Pakistan's Blue Economy: Vast Offshore Resources in Exclusive Economic Zone

Pakistan has a 1,000 kilometers long coastline on the Arabian Sea with maritime sovereignty over 200 nautical miles deep Exclusive Economic Zone (EEZ) and 150 nautical miles of Continental Shelf. This adds 290,000 square kilometers of sea or about 36% of the country's land area open for tapping vast resources in it.

Pakistan's "Blue Economy" in this extended economic zone includes seafood and energy resources as well as international trade connectivity with the rest of the world. It offers opportunities for water sports, recreation and tourism in the coastal areas of Pakistan. One sign of the recognition of Pakistan's blue economy is the ongoing three-day International Maritime Conference organized on the theme of ‘Global Geopolitics in Transition: Rethinking Maritime Dynamics in the Indian Ocean Region’ under the auspices of National Institute of Maritime Affairs.

Offshore Energy Resources:

A Pakistan Basin Study conducted in 2009 found that the country has six onshore and two offshore basins; offshore basins being the Indus basin and the Makran basin in the Arabian Sea.

Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg
The Indus offshore basin is a rift basin that geologists say developed after the separation of the Indian Plate from Africa in the late Jurassic period. It is believed to be the second largest submarine fan system in the world after the Bay of Bengal with high probability of hydrocarbon discoveries.

The Makran Offshore basin is separated from the Indus Offshore basin by Murray ridge, according to Syed Mustafa Amjad's report in Dawn. It is an oceanic and continental crust subduction zone with deepwater trenches and volcanic activity. The basin consists of oceanic crust and periodic emergence of temporary mud islands along the coast suggesting strong evidence of large hydrocarbon deposits.

American energy giant Exxon-Mobil has joined the offshore oil and gas exploration efforts started by Oil and Gas Development Corporation (OGDC), Pakistan Petroleum Limited (PPL) and Italian energy giant ENI, according to media reports.

Each company has 25% stake in the joint venture under an agreement signed at the Prime Minister’s Secretariat in May 2018 among ExxonMobil, Government Holdings Private Limited (GHPL), PPL, ENI and OGDC.

Exxon-Mobile's entry in Pakistan brings deep offshore drilling technology, its long experience and financial resources to the country. It is expected to accelerate exploration and more discoveries.

CPEC and Trade:

Pakistan has built Gwadar as its third major deep sea port after Karachi and Port Qasim. Gwadar port's planned capacity when it is completed will be 300 to 400 million tons of cargo annually.  It is comparable to the capacity of all of India's ports combined annual capacity of 500 million tons of cargo today.   It is far larger than the 10-12 million tons cargo handling capacity planned for Chabahar.



"We believe Gwadar is following in the footsteps of Shenzhen which represented a historic population rise, from a population of 30,000 in 1980 to 11 million people in 2017. Gwadar is poised to see massive population growth due to incoming industries, and we expect this to be one of the most strategic cities in South Asia." Hao-Yeh Chang,  China Pak Investments Corporation

To put Gwadar's scale in perspective, let's compare it with the largest US port of Long Beach which handles 80 million tons of cargo, about a quarter of what Gwadar will handle upon completion of the project. Gawadar port will be capable of handling the world's largest container ships and massive oil tankers.

Gawadar port is being built in Pakistan by the Chinese as part of the ambitious $46 billion China-Pakistan Economic Corridor (CPEC) that will eventually serve as Hong Kong West for  growing Chinese trade with the Middle East and Europe.  CPEC will also enable Pakistan to bypass Afghanistan to trade with Central Asia through China across China's borders with Tajikistan, Kyrgyzstan and Kazakhstan.

The volume of Gwadar property searches surged 14-fold on Pakistan’s largest real estate database, Zameen.com, between 2014 and 2016, up from a prior rate of a few hundred a month. “It’s like a gold rush,” said Chief Executive Zeeshan Ali Khan to an Express Tribune newspaper reporter. “Anyone who is interested in real estate, be it an investor or a developer, is eyeing Gwadar.”

