Govt left red-faced over Russian oil assertions

State minister Musadik denies FM Bilawal’s claim; says country indeed pursuing ‘discounted’ oil from Moscow

ISLAMABAD:

A controversy has emerged over the import of Russian oil following contradicting statements of two ministers on the matter.

On Thursday, Foreign Minister Bilawal Bhutto-Zardari, while addressing a news conference in New York, had said that the country was not “pursuing or receiving” any discounted energy from Russia.

Contradicting his cabinet colleague, Minister of State for Petroleum Dr Musadik Malik on Friday, addressing a news conference in Islamabad, maintained that Pakistan was indeed pursuing Russian oil at discounted rates.

“Russia would export petrol and diesel to Pakistan at the maximum possible discounted prices,” he added.

When asked about the foreign minister’s statement on the Russian energy, Malik said he could not listen to the news conference of Bilawal. However, he hurriedly added that Bilawal had merely said that Pakistan was not receiving energy from Russia.

“We lacked something that we should have given in detail to the Foreign Office,“ Malik said, adding that his ministry would clarify all misperceptions in this connection.

The state minister further said that the Pakistani ambassador in Moscow was also part of the negotiations with Russia on oil import. “This is a technical confusion, which we will address,” he informed the media.

Malik claimed that the visit to Russia had been “very positive” in connection with crude oil imports from that country. “There are eight types of crude oils in Russia, two of which can be refined in Pakistan,” he said.

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He added that the Pakistan Refinery Limited (PRL) and Pak-Arab Refinery Company Limited (Parco) had expressed their willingness to refine the Russian crude oil.

He further said Pakistan would import Russian oil at discounted rates and that would reduce the cost of energy in the country. “Lower energy prices will reduce the cost of production, transportation and storage of everything, which will also bring down commodity prices,” he maintained.

A delegation of an inter-governmental commission headed by the Russian energy minister will visit Pakistan in the second week of January to finalise matters related to the import of crude oil, diesel and petrol. “The supply of oil from Russia will start early next year,” Malik said.

The state minister said Azerbaijan was believed to be providing cheaper liquefied natural gas (LNG) and talks were also under way with the UAE for diesel and petrol.

He added that Pakistan would import 1.3 billion cubic feet of gas per day through the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

Malik claimed that the government was focusing on the development and prosperity of the country to provide relief to the people and added that the government was trying to buy cheap oil and gas, which was the dream of Prime Minister Shehbaz Sharif to provide facilities to the poor.

He further informed the media that the situation of gas supply in October and November was better than last year. “More gas is being supplied in December than last year,” he claimed.

“More gas will be available in January as well, he said, adding that its production was decreasing at the rate of 10% per year.

He said an additional cargo had been arranged from Qatar to minimise the gas crisis. Apart from this, the Sui Northern Gas Pipelines Limited (SNGPL) has arranged for the supply of liquefied petroleum gas (LPG) to consumers.

As many as 20,000 tonnes of LPG is being procured, and a framework agreement with Azerbaijan in this connection is expected to be signed soon.

There is a possibility of a government-level agreement with Azerbaijan's major company Socar Polymer, which will provide cheaper LNG.

The state minister said a cell had been established in the Petroleum Division to review the implementation of energy projects.

He added that Pakistan had also discussed the issue of acquiring crude oil from Kazakhstan through a pipeline.

He also ruled out differences in the coalition government over the Reko Diq project.

Last week, Malik had announced that Russia had decided to provide crude oil, petrol, and diesel to Pakistan at discounted rates.

He had said that detailed terms and conditions of the discounted oil commodities would be settled during the upcoming visit of the Russian energy minister to Islamabad by mid-January, but rates would be similar to the discount being given to other countries or even cheaper.

However, in an interview with journalists Amna Nawaz and Judy Woodruff on ‘PBS Newshour’ on Dec 14, Foreign Minister Bilawal said: “As far as Russia is concerned, we aren’t pursuing or receiving any discounted energy, but we are facing an extremely difficult economic situation, inflation, pump prices.”

He admitted that Pakistan was facing energy insecurity. “We are exploring various avenues to expand our areas where we can get our energy from,” Bilawal said, adding that “any energy from Russia will take a long time for us to develop.”

Responding to a question about the foreign minister’s statement in his presser today, Malik said that it was correct Pakistan was not currently buying any oil from Russia.

However, he said that since it was the Petroleum Division’s responsibility to hold meetings with the refineries and understand the blending process, it would share the details with the foreign ministry to “clear confusion”. For this, a list of refineries and the names of the types of crude oil would be sent to the foreign ministry.

“Perhaps, we need to work harder to take foreign ministry on board. We will send the details that I have put in front of you to the foreign ministry so no ambiguity remains.”

Malik asserted that his ministry was ready to “clear any confusion” and had only continued talks with Russia after confirming with refineries that they would be able to use the imported crude oil.