge in demand in the energy and power sectors. Terming energy exploration as one of the most under-explored sectors in Pakistan, the Prime Minister said the demand was increasing rapidly and the government was encouraging investment to enhance production in this field.

He said the government was continuously monitoring the demand and supply situation of energy and would take every step to meet the demand of energy to maintain the momentum of growth and development. He said local as well as global companies were being encouraged to invest more in this sector and the response in this regard is encouraging.

Due to high demand in energy and power sector, the Prime Minister proposed that Eni Italy could also explore possibilities to invest in relevant sectors like power generation, petrochemicals, besides doing more exploration in the field of oil and gas.

The Prime Minister, while commending Eni Italy for its exploration activities, said that the government of Pakistan desired that Eni could also expand its activities in upstream sector. Paolo Scaroni said that Pakistans policies for investments, particularly in the field of hydrocarbon exploration, were very attractive and Eni Italy had planned to enhance investments in future. He evinced keen interest in investing in offshore oil exploration and energy sector.

Copyright Business Recorder, 2009

ISLAMABAD (March 08 2009): Petroleum Ministry has allowed imports of larger quantities of diesel, petrol and furnace oil during March and April due to lower output by local oil refineries. Sources told Business Recorder that this decision was taken in a meeting held recently in Petroleum Ministry, which was attended by all stakeholders.

The Ministry has allowed import of 300,000 tons diesel in March and 385,000 tons in April, while 600,000 tons furnace oil will be imported by PSO in March, and a similar quantity in April, to meet the requirements of power generation. Pakistan State Oil (PSO) and Shell Pakistan will import 25,000 tons petrol in March and another 25,000 tons in April.

Sources said that PSO has increased furnace oil supply to power sector from 20,000 tons to 32000 tons per day in an effort to enhance the power generation to overcome load shedding. The new management of PSO took the decision to increase the furnace oil supply to power sector to overcome the energy crisis that has hit different growth oriented sectors, including textiles.

Copyright Business Recorder, 2009

ISLAMABAD (March 06 2009): Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain urged the Canadian investors to invest in Pakistan's upstream petroleum sector as it carries tremendous opportunities. Canadian High Commissioner to Pakistan Rudolph Mank called on the advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain here on Thursday and discussed matters pertaining to promoting energy co-operation between the two countries.

While talking to the ambassador, the advisor said that government is taking steps to exploit the untapped on-shore and off-shore hydrocarbon resources to meet the growing energy needs. Highlighting the investment opportunities in Pakistan Dr Asim said that government has announced enormous incentives and packages in the New Petroleum Policy 2009 for foreign investors in oil and gas exploration and production.

The bidding process for issuance of exploration license to the aspirant companies has been cut short to attract foreign direct investment in Pakistan 's energy sector. The government is pursuing fast track exploration policies as we want to be self-sufficient in indigenous gas production in the coming three years, the advisor informed the envoy.

Canadian High Commissioner said Canada wanted to build long-term and multi-faceted strong relations with Pakistan . He emphasised the need for expanding co-operation between the two countries, particularly in the energy sector. They discussed ways and means to further expand the already existing strong bilateral trade relations of 800million dollar between the two countries.-PR.

Copyright Business Recorder, 2009

PESHAWAR (March 05 2009): A study on oil and gas potentials in Fata is in progress and a number of sites have been identified in Bannu, Tank and D. I. Khan regions under a Source Rock Mapping and Investigation Project, costing Rs 39.852 million. This was told to NWFP Governor Owais Ahmed Ghani during a presentation on the project at the Governor's House here on Wednesday.

The project is aimed to have a technical and professional approach for conducting systemic exploration in the Tribal areas. National Centre for Excellence in Geology, Peshawar University , is executing the project in collaboration with the Fata Development Authority (FDA) under an agreement signed in August 2008.