Chinese private investment company China Pak Investment Corporation has recently announced it is acquiring 3.6 million square foot International Port City project in Gwadar. It plans to develop a $150 million gated community to handle the influx of 500,000 Chinese professionals expected in Gwadar by 2022.

Seafood Industry:

Pakistan’s fishing industry is very small relative to its vast potential. Pakistani fishermen own small fishing boats and their catch is very limited. The industry contributes only 0.4% of the country's $315 billion GDP.   However, the nation's seafood exports are growing, In fiscal year 2017-18, seafood exports increased 27.94% to 198,420 tons, earning $451.026 million.

Pakistani finishing industry is in  need of major modernization to make it more productive. China’s infrastructure investments in Pakistan are opening up the local fisheries sector on the Arabian Sea, with a major Chinese power station builder completing a fishing port as a “gift” to local people, according to a report in SeafoodSource. State-owned China State Power Investment Corp., which is building several power plants in Pakistan, said a new fishing port in Lasbela region on the Arabian Sea would aid the economy and increase the efficiency of the local fishing community in Baluchistan Province (of which Lasbela is part), says the report.

Summary:

Pakistan is beginning to focus on tapping vast resources in its 290,000 square kilometers of sea or about 36% of the country's land area.  Fishing industry is being modernized with Chinese help and Exxon has begun exploring offshore oil and gas reserves. Gwadar has been built as the third deep sea port and a major new metropolis is being built t hat could one day rival Chinese city of Shenzhen.

Related Links:

Haq's Musings

South Asia Investor Review

US EIA Estimates of Oil and Gas in Pakistan

Gwadar to Rival Shenzhen

Exxon Exploring Offshore Oil and Gas in Pakistan

Why Blackouts and Bailouts in Energy-Rich Pakistan?

Riaz Haq's Youtube Channel


Comments

Afridi said…
What kind of authority we have on the continental shelf? Can we stop other countries ships from passing through this area or tax that area if they want to pass through it etc?
Riaz Haq said…
Afridi: "What kind of authority we have on the continental shelf? Can we stop other countries ships from passing through this area or tax that area if they want to pass through it etc?"

An exclusive economic zone (EEZ) is a sea zone prescribed by the United Nations Convention on the Law of the Sea over which a state has special rights regarding the exploration and use of marine resources, including energy production from water and wind. It stretches from the baseline out to 200 nautical miles (nmi) from its coast. In colloquial usage, the term may include the continental shelf. The term does not include either the territorial sea (22.2 km) or the continental shelf beyond the 200 nmi limit. The difference between the territorial sea (22.2 km) and the exclusive economic zone is that the first confers full sovereignty over the waters, whereas the second is merely a "sovereign right" which refers to the coastal state's rights below the surface of the sea. The surface waters, as can be seen in the map, are international waters.

https://en.wikipedia.org/wiki/Exclusive_economic_zone
Riaz Haq said…
#Aman19: #Pakistan #Navy’s expanding influence. The 46-nation naval exercise further cemented PN’s role as a leading and professional naval force not only in the #ArabiaSea region but also in the larger area of the #IndianOcean.
https://tribune.com.pk/story/1908895/1-aman-19-pakistan-navys-expanding-influence/

KARACHI: PNS Aslat and Saif fire a volley from their main guns towards a target buoy 4,500 yards away as helicopters buzz overhead and warships maneuver in the Arabian Sea during the culminating phase of Aman-19, the largest multinational exercise ever hosted by the Pakistan Navy (PN).

With participation from 46 navies, the exercise further cemented PN’s role as a leading and professional naval force not only in the Arabia Sea region but also in the larger area of the Indian Ocean.
With geopolitics undergoing a major realignment phase, the navy has become a major tool to project force, create goodwill throughout the region and increase Pakistan’s influence in the region.

“Now, we match India in terms of presence. If the Indian Navy has been to an area in the Indian Ocean, the Pakistan Navy is present there too,” said a senior PN officer.

The focus on further bolstering the combat capability of the PN is evident with the recent agreement to purchase eight submarines and four 054AP class warships from China.

On the final day of Aman-19, warships of the PN and foreign participating navies, including the Royal Navy, US Navy and the Peoples Liberation Army Navy (PLAN), came together to showcase the level of coordination achieved over days of drills at sea.

