A syndicate of Chinese state-owned companies has offered to establish an oil refinery worth $15 billion in Pakistan, Board of Investment (BOI) Secretary Fareena Mazhar told reporters.
The China Petroleum Pipeline Engineering Company LTD (CCP) and China Zhen Hua Import and Export Corporation are willing to invest $15 billion in oil refinery complex. China Petroleum Pipeline Engineering Company Limited is a subsidiary of the China National Petroleum Corporation and the primary builder of pipelines in China.
The proposed oil refinery is expected to be established in four years at a site that is not part of any of the nine Special Economic Zones (SEZs) of the China-Pakistan Economic Corridor (CPEC). However, after it is built, the project can get a zone status, and if planned properly, may even receive special tax exemptions and related benefits from the government. However, the company-specific SEZ would not be entitled for the government-funded provision of utility services, said Fareena Mazhar.
China is the third country that has shown interest in setting up an oil refinery in Pakistan after the United Arab Emirates and Saudi Arabia. The oil refinery is expected to provide some relief to Pakistan, which is grappling with the challenge of huge outflows of foreign investment in recent years.
From 2002 to 2012, Chinese investment in Pakistan amounted to $814 million as compared to $5.7 billion the US investment during this period, said the secretary. Between the years 2013 to 2021, the Chinese investment increased six-and-a-half times to $6.1 billion but the US investment dropped three-fourth to $1.5 billion, added the BOI secretary.
The BOI makes efforts to bring in foreign investors but they get stuck in undue regulatory approval procedures, said the secretary. The BOI would ensure fast-track processing of the Chinese offer and has already requested the Petroleum Division to review the business preposition and respond to it this week, Fareena Mazhar added.
To a question about the government’s less focus on bringing the foreign direct investment, she replied that without increasing both the foreign direct investment (FDI) and exports, the country cannot overcome its external sector problems.
She counted different steps that the BOI took recently to encourage the foreign investors to invest in Pakistan.
The secretary said that the China International Investment Promotion joint business portal has been established where the Chinese government recommended companies would share their business proposals with Pakistani authorities.
So far 13 Chinese companies have shown interest. An investor relationship management system is also set up for tracking the issues being faced by foreign investors.