$15 billion Saudi bailout likely

[Nishan_101]

$15 billion Saudi bailout likely

SLAMABAD, May 22: With an ‘amiable’ government in place, Saudi Arabia is expected to extend a bailout package of about $15 billion to Pakistan’s highly indebted energy sector by supplying crude and furnace oil on deferred payment to enable it to resolve the chronic circular debt issue.

A senior government official said the Saudis had been taking reasonable interest in helping out the incoming PML-N government led by Nawaz Sharif.

They had extended a similar special package to Pakistan soon after it went nuclear in 1998 and faced international economic sanctions.

Between 1998 and 2002, Pakistan received $3.5 billion (Rs190 billion at the exchange rate at that time) worth of oil from Saudi Arabia on deferred payment, a major part of which was converted into grant.

According to the official, as soon as the PML-N emerged as the majority party after the May 11 elections, the Saudi ambassador in Islamabad sought a briefing on the country’s oil requirements from the foreign ministry before calling on prime minister-designate Nawaz Sharif in Raiwind, Lahore.

He was immediately provided a position paper, the official said.

Pakistan expects about 100,000 barrels of crude oil and about 15,000 tons of furnace oil per day from Saudi Arabia on deferred payment for three years. The amount involved works out at about $12-15bn.

The facility can be utilised to reduce loadshedding in the short term and provide an opportunity in the medium term to restructure the power sector by minimising subsidies, eliminating circular debt, ensuring recovery from the public sector and reducing system losses to bring it to a self-sustainable level.

“During the package period, the PML-N government can resolve the electricity crisis and develop hydropower projects through a combination of public and private investments and bagasse-based power production by the sugar industry,” he said.

He said the arrangement for oil supplies on deferred payments could be further discussed during Mr Sharif’s first visit to Saudi Arabia soon after assuming the office of prime minister early next month.

Pakistan’s total crude oil import is about 400,000 barrels per day and 30,000 tons of furnace oil. Its total oil import bill stands at about $15bn per annum.

The official said a request for 100,000 barrels of oil and 15,000 tons per day of furnace oil had already been passed on through the Pakistan-Saudi Arabia Joint Ministerial Commission.

A meeting of the commission could be convened soon after the new government assumed charge, an official said.

The Saudi rulers had not taken any interest in the issue earlier ostensibly because of the chill in their relationship with the PPP government.

Large political delegations taken to Saudi Arabia by the PPP government were cold-shouldered, an official said, adding that warming up of diplomatic relations with Iran and the UAE and cancellation of hunting facilities for Saudi royals had also annoyed the kingdom.

The official said the breathing space provided by the likely Saudi package could also be used for renegotiating gas price with Iran for the Iran-Pakistan gas pipeline to bring it down to a sustainable level.

Under the gas sales and purchase price agreement, any party may seek revision of the rates in view of the cost of alternative import options one year ahead of the first gas flows scheduled to take place in December 2014.

The official ruled out any possibility that the Saudi oil package could be used to persuade Pakistan to stay away from the Iranian gas import. He said the project had reached an advanced stage and involved international agreements and, therefore, backtracking was no option, but the development could give leverage to Pakistan to secure lower gas prices.


$15 billion Saudi bailout likely - Dawn.COM News



You are very welcome

The Best choice is the De-Nationalize the thermal power plants to 50% and let the Saudi's take over them and I am sure they will going to enhance their efficiency as well as we can be able to produce the installed capacity of 22000MWs which will be more than what we need.

Also Pakistan should take some serious action by implementing a ban on CNG for all the vehicles so that gas will be available for house hold, industries and power plants.

Pakistani Govt. should also look into combining all the Oil and gas corporations which are of Public sector and making a single one like Pakistan Drilling and Mining company or similar role one which will not be Exploring, Extracting and refining Oil and Gas but also Minerals like: Coal, Metals and other raw materials. This Corporation after its formation can work with international and local private firms on many projects....

INSHA ALLAH

 

[BLACKEAGLE]

That's ridiculous to be honest with you, how could Nawas win just because KSA wanted him to? Then where are the people, the ISI, media, army, judicial system? I understand that KSA does interfere in Pakistani business but to the degree it makes someone makes it into Prime Ministry? That's unbelievable. Even believing it is degrading to Pakistanies.

 

[Die Hard]

Saudi don't ask you to kill your own people and betray Muslims in Afghanistan you are slaves of USA you sell Muslims to USA you kill them on their orders you betray Muslims of Afghanistan and Many USA aid is in loan form and most things from Saudi Arabia you almost get them for free

Talibanization of Pakistan, Is this what we got free from KSA ?

 

[somebozo]

... and you're going to spend all your life savings to provide 24 hour electricity to your village without any load shedding?

I would rather put the country mind and resources to work and create wealth.
We have plenty of resources to takle the crisis inhouse in a matter of few years without aid but we are addicted to begging.

Think of arid desserts of Baluchistan, some 15 different tree species which can be grown fast in arid dessert, sewage water = raw material for renewable energy.

That's ridiculous to be honest with you, how could Nawas win just because KSA wanted him to? Then where are the people, the ISI, media, army, judicial system? I understand that KSA does interfere in Pakistani business but to the degree it makes someone makes it into Prime Ministry? That's unbelievable. Even believing it is degrading to Pakistanies.

For the first time you are speaking something sensible...I give you 21 gun salute for this!

 

[somebozo]

The Best choice is the De-Nationalize the thermal power plants to 50% and let the Saudi's take over them and I am sure they will going to enhance their efficiency as well as we can be able to produce the installed capacity of 22000MWs which will be more than what we need.