FDA Chief Executive Attaullah Khan, General Manager of Planning and Development Salim Khan, General Manager (Mineral) Yaqoob Khan and other concerned officials attended the presentation given by Principal Co-ordinator of the project Dr Fazal Rabbi Khan.

The meeting was informed that in the first year of the project, data collection and compilation would be carried out. Dr Khan said that fieldwork in Sherani area of FR D.I. Khan collected preliminary geological data relating to hydrocarbon and identified eight new hydrocarbon localities, besides noting the already reported oil reserves in the area.

Similarly fieldwork was completed in the Bhaina area of FR Tank for collecting initial geological data about hydrocarbon potential where gas seepage had been observed. The meeting was further informed that tribal students in the Department of Geology and National Centre of Excellence in Geology were involved in the project and were being trained on oil and gas exploration in the Fata. The presentation also highlighted the reported oil and gas seepage, oil shale and coaltar sand from the tribal areas.

In FR D. I. Khan, active oil seepage, oil shale and coaltar sands have been noted in Sphelai, Darazinda, Dumanda and Mughal Kot area. In FR Bannu, gas seepage has been noted in Spin Tangi area. In FR Tank, active gas seepage was found in Bhaina area in a drilled well. Carbonaceous shale has been reported from different localities in Khyber Agency.

Governor Owais Ahmed Ghani stressed the need for the preparation of an interim report on the prospect of oil and gas in the Fata. He said: "At the end of the study, we must have a consolidated and authentic document to be presented to the interested companies and investors for further exploration."

The Governor also desired to have a periodical review of the progress on the project, and said that bimonthly review should be carried. He also desired conducting of a complete and in-depth analysis of the hydrocarbon potential in the Fata, urging that the end result of the study must come forth in the shape of a compact and comprehensive report. The Governor also directed the officials to conduct a fresh survey and collect data about some previously identified sites in Khyber Agency and Darra Adam Khel area.

Copyright Business Recorder, 2009

ISLAMABAD (March 05 2009): The local production of Liquefied Petroleum Gas (LPG) has increased from 1,100 metric tonnes per day to 1500MT per day, during the last three years due to investment-friendly policies of the government and forward looking regulation approach by Oil and Gas Regulatory Authority (Ogra).

Under the de-regulated pricing policy, the Ogra has simplified LPG licensing procedures, which helped in strengthening the supply infrastructure and promoting an environment conducive for investment and competition.

Ogra's regulatory structure involves monitoring of the activities of the LPG marketing companies to ensure sufficient supplies all over the country, especially in remote localities and maintain uninterrupted supplies to domestic consumers. In corresponding fiscal year, 10 LPG producers and 72 marketing companies were operating in the country with more than 5,000 authorised distributors.

The total supply of LPG, which comes from oil refineries, gas producing fields and import, stood at 570,308 tonnes during the year 2007-08. The share of refineries, gas fields and imports was 186,487 tonnes, 362,159 tonnes and 21,662 tonnes respectively. However, according to official sources there is a shortfall of 3,000 tonnes to ensure the uninterrupted supply of LPG on prescribed rates.

Copyright Associated Press of Pakistan, 2009

ISLAMABAD (March 04 2009): The total production of oil refineries has witnessed a growth of 4.14 percent during the corresponding fiscal year 2007-08. The total production (energy and non-energy) by the refineries during the year amounted to 11.10 million tons as compared to previous year's 10.66 million tons, posting a growth of 4.14 percent, according to official sources.

All the refineries, except National Refinery Limited (NRL) registered increase in production during the period, while the production by Bosicor Refinery was significantly higher due to its increased production capacity resulting from revamping of crude distillation unit. Parco's annual growth for the year under review stood at 3735.8 tons against the previous year's 3586.2 tons, showing increase of 4.17 percent.

NRL could not perform well in 2007-08 as its production fell to 2585.1 tons from last year's 2664.5 tons, registering decrease by 2.98 percent. While, Attock Refinery Limited and Bosicor Pakistan Limited exhibited good performance by attaining 5.39 percent and 16.29 percent respectively.

