Pakistan State Oil (PSO) is going to sign an agreement with the ATC of Saudi Arabia.
Soon PSO is signing an agreement with Saudi Arabia’s ATC (Aramco’s Product Trading Company) in order to begin a facility of twelve-month deferred payment which would worth per month around $270 million.
The agreement finalization depends upon the approval from the Economic Coordination Committee (ECC) of the cabinet which is anticipated to be done today.
A financing agreement has already been signed by the government for buying crude oil and LNG from the Saudi Fund for Development (SFD).
This agreement was signed the day Muhammad Bin Salman, the crowned prince of Saudi Arabia who came to Pakistan for a visit on the 15th of February, 2019.
This pact made with ATC of Saudi Arabia means that Pakistan will be allowed to import some of the petroleum products like crude oil or LNG annually on the basis of deferred payments with a worth of $3.2 billion.
And if both the countries agreed then the financing agreement would also be extended for 2 more years. But to obtain the products from Saudi Arabia Pakistan needs to provide a firm financial guarantee to the FA.
Many other countries have been a part of this agreement for the obtainment of such petroleum product from Saudi Arabia, so in order to import petroleum products, PSO first needs to get into an agreement called the Sale Purchase Agreement (SPA) with the ATC.
Pakistan State Oil is a public body and is obliged to make the above-said deal according to the terms of Public Procurement Rules, 2004. According to the financing agreement, the open bidding rules will not be followed in case of supply through the Saudi Fund for Development.
The ECC would authorize the division of petroleum to invoke the mentioned provisions in PPRA rules also these rules will allow PSO to make the deal as per the agreed terms.