February 21, 2013

Iran Plans to Build Oil Refinery in Pakistan

TEHRAN, Iran February 21, 2013

An Iranian semi-official news agency says Iran is planning to build an oil refinery in Pakistan.

The plan is part of Iran's effort to decrease international pressure on its oil industry, which has been target of international sanctions over the country's disputed nuclear program.

Thursday's report by Fars quotes Asim Hussain, an adviser to the Pakistani prime minister, as saying that the refinery in the Pakistani port of Gwadar will be able to refine 400,000 barrels a day.

The report says Iran will sell products from the refinery to Pakistan in return of food, especially wheat, meat and rice.

The deal to build the refinery came after a meeting between Iran's oil minister Rostam Ghasemi and the Pakistani adviser

US urges Pakistan not to sign deal with Iran

February 22, 2013 - Updated 020 PKT 
From Web Edition

WASHINGTON: The United States warned Pakistan against entering 'deals with Iran that may be sanctionable, a reference to Pak-Iran gas deal.
State Department spokeswoman Victoria Nuland said during a media briefing that Pakistan had better not sign agreement with Tehran. However, she said Washington wanted to help Pakistan overcome its energy crisis.
The spokeswoman also commented on Quetta's Saturday bombing that led to killing of over 89 people saying innocent people were being killed in bomb blasts in Pakistan.
She said that John Kerry had talked to Pakistani leadership over action against terrorists. Nuland said that Washington wanted to expedite campaign against terrorism in collaboration with Islamabad.

Cash-Strapped Army Still Plans on Helping Pakistan Fight Narcotics
U.S. and Pakistani soldiers greet each other on the Afghanistan border, January 2013. Next up: collaborating on stopping Pakistan's flow of drugs. Photo: U.S. Army

The war on terrorism isn't the only endless war the U.S. is waging. The drug war never went away, it just went overseas — and the U.S. military is lending new support to an effort to stem narcotics in Pakistan.

A series of new solicitations by the Army Corps of Engineers show that even in these cash-strapped times, the U.S. is willing to build new structures, including in major airports, for its Pakistani frenemies to sniff out drug smugglers.

At the southern Pakistani city of Karachi, the Army expects to build a 7,000-square-foot command center right inside Jinnah International Airport. Complete with a "cell/interrogation building," the new center will help provide "quick-response to constantly evolving narcotics and contraband smuggling tactics." Among the chief beneficiaries: Pakistan's "Rummaging and Patrolling Section," which apparently exists. Cost: up to $2 million.

Then there's another 28,300-square-foot command center the Army wants to construct in Islamabad. This one will be operated by Pakistan's DEA-mentored "elite, vetted" Anti-Narcotic Force Special Investigative Cell. At the command center, the Cell will "carry out liaison with international counterparts, compile sensitive drug related intelligence, conduct sophisticated investigations, and plan interdiction operations." Cost: up to $5 million.

Pakistan is a hub for drug trafficking — not just the narcotics coming in through the opiate breadbasket next door in Afghanistan, but precursor chemicals like acetic anhydride, ephedrine and pseudoephedrine. The U.S. interest in assisting Pakistan hunt narcotics dealers is less clear, particularly as the military lights its hair on fire warning about the disastrous impact of automatic spending cuts looming on March 1. To scare Congress into reversing the cuts, the Army this week released a state-by-state breakdown of what a loss of $18 billion this year from its operations account would look like.

Yet counternarcotics is one of the most lucrative sources of government contracting, and one that ties the war on drugs into the war on terrorism. A Pentagon bureau known as the Counter Narco-Terrorism Program Office is staffing up in Kabul to run Afghanistan's drug war. And in 2011, it disbursed a pot of money worth more than $3 billion for security contractors everywhere from Mexico to Azerbaijan, making it one of the most lucrative security-contracting agencies in the entire U.S. government. It'll be a long time before the U.S. military gets out of the south-Asian anti-drug game, whatever the budget situation might be.

Pakistan State Oil 'on its knees', more blackouts threatened

Pakistan State Oil.—File Photo

ISLAMABAD: Pakistan State Oil may default on payments due this month unless state-run companies at least partially pay for their oil, a spokeswoman said on Thursday, putting energy supply at risk and threatening increased blackouts ahead of key elections.

The country's largest energy company said last week it would be dramatically cutting back on the amount of oil companies can buy on credit, an action that would worsen already daily power cuts.

The power shortages have sparked violent protests and crippled key industries, costing hundreds of thousands of jobs in a country already beset by high unemployment, poverty and a local Taliban insurgency.

Pakistan State Oil is owed $1.5 billion, mostly by the government electricity companies but also by the state airline and railways. It owes suppliers $1.23 billion.

Around two-thirds of Pakistan's energy is generated by oil and gas. There are also widespread gas shortages.

PSO said it had received payments of $200 million this month but needed another $250 million within a week to pay its creditors.

"We have a liquidity crisis and we need funds urgently to keep the wheels going. In case – god forbid – we can't pay the banks or our suppliers, it will be a problem for Pakistan," spokeswoman Mariam Shah told Reuters.

"We supply the airlines, we supply the defence forces, the government. If they start paying us on time, this kind of crisis would never ever emerge."

The power cuts typically become far worse in the sweltering summer months when fans and air conditioners are turned on full.

Elections are expected to be held in late spring and the dismal performance of the state-run power sector has been a repeated complaint from voters.

The cuts are the result of government-imposed rules that mean electricity companies must sell power below the cost it takes to generate it. The cash-strapped government is supposed to compensate the companies for the money they lose but only makes late and partial payments.

The problem is exacerbated by wealthy or influential consumers, including most government agencies, who refuse to pay huge utility bills for their homes and factories.  The power companies then cannot pay suppliers like Pakistan State Oil for the fuel they use.

"This lack of payment has brought the nation's largest and most profitable public company to its knees and may consequently lead to a breakdown in the oil supply chain which will result in increased blackouts and load-shedding across the country," the company said in a statement last week.

The Ministry of Petroleum and Natural Resources had appealed to the government to release extra funds, said spokesman Irfan Qazi.

"We have asked the Finance Ministry to release some of the amount to PSO so they could be saved from default," he said. "The Finance Ministry has been releasing funds piecemeal."

Pakistan forex reserves fall to $13.058 billion

—File Photo

KARACHI: Pakistan's foreign exchange reserves dropped to $13.058 billion in the week ending Feb 15, from $13.395 billion in the previous week, the central bank said on Thursday.

Remittances from Pakistanis abroad rose 10.36 per cent to $8.20 billion in the first seven months, July to January, of the 2012/13 fiscal year, from $7.43 billion in the same period last year.

An amount of $1,089 billion was remitted by overseas Pakistanis in January 2013 as against $ 1,110 billion in the same month of the last fiscal year (January 2012).

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