The drills kicked off by PN ships launching rocket depth charges at a simulated submarine target.

Pakistan-made PNS Moawin – the largest ship in the fleet – took centre stage during the second drill as it refueled ships while underway. PNS Aslat and PNS Saif took a position on either side of the fleet tanker the drill started. Underway refueling and replenishment is considered to be one of the most dangerous activities carried out at sea and extreme care was taken by PN personnel during the drill.

Gunnery demonstrations were also carried out by PN, Turkish Navy and (Chinese) PLAN (Navy) warships, and round after round from their main guns were thrown downrange towards target buoys with precision and speed.

As the drills ended, all participating ships presented a fleet review to the chief guest. Flying Pakistani colours – as a sign of respect – and their national flags, foreign and PN ships sailed past the chief guest during the phase.


Turkish frigate TCG Gokceada, PLAN’s Kunlun Shan and Luoma Hu, United Kingdom’s HMS Dragon, Royal Australia Navy’s Ballarat, American Arleigh Burke-class destroyer USS Decatur, Sri Lanka’s off-shore patrol vessel SLNS Sayurala, Royal Malaysian Navy’s support ship KD Mahawangsa and KD Kasturi, Italian Navy’s Carlo Margottini, Royal Navy of Oman’s Al Rahmani PNS Aslat, Saif, Shamsheer, Khyber, Azmat, Alamgir and Pakistan Maritime Security (PMSA) ships Kashmir, Zhob, Himmat and Basol were part of the fleet review.

Riaz Haq said…
#Pakistan, #China build friendship ties at multinational naval exercise #Aman19 which also centered on #maritime #security to protect strategic economic projects such as the #CPEC as well as sea lanes from the Persian Gulf. https://sc.mp/vbm4x8 via @SCMPNews

Chinese naval commander says war games strengthened mutual understanding and trust

Drills included protection of strategic projects such as China-Pakistan economic corridor

The Pakistan Navy has hosted the Aman – which means “peace” – exercises every two years since 2007 to promote regional cooperation and stability. India has never been invited, in a sign of the long history of strained ties between the neighbours.

China, Japan and the United States were among the countries taking part in Aman-19, from February 8 to 12, which included maritime conferences, seminars and cross-ship visits, as well as 23 sea operations with main-gun firing, formation movement and replenishment-at-sea.

Shao Shuguang, commander of the People’s Liberation Army Navy’s 998 Fleet, was quoted on a Chinese military social media account as saying the exercise had strengthened mutual understanding and trust between the participating navies.

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China sent one of its biggest warships, the Kunlun Shan amphibious landing vessel, to the exercise, signalling its close relationship with Pakistan and the key role both nations hold in the Indian Ocean, according to analysts.


“The Pakistan-China relationship is very strong, and this is one more illustration of the strength of the Pakistan-China relationship,” said Madhav Das Nalapat, honorary director of the department of geopolitics and international relations at Manipal University in India.

“China is also now becoming an important maritime power, especially in the Indo-Pacific. By aligning with China, Pakistan hopes to get the synergy of that.

“India by itself cannot have any primacy in the Indian Ocean. But along with the United States, the two countries together can have primacy in the Indian Ocean. India is positioning itself to be allied with the US, but has not yet reached there.”

Tridivesh Singh Maini, assistant professor with the Jindal School of International Affairs in India, said the exercises should be a cause for alarm for India. “They will keep an eye on what’s going on, but they don’t need to be too concerned,” he said.

The military exercise also centred on maritime security to protect strategic economic projects such as the China-Pakistan Economic Corridor, as well as sea lanes from the Persian Gulf.

The US$62 billion China-Pakistan Economic Corridor (CPEC) is designed to connect China’s far west region of Xinjiang with Gwadar Port in Pakistan via a network of motorways, railways, oil pipelines and trading hubs.

The project is expected to be finished by 2030, and will provide China with an important trading route to the Middle East and Africa.

“India has very strenuously objected to the name CPEC being given to the part that goes through Pakistan-occupied Kashmir, but so far nothing has been done,” Nalapat said.

