ISLAMABAD: Pakistan government is hoping to get investment from Saudi Arabia, the United Arab Emirates and other Gulf countries at an upcoming bidding process of new petroleum exploration licenses, said the ministry of energy’s petroleum division on Saturday, adding that the exercise will reduce the country’s energy import bill, boost its foreign exchange reserves and bolster the ailing economy.
“We will be attending ADIPEC [Abu Dhabi International Petroleum Exhibition and Conference] in November to market our ten new exploration blocks for Middle Eastern companies, especially Saudi Arabia and the UAE,” Sher Afgan Khan, additional-secretary (policy) at the ministry, told Arab News in an interview.
The country is planning to award ten new oil and gas exploration licenses out of 30 blocks in December this year to attract foreign investment amounting to about $150 million. “Our explored oil and gas reserves are depleting fast,” he added. “Therefore, we need new exploration urgently to cut our energy import bill.”
Pakistan meets about 80 percent of its energy requirements through international buying. Its energy demand has also been increasing by 8 percent a year while its oil imports constitute nearly a quarter of its total import bill, according to the Pakistan Bureau of Statistics.
The South Asian nation has indigenous gas production of four billion cubic feet per day, and its crude oil production stands at about 95,000 barrels per day which only meets about 15 percent of the country’s overall demand.
“In the last five years, we couldn’t award even a single exploration license to a foreign company due to security reasons,” Khan said. “But now there is no issue of law and order, and we are hopeful that the next bidding round for the award of new exploration licenses will attract the interest of new foreign players.”
He informed that his ministry had demarcated a total of 40 oil exploration blocks, out of which ten would be awarded by the end of the year and the remaining 30 would be auctioned in the next year and a half.
Pakistan was offering “the best prices” to the oil and gas exploration companies in the region, he said, adding that the country had total sedimentary deposits of 827,000 square kilometers while the area under exploration was 361,000 square kilometers.
Khan also maintained that about 1,100 exploratory wells had been drilled in the country to this day.
A delegation of the Ministry of Energy, led by Special Assistant to Prime Minister on Petroleum Nadeem Babar, is currently visiting the United States and Canada to market and promote the oil and gas exploration opportunities in Pakistan.
“During our interaction with US and Canadian companies, Pakistan’s perspective was shared and it was emphasized that Pakistan was liberalizing the gas sector and offering numerous tax incentives to attract foreign investment,” the secretary added.
Pakistan seeks investment from Saudi, UAE for oil and gas exploration
Pakistan seeks investment from Saudi, UAE for oil and gas exploration
- Government plans to market ten new exploration blocks to Middle Eastern companies in November
- The country’s demand for energy is increasing at the rate of eight percent per year, experts say
IMF surcharges on borrowings exacerbate global inequities: report
BENGALURU: Countries, mostly middle and lower-income, have been burdened by surcharges on top of interest payments on their borrowings from the International Monetary Fund, widening global inequities, according to a report by US think tanks.
WHY IT’S IMPORTANT
Indebted member countries paid about $6.4 billion in surcharges between 2020-2023, the report from Boston University’s Global Development Policy Center and Columbia University’s Initiative for Policy Dialogue released on Tuesday showed.
And the number of countries paying these surcharges has more than doubled in the last four years.
The IMF is expected to charge an estimated $9.8 billion in surcharges in the next five years, according to an earlier report by the Center for Economic and Policy Research.
Critics of the policy argue that surcharges do not hasten repayment and instead punish countries already struggling with liquidity constraints, increase the risk of debt distress and divert scarce resources that could be used to boost the struggling economies.
BY THE NUMBERS
Countries such as Ukraine, Egypt, Argentina, Barbados and Pakistan pay the most in surcharges, the report showed, accounting for 90 percent of the IMF’s surcharge revenues.
These surcharges, levied on top of the fund’s increasingly steeper basic rate, are IMF’s single largest source of revenue, accounting for 50 percent of total revenue in 2023.
KEY QUOTES
“IMF surcharges are inherently pro-cyclical as they increase debt service payments when a borrowing country is most need of emergency financing," Global Development Policy Center’s Director Kevin Gallagher said.
“Increasing surcharges and global shocks are compounding the economic pressure on vulnerable countries.”
CONTEXT
Data published by the Institute of International Finance earlier this year showed global debt levels hit a record of $313 trillion in 2023, while the debt-to-GDP ratio — a reading indicating a country’s ability to pay back debts — across emerging economies also scaled fresh peaks.