Copyright Associated Press of Pakistan, 2009

ISLAMABAD (March 04 2009): The government is expected to provide money from Production Bonus Fund to District Co-ordination Officers (DCOs) for setting up the infrastructure of schools and hospitals in contract areas of oil and gas exploration activities. This will be the guideline that government will issue to invest money from Production Bonus Fund for welfare of people.

The Fund has already been approved by the Economic Co-ordination Committee (ECC) of the Cabinet in Petroleum Policy-2009. Sources told Business Recorder that the sub committee of the ECC will meet on Thursday under the chairmanship of Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain to finalise the programme. The petroleum advisor is expected to announce this decision in a press conference on Friday, sources added.

Pakistan Petroleum Exploration and Production Association (PPEPCA) has backed the said proposal. Both government and PPEPCA have agreed to invest the money from the Fund through DCOs for establishing schools and hospitals. Sources denied that the PPEPCA has rejected the profit on oil and gas share for wells announced by the government in the Petroleum Policy. The sub committee was formed to chalk out mechanism to invest in the Fund to provide relief to masses.

The government in the Petroleum Policy raised the production bonuses in contract areas of oil and gas explorations; from $500,000 to $600,000 within 90 days of start of commercial production, $1,000,000 to $1,200,000 upon reaching 60 Million Barrels of Oil Equivalents (MMBOE), $1,500,000 to $2,000,000 upon reaching 120 MMBOE, $3,000,000 to $5,000,000 upon reaching 160 MMBOE and $5,000,000 to $7,000,000 upon reaching 200 MMBOE. The production bonuses will be expended on social welfare projects in and around the respected contract areas. Earlier, oil and gas exploration companies have been spending the said bonus on the welfare projects and now wanted to invest it on the welfare projects of health and education, sources added.

Earlier, it was also considered to distribute cash from Production Bonus Fund to the people by involving parliamentarians in contract areas of exploration activities. But PPEPCA was of the view that the cash payment from the Fund would not be feasible, as it would be very difficult to pay cash to people living in contract areas of oil and gas exploration activities.

Sources said that distribution of cash had raised the fears of embezzlement. The oil and gas exploration companies also wanted health and education projects at their own names that would be feasible job to be remembered for the days to come.

The projects of health and education would facilitate the people and cause development in areas like NWFP and Balochistan. The association was also of the view that the idea of cash payment may be possible in the areas of less population but it appears impossible in the crowded populated areas.

Copyright Business Recorder, 2009

ISLAMABAD (March 02 2009): The gas shortage in the country during the next winter season would be reduced significantly, as 250 mcf per day additional gas would be added in the system from June this year.

Managing Director Sui Northern Gas Pipelines Limited (SNGPL) Abdul Rasheed Lon told a private TV channel that four more wells of Kohat field would be connected to the system by June 2009, and three wells of Kohat field were already producing significant amount of gas, he added. He said the gas shortage reached 600 million cubic feet (mcf) this year during the winter season. It is 33 percent of the total sales. Following the improvement in weather in Punjab the gas supplies of country's 98 percent industries have been restored, he informed.

The company was trying to reduce line losses, he said and added that a sum of Rs 1.5 billion has been allocated to reduce the losses up to 6 percent from the current level of 8 percent.

The company was also trying to minimise gas pilferage as the government has been asked to enact law to award severe punishments to discourage gas theft which is currently 50 percent of total losses, he informed. Currently there is no effective legal act under which gas pilferage complaint is registered and culprits punished accordingly, he added.

The company he said was facing cash flow problems as Wapda owes a sum of Rs 5.5 billion while various consumers owe Rs 2.5 billion to SNGPL. Due to price difference, the company's losses are likely to reach Rs 20 billion by July 2009, as the company has to pay international gas companies in dollars, which is persistently increasing. While Ogra has not increased the prices to required level to meet the expenses, he added.

Copyright Associated Press of Pakistan, 2009