Kashmir has long been a hotbed for competing territorial claims between India and Pakistan. The two countries have fought three wars against each other since their independence from Britain in 1947, and two of those conflicts have centred on the Kashmir territorial dispute.
Riaz Haq said…
Construction on Gwadar Airport in Pakistan to start in April


https://www.airport-technology.com/news/pakistans-gwadar-international-airport/

Construction of the proposed Gwadar International Airport in Pakistan is scheduled to start in April this year following the completion of planning work.

The $246m airport is located in the volatile Balochistan region and is said to be the largest in Pakistan.

Soil testing started in January last year and has now been completed, with 300 boreholes created in several locations.

Sources told the EurAsian Times: “Currently, the Joint Coordination Committee (JCC) comprising the Pakistani and the Chinese officials look forward to initiate work on the Gwadar Airport in March as the feasibility study of the project has been completed, reviewed and approved by the competent authorities.”

The proposed airport will span over an area of 4,300 acres and will be able to accommodate narrow-body aircraft, including ATR 72 and Boeing B-737, as well as wide-body aircraft such as Boeing B-747.

“The projects in Gwadar are conducted under a framework agreement with NDRC and a MoU with MOFCOM and the Exim Bank. Unlike many of the other CPEC projects in Gwadar, the New Gwadar International Airport is not financed by a loan from China but through a Chinese grant,” the sources told the publication.

The sources also told the news agency that the Pakistani government is likely to announce the initiation of formal work on the Gwadar International Airport in the next two weeks.

They added: “The provision of funds for this project would be ensured in line with the mutual agreement made between the Pakistani and the Chinese governments.”

The Government of Balochistan has already added the Gwadar Airport to its master plan for Gwadar, which also involves projects to transform the region into a financial hub.
Riaz Haq said…
#Pakistan Aims To Become A Natural Gas Hotspot. It has estimated conventional #gas reserves of 20 trillion cu ft and #shale gas reserves exceed 100 trillion cu ft, making it attractive to foreign #energy investors. #FDI OilPrice.com https://oilprice.com/Energy/Natural-Gas/Pakistan-Aims-To-Become-A-Natural-Gas-Hotspot.html?utm_source=tw&utm_medium=tw_repost #oilprice

Pakistan is eager to open up its gas deposits to foreign energy companies in a bid to boost domestic production amid soaring demand, two government officials told media this week. The country has trillions of cubic feet in natural gas reserves, and although some of these have been exploited, the last decade has seen an outflow of foreign energy investors because of Islamist violence. Is the worst over?

Pakistan, a country with a fast-rising population, has recently been plagued with power outages largely resulting from a shortage of fuel necessary to keep its power stations going. Imports of gas and LNG are on the rise, but Imran Khan’s government seems to be aware that domestic production is almost invariably cheaper.

As a result, Pakistan is now preparing to start tendering gas blocks to all parties interested in exploration.

“I expect in the second half of this year we will be auctioning at least 10, if not 20 blocks for exploration,” the head of the government’s task force for an energy reform, Nadeem Babar, told Reuters earlier this week. He added that the government was in the process of making changes to its natural gas exploration and production regulations and drafting the country’s first ever shale resource policy.

“Pakistan provides a level playing field for all the E&P companies and even state-owned companies also have to participate in bidding rounds and compete with other companies,” said the country’s Minister for Petroleum and Natural Resources as quoted by The News International.

Pakistan imports nearly 80 percent of energy requirements from the international market. The country’s demand for energy has been increasing by 8 percent a year,” Ghulam Sarwar Khan also said, adding the government was doing its best to make Pakistan a more investor-friendly country as part of efforts to change the status quo in energy supply and demand.

Pakistan has estimated conventional gas reserves of 20 trillion cu ft and shale gas reserves exceed 100 trillion cu ft, which certainly makes the country an attractive destination for gas drillers as long as the security situation remains stable.

So far, the authorities have delineated more than 30 gas blocks, all onshore, Babar also told Reuters. If these attract sufficient interest, they could go a considerable way towards reducing the gas shortage plaguing the country, where demand for gas for 2017/18 was calculated at 6.9 billion cu ft daily, exceeding production by almost 3 billion cu ft.