IMF shareholders agreed last week on the importance of addressing challenges faced by low-income countries, Managing Director Kristalina Georgieva said on Friday.
China’s wealth fund joins with Bahrain’s Investcorp for $1bn Middle East investment
RIYADH: China’s growing interest in the Middle East continues as the country’s sovereign wealth fund partnered with Bahrain’s Investcorp to establish a $1 billion investment pot.
According to a press statement, Investcorp Golden Horizon fund will assist companies across Saudi Arabia, the wider Gulf Cooperation Council region and China.
The reserve will be anchored by reputable institutional and private investors from the GCC, as well as China Investment Corp.
The press statement revealed that target companies are expected to have high growth potential in sectors including consumer, health care, logistics and business services.
“During the past couple of years, we have built several bilateral funds with leading financial institutions to facilitate industrial cooperation between China and major economies in the world,” said Bin Qi, executive vice president and chief information officer at CIC.
He added: “Currently, we are working closely with Investcorp to build a similar bilateral fund to strengthen financial and industrial ties between China and GCC countries.”
This commitment from CIC comes when the GCC’s appeal to institutional investors is gathering pace, thanks to its stable regulatory environment and pro-business policies, driven by economic diversification efforts in the region and strategic privatization mandates.
“This commitment by CIC, one of the world’s largest sovereign wealth funds, is a testament to Investcorp’s unparalleled franchise in the GCC and reinforces the trust placed in the firm’s global platform and teams. We are looking forward to building on this relationship and growing our partnership in the future,” said Mohammed Al-Ardhi, executive chairman of Investcorp.
Co-CEO of Investcorp Hazem Ben-Gacem said the launch of the new fund will facilitate cross-border cooperation and investments between the GCC and China.
Trade and economic relationships between the Middle East and China have always been strong.
In 2023, China’s exports to Saudi Arabia and the UAE amounted to $42.86 billion and $55.68 billion respectively.
On the other hand, the Asian giant’s imports from Saudi Arabia totaled $64.36 billion in 2023.
In November, Saudi Arabia’s central bank, also known as SAMA, and the People’s Bank of China signed a local currency swap agreement worth $6.93 billion.
SAMA, in a statement, said that the three-year agreement “has been established in the context of financial cooperation between the Saudi Central Bank and the People’s Bank of China.”
The Asian country’s central bank said that the agreement will help strengthen financial cooperation between Saudi Arabia and China, promote the use of local currencies, and strengthen trade and investments between nations.
Oil Updates – crude steady as market weighs US demand concerns, Middle East conflict risks
SINGAPORE: Oil prices steadied on Thursday after settling lower in the previous day, as signs of retreating fuel demand in the US, the world’s biggest oil user, contended with widening conflict risks in the key Middle East producing region, according to Reuters.
Brent crude futures inched up 18 cents, or 0.2 percent, to $88.20 a barrel at 9:30 a.m. Saudi time, while US West Texas Intermediate crude futures gained 13 cents, or 0.2 percent, to $82.94 a barrel.
Data from the US Energy Information Administration on Wednesday showed that gasoline stockpiles fell less than forecast while distillate stockpiles rose against expectations of a decline, reflecting signs of slowing demand.
The falling fuel demand is occurring amid signs of cooling US business activity in April and as stronger-than-expected inflation and employment data means the US Federal Reserve is more likely to delay expected interest rate cuts, weighing on economic sentiment.
“The current weakness in benchmark prices, after testing above $90 (a barrel) levels, is due to market sentiment refocusing on global economic headwinds over geopolitical tensions,” said Emril Jamil, senior oil analyst at LSEG Oil Research.
Geopolitics aside, prices this quarter will be driven by factors including major producer supply cuts, economic data out of China and Eurozone, on top of incremental demand expectations as the Northern Hemisphere heads into summer amid expected tighter supply, said Jamil.
A better indication of the Fed’s rate intentions will be seen after US gross domestic product and March personal consumption expenditure data is released on Thursday and Friday.
Meanwhile, fighting in the Gaza Strip between Israel and Hamas is expected to expand as Israel may start an assault on Rafah, in the enclave’s south, which may increase the risk of a wider war that could potentially disrupt oil supplies.
However, there have been no other signs of direct conflict between Israel and Hamas-backer Iran, a major oil producer, since last week.
“Tensions between Iran and Israel have eased, but Israeli attacks on Gaza are expected to worsen, and the risk of conflicts spreading to neighboring countries is underpinning oil prices,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co. Ltd.