Also Pakistan should take some serious action by implementing a ban on CNG for all the vehicles so that gas will be available for house hold, industries and power plants.

Pakistani Govt. should also look into combining all the Oil and gas corporations which are of Public sector and making a single one like Pakistan Drilling and Mining company or similar role one which will not be Exploring, Extracting and refining Oil and Gas but also Minerals like: Coal, Metals and other raw materials. This Corporation after its formation can work with international and local private firms on many projects....

INSHA ALLAH

Last time Saudi's invested in Pakistan energy and steel sector, our favorite CJ overturned all the deals.
Think of investors not as money growing tree's. It takes a lot of ground work to build investor confidence.

 

[Kompromat]

So who is paying it back, or rather 'how' are we paying it back,because the 'Ameer ul momineen' will do what he's always done....go back to his dad's in Riyadh.

 

[Farooq]

This bailout can be a double-edged sword. If NS cancels the Iran -Pak pipeline deal due to KSA's influence then Pakistan is doomed and will forever become a puppet of the Najdi despots in KSA.

However, if this package is for purely business interests where the beneficiary is also Pakistan and there is no compromise in Pakistan's foreign policy then I don't see a problem with this deal.

 

[BATMAN]

So who is paying it back, or rather 'how' are we paying it back,because the 'Ameer ul momineen' will do what he's always done....go back to his dad's in Riyadh.

We'll pay it once we receive it.. do not get so mad at the news.

The said amount is much less than what our spiritual father Asif ALi Zardari siphoned in 5 years.

Not to the mention the shameless characters.. who made corruption even in hajj money and are still roaming freely.

 

[SEAL]

So who is paying it back, or rather 'how' are we paying it back,because the 'Ameer ul momineen' will do what he's always done....go back to his dad's in Riyadh.

Its not a loan or cash financing because most probably Saudi's will give us oil on deferred payments. Even if they offer us small amount of loan it will be much better option than IMF. I am sorry to say but PTI looserz can't see beyond their nose and after defeat they even lost sight to see other or neutral side of picture.

 

[Kompromat]

@SEAL

Bashing PTIana wont help your cause. What you must answer is on what terms is your prime minister getting us more and more indebted and what does he promise back.

 

[Kompromat]

@SEAL

Explain the 'neutral side of the picture'.

 

[SEAL]

@SEAL

Bashing PTIana wont help your cause. What you must answer is on what terms is your prime minister getting us more and more indebted and what does he promise back.

Bashing PML-N won't make Imran Khan Niazi PM either.
You have no idea about intensity of heat in this summer. If Saudi's are offering you supply of furnace oil on deferred payment i don't see any string attached to this deal as they did after 1998 Nuclear blasts. PML-N have to provide relief to the people of Pakistan and if friendly countries are willing to help they are most welcome.

For better understanding on this subject you better watch Bolta Pakistan-23-5-2013
Bolta Pakistan (Nawaz Sharif Hukomaat Ko Pheli Saudi Salami....) - 23rd May 2013 | Tune.pk

 

[Luffy 500]

$$ 15 Bn is a staggering amount of money. PAK should ask for saudi investments in the infrastructure sector like Railway and build joint power plants.Which will be Win-win for both.

 

[SQ8]

You're being to overly dramatic and over thinking things.

Pakistan needs help with it's economy, it has little choice but to accept whatever help it can get. Don't add a third angle to this, when the third angle here doesn't exist. Saudi Arabia needs a reliable partner to help with it's internal security and keep regional players in check, and Pakistan needs economic help. Remember, it's not just Iran that Saudi Arabia was concerned about, but the UAE as well, which is an Arab federation. It only makes sense for the two sides to offer what they have, in exchange for the other's services. It's good old bartering system, can't go wrong with that..

Am I?

I have no doubt that we need help with our economy.... but at what cost?
Further sectarianism? Continuation of policies where we play "favorite pet" to the KSA?
Further destabilization of our internal dynamics through proxy wars fought between the Saudis and Iranians in Balochistan and elsewhere?

What is more important at this stage?
Financial recovery(at the price of increased destabilization by either Iranians or Saudi Arabians or both).. or the stability of the social fabric.. ?
And at this stage the idea of borrowing from the Americans is much more attractive than borrowing from the Saudis(they just decided they want to deport more Pakistanis, and want us to give a cold shoulder to Iran...which is our neighbor) .
Yes they have been our "brothers"(some of them truly have been.. the royals).. Yes they have given us Assistance(Madressas)..
Yes they supported us during our nuclear boycott(until we realized that it was all to get them to boast to the Iranians that they have a bomb).

It depends on the preference, on experience and on impact. Our policies with radicalization, with sectarianism will only increase during these tenures because we WILL be obliged to come to terms with the Saudis.. and unlike the US...we cant "get rid" of them because they control the holy mosques.

Yes, objectively it would seem like a good opportunity.. $15 billion we could use that is like adrenaline for our economy.. moreover it also implies improved relations with the Saudis.. But as a cost benefit thing.. across the spectrum and not just economics..
Is it worth it?

 

[Bratva]

@SEAL

Explain the 'neutral side of the picture'.

Please come to Pakistan in this summer and bear the brunt of 12-15 hours of loadshedding daily with temp soaring to 48 degrees, then if you feel this 15 billion dollar deal is unworthy, we will accept your hue and cry. It is easy to criticize while sitting in a country where you have uninterrupted power supply and summers spent their is a joy