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KPC in recent years agreed to have a 100,000 b/d refinery built in Pakistan in partnership with Pakistan State Oil (PSO). KPC later was among bidders for a planned sale of 51% of PSO, which then had a 70% share of Pakistan's oil market. At the time, that market was estimated at 360,000 b/d; but since then it has grown to more than 450,000 b/d. Private Kuwaiti interests also bid for the privatisation PSO, in competition with Dubai-based interests.

Kuwait & Gulf Link (KGL) on March 17, 2007, expressed keen interest in PSO. Visiting Islamabad, Dr Yousef al-Zalzalah, the KGL chairman and former member of Kuwait's National Assembly (parliament), held meetings with the then Pakistani PM Shaukat Aziz and Federal Minister for Privatisation and Investment Zahid Hamid, discussing matters related to the bidding and the privatisation process of PSO. He was accompanied by Kuwait's Ambassador to Islamabad, Faisal al-Mulaifi, and two KGL executives.

The official Kuwait news agency KUNA on March 18, 2007, quoted Dr Zalzalah as saying his team requested the Pakistani PM to postpone the bidding for the PSO sell-off from May till June and that Mr Aziz responded positively. He said KGL was particularly interested to invest in the oil and gas businesses of Pakistan, adding that his company would be participating in the bidding for gas exploration by end-2007.

KGL purchased 25% shares of Pro-Gas Company of Pakistan in January 2007. Dr Zalzalah then said that, in the following five years, Pakistan's economy would be boosted because of vast unexplored potentials and business-friendly policies, adding: "We also invited Prime Minister Aziz and Federal Minister Zahid Hamid to visit Kuwait".

Pakistan was offering 26% of PSO, along with transfer of management to the highest bidder. It was then reported that PSO was one of the hottest selling entities at the country's stock exchanges. PSO was to be privatised in June 2006, but the plan could not be materialised because of a top-level reshuffle at the Privatisation Commission ahead of the bidding date (see background in omt25KwtTrE&PJun18-07).

KPC in 1995 proposed to the Pakistani government a 120,000 b/d refining JV in Baluchistan. But the project has been on hold since Islamabad began reviewing its investment policies. Like India, Pakistan buys crude and oil products from KPC on term basis.

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Publication:APS Review Gas Market Trends
Geographic Code:9PAKI
Date:Jun 22, 2009
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