Other EIA data on Wednesday showed that crude stocks slumped by 6.4 million barrels to 453.6 million barrels, compared with expectations in a Reuters poll for an 825,000-barrel rise.
Saudia unveils beta version of new Travel Companion platform
RIYADH: The Kingdom’s flagship airline Saudia has launched a beta version of its digital platform, the Travel Companion, powered by advanced artificial intelligence, aiming to transform the industry.
The new initiative, unveiled during a special event, is part of a two-year plan developed in partnership with global professional services firm Accenture.
“This platform, resulting from our ongoing collaboration with Accenture, signifies our forward-looking approach to providing guests with unparalleled convenience and flexibility,” the Director General of Saudia Group, Ibrahim Al-Omar, said.
The main objective of this launch is to transform how travelers engage with the airline and establish new benchmarks for digital travel.
TC, initially named, offers personalized and tailored solutions to meet individual preferences and needs, providing search results from trusted and authenticated sources and incorporating visual aids in its responses.
The interface is designed as a comprehensive, one-stop solution that enables users to book concierge services, including hotels, transportation, and restaurants, as well as activities and attractions, without the need to switch between multiple platforms.
“This is a beta version. This is not the product. We will keep enhancing and developing it,” Al-Omar stressed.
Moreover, it establishes seamless connections with transportation platforms and various train companies, ensuring a smooth and uninterrupted journey.
Commenting on the new announcement, Chief Data and Technology Officer at Saudia, Abdulgader Attiah, told Arab News: “It’s like having the VVVIP concierge service at your hand. For public, it’s not any anymore VIP service. It’s not a paid service. You have it for free, and it will give you all what all kind of services that VVIP service would provide to you, so it’s your private concierge.”
He added: “We will be the anchor for the travel industry. We are not anymore, an operator for an airline, but with this app, you will be an anchor for all tourism ecosystem in a single app, so everyone can collaborate in this app, and having the links, so you don’t need to communicate with any other party, so through this app, you can communicate to all travel ecosystem.”
In future phases, Saudia plans to add more features, including voice command and digital payment solutions.
“Once we add the complete solution we will add the more services, which is we call it the concierge services; booking for hotels and transportation and the restaurants, all of these ones is done during the, next two years, and this is the complete life cycle of the, vision we have today,” Attiah told Arab News.
He added: “If you want to develop this app, five years back, it would take three, four years. Today, we have developed only in seven, eight months. To that from the inspirational part to having an actual booking, we started back in June and now we are live.”
Attiah also underlined that Saudia is the first airline in the world to implement a GenAI-based chatbot that can perform end-to-end actions, meaning it can not only engage in conversation but also execute tasks or actions based on user requests.
With an always-on Travel Companion available through a telecom e-SIM card provided by Saudia, users can stay connected globally without relying on additional internet providers.
Furthermore, users can purchase data packages for extended use, guaranteeing continuous access to the platform’s services.
Saudi economy witnessing a fundamental shift, says minister
RIYADH: Since the launch of Vision 2030, Saudi Arabia has witnessed a fundamental shift in its economy and the business environment is transforming with the creation of new sectors, said the Kingdom’s economy minister.
Faisal Al-Ibrahim was speaking at a conference in Riyadh on Wednesday during which he highlighted the fast-evolving business landscape of the Kingdom focused on diversifying its income sources away from oil.
Speaking at the event titled “Industrial policies to promote economic diversification,” the top official said there have been fundamental changes in the legislative and economic regulations to promote sustainable development since the launching of the Vision 2030 plan.
He said the Kingdom’s efforts to diversify its economy have led to the creation of new sectors due to the initiation of several megaprojects such as NEOM, the Red Sea, and others.
“We stand at a crossroads to change the global economy,” Al-Ibrahim said.
He stressed the need for strategies to ensure a flexible and sustainable economy.
“The presence of foreign investments will develop competitiveness in the long term,” the minister affirmed.
The minister also highlighted how the Kingdom was working in the medium term to focus on transforming sectors that represent a technological shift.
Saudi Arabia is keen on achieving development in the medium term by balancing short-term profits and promoting long-term success, Al-Ibrahim highlighted.
Since the launch of the vision, the Ministry of Economy and Planning has conducted several economic studies aimed at diversifying the economy by developing objectives for all sectors, raising complexity levels, and studying emerging economies to enhance the Kingdom’s capabilities.
