Russia To Increase Involvement and Invest In Pakistan’s Oil Industry

Russia’s Energy Minister Sergey Tsivilyov, has stated that Russia is exploring participation in the upgrade of oil refineries in Pakistan. He was speaking after the meeting of the intergovernmental commission on trade and economic cooperation of Russia and Pakistan, and said that “In the energy sphere, we are already supplying oil to Pakistan. We also talked about participation in the upgrade of oil refineries.”

Russia and Pakistan are also negotiating an increase in Russian oil supplies to Pakistan, Deputy Energy Minister Roman Marshavin said at the same meeting.

That potential cooperation is also being extended to Russian companies being invited to explore oil and gas on the country’s shelf, as well as to increase oil recovery, according to Marshavin. He said that “We have received interesting investment proposals from Pakistan in oil and gas exploration on Pakistan’s maritime shelf, increasing oil recovery at mature fields and in oil refining. Russian companies are ready to study these proposals. We will continue these discussions with Islamabad.”

The two countries are also looking to develop energy supplies from Russia to Pakistan, with Tsivilyov adding “We have stable supplies of Russian oil to Pakistan. All technical and financial issues are being promptly resolved by the countries. Work is underway to increase such supplies and diversify cargoes.”

In April this year, Pakistan placed an order to import 100,000 tons of Russian Urals oil. Pakistan said this was a trial, and intended to test the ability of domestic enterprises to process oil from Russia. In June, a total of 101,000 tons of Russian oil were delivered to the port of Karachi by two tankers. Its recipient was the Pakistan Refining Company (PRL).

In October 2023, the Pakistani government allowed companies to enter into commercial contracts with Russian oil exporters. Pakistan’s new ambassador to Russia, Muhammad Khalid Jamali, said that the country is interested in expanding supplies of Russian oil, and negotiations are underway with Moscow to conclude long-term contracts.

There has been unconfirmed speculation that Pakistan has reached an agreement with Russia to restart crude oil imports from January 2025 under a Government-to-Government (GtG) arrangement, with one cargo to be imported per month. The reports also suggested that PRL would import 12 cargoes of Russian crude oil annually, with a payment mechanism facilitated by the Governor of the State Bank of Pakistan.

Russia and Pakistan are also considering other opportunities for the activities of Russian companies in the gas and oil sphere in Pakistan, Tsivilyov added.