third eye
ELITE MEMBER
- Joined
- Aug 24, 2008
- Messages
- 18,519
- Reaction score
- 13
- Country
- Location
Indus Refinery project in jeopardy as Chinese pull out | Pakistan | News | Newspaper | Daily | English | Online
KARACHI (Reuters) - Chinese investors are the latest to pull out of long running Karachi refinery project intended to cut Pakistans costly reliance on fuel imports, the plants chairman told Reuters, a further sign of instability scaring off foreign money.
The Indus Refinery, which was to have a capacity of 93,000 barrels a day, was planned to be built near Port Qasim in Karachi, but work on it has stopped as the company has run out of cash, Mohammad Sohail Shamsi, the chairman of the company, said in an interview on Thursday.
Indus Refinery Ltds attempts to woo Chinese investors into the project have also failed, he said, after US and British investors abandoned it following the 2007 assassination of former Prime Minister Benazir Bhutto.Pakistan imports almost 9 million tonnes of furnace oil alone each year because of the lack of domestic refining capability.
The imports of furnace oil, diesel etc. have sky-rocketed, said Shamsi. Still nobody is willing to put up a new refinery.
Pakistans existing five major refineries produced 7.77 million metric tonnes of oil products during the 2010/11 financial year (July-June), down from 8.11 million in the previous year, according to industry data.
Domestic demand for the year was 19.6 million metric tonnes, and the shortfall was covered by imports.
Pakistan is already struggling to control a rising Taliban militant insurgency which, along with rising corruption and chronic power shortages, has put off long-term investors, and very few new projects are being started, analysts say.
This means that the chances of a recovery in the fragile economy, kept afloat thanks to an $11 billion International Monetary Fund (IMF) bailout programme, remain dim.
The refinery was originally scheduled to start production in December 2007, but the project was delayed until October 2010 because of the lack of investors.Since then, talks with several investors have failed.
Whoever you talk to, you have a meeting, you try to finalise anything and then the bombs go off. And the next thing you hear from them is that we are not too sure about investment in Pakistan at the moment, Shamsi said.
The company initiated talks with Chinese investors last year, raising hopes that the project would finally be completed, but these efforts have also failed.
We spoke to the Chinese and two weeks back they also said they are on a wait-and-see basis, he said.
Direct foreign direct investment in Pakistan fell 29.7 percent in the July-May period to $1.392 billion from $1.981 billion in the same period last year, according to data from the State Bank of Pakistan.
Shamsi said his company has already invested about $200 million in the project, and required $400-$425 million more, for which it was struggling to find investors. This is what we are going through for the past three years. I dont know when this country is going to get better and when people will be interested for investment into this country.
Indus Refinery has the plant and equipment of what used to be PetroCanadas Oakville refinery, which was closed and later sold, Shamsi said.
He added that about 60 percent of the equipment for the refinery was already in place, while the remainder was still in Canada.
KARACHI (Reuters) - Chinese investors are the latest to pull out of long running Karachi refinery project intended to cut Pakistans costly reliance on fuel imports, the plants chairman told Reuters, a further sign of instability scaring off foreign money.
The Indus Refinery, which was to have a capacity of 93,000 barrels a day, was planned to be built near Port Qasim in Karachi, but work on it has stopped as the company has run out of cash, Mohammad Sohail Shamsi, the chairman of the company, said in an interview on Thursday.
Indus Refinery Ltds attempts to woo Chinese investors into the project have also failed, he said, after US and British investors abandoned it following the 2007 assassination of former Prime Minister Benazir Bhutto.Pakistan imports almost 9 million tonnes of furnace oil alone each year because of the lack of domestic refining capability.
The imports of furnace oil, diesel etc. have sky-rocketed, said Shamsi. Still nobody is willing to put up a new refinery.
Pakistans existing five major refineries produced 7.77 million metric tonnes of oil products during the 2010/11 financial year (July-June), down from 8.11 million in the previous year, according to industry data.
Domestic demand for the year was 19.6 million metric tonnes, and the shortfall was covered by imports.
Pakistan is already struggling to control a rising Taliban militant insurgency which, along with rising corruption and chronic power shortages, has put off long-term investors, and very few new projects are being started, analysts say.
This means that the chances of a recovery in the fragile economy, kept afloat thanks to an $11 billion International Monetary Fund (IMF) bailout programme, remain dim.
The refinery was originally scheduled to start production in December 2007, but the project was delayed until October 2010 because of the lack of investors.Since then, talks with several investors have failed.
Whoever you talk to, you have a meeting, you try to finalise anything and then the bombs go off. And the next thing you hear from them is that we are not too sure about investment in Pakistan at the moment, Shamsi said.
The company initiated talks with Chinese investors last year, raising hopes that the project would finally be completed, but these efforts have also failed.
We spoke to the Chinese and two weeks back they also said they are on a wait-and-see basis, he said.
Direct foreign direct investment in Pakistan fell 29.7 percent in the July-May period to $1.392 billion from $1.981 billion in the same period last year, according to data from the State Bank of Pakistan.
Shamsi said his company has already invested about $200 million in the project, and required $400-$425 million more, for which it was struggling to find investors. This is what we are going through for the past three years. I dont know when this country is going to get better and when people will be interested for investment into this country.
Indus Refinery has the plant and equipment of what used to be PetroCanadas Oakville refinery, which was closed and later sold, Shamsi said.
He added that about 60 percent of the equipment for the refinery was already in place, while the remainder was still in Canada.