With such demand levels—and rising, too—Pakistan is naturally an attractive destination for gas exploiters. Russia, Iran, and Qatar are all large suppliers. Earlier this week, Pakistani media reported government officials were negotiating an increase in Qatari LNG imports from 500 billion cu ft daily to 700 billion cu ft daily. Last month, the government inked an import deal with Gazprom for 500 million to 1 billion cu ft daily.

The country also recently completed two LNG import terminals but the super-cooled fuel is more expensive than Islamabad would like, especially given its level of import dependency.

According to Nadeem Babar, Aramco, Gazprom, and Exxon have already expressed interest in some of the blocks to be auctioned later this year. Italy’s Eni is already active in Pakistan and may join the bidders along with others attracted by the underexplored resources in the country where one of three wells yields commercial gas.
Riaz Haq said…
#ImranKhanPrimeMinister has seen high-confidence data indicating large #oil, #gas reserves. There's "kick pressure" from oil/gas in drilling. It was strong kick pressure that forced #ExxonMobil to stop #drilling for more mud to prevent blow-out. #Pakistan https://www.thenews.com.pk/latest/448666-largest-oil-gas-reserves-expected-near-karachi-hopes-pm-imran-khan
Riaz Haq said…
Early indications are it’s a gusher from large #oil #gas reserves offshore in #Pakistan. That’s why #Exxon had to interrupt drilling and prepare to prevent dangerous blow out in Arabian Sea off the coast of #Karachi https://www.riazhaq.com/2018/06/pakistan-among-top-5-countries-to.html?m=1 …
Riaz Haq said…
#Pakistan #oil good for whole region. Reserves will result in large cross-border capital flows, infrastructure #investment, energy #trades, and people-to-people exchanges. Development/utilization of reserves to be pillar of #economic integration, stability http://www.globaltimes.cn/content/1143525.shtml#.XJuh24zOLig.twitter By Hu Weijia

Pakistan may soon hit the oil jackpot, and that will be good news for not only the country itself but all of South Asia as well as China and Gulf nations.

Pakistani Prime Minister Imran Khan was quoted by local media outlet Dawn as saying that "there's a strong possibility that we may discover a very big (oil) reserve in our waters." If his prediction comes true, the discovery will help the South Asian country tackle its economic problems.

With Pakistan's economy in the doldrums, the cash-strapped country may have a more urgent need for foreign investment if massive oil reserves are indeed discovered. According to Dawn, US oil giant Exxon Mobil and Italy's ENI have been involved since January in drilling an ultra-deep oil well.

There may be more international companies wanting to participate in related projects ranging from exploration to refining and logistics. The related investment will help Pakistan maintain its growth momentum.

China has sound cooperation in energy with Pakistan. A big oil find would stimulate investment enthusiasm among Chinese companies. China is willing to support Pakistan's efforts to seize the development opportunity such a find might bring, and handle any challenges.

The China-Pakistan Economic Corridor (CPEC) was originally conceived as a strategic project with oil and gas pipeline links between Northwest China's Xinjiang Uyghur Autonomous Region and Pakistan's Gwadar port.

If Pakistan discovers massive oil reserves, that will be a motivation to extend Pakistan's pipeline network further into Iran and India, and also to enhance energy cooperation with Gulf nations such as Saudi Arabia.

Not only China but also the whole region will benefit from economic integration through energy connectivity.

Using those reserves will likely result in large cross-border capital flows, infrastructure investment, energy trades, and people-to-people exchanges. The region will see the development and utilization of oil reserves as a pillar of economic integration and stability.

As for India, Pakistan's potential oil reserves will increase the country's attractiveness for Indian companies, as oil imports rise in India due to higher fuel demand despite bilateral disputes.

The geopolitical picture in Asia has long been complex and uneven, but Pakistan's potential oil reserves are likely be a game-changer for the region, with economic cooperation in energy.

Hopefully India and Gulf nations won't ignore the opportunities to enhance energy cooperation with Pakistan and help fostering an energy network in Asia.
Riaz Haq said…
#Pakistan’s massive #oil and #gas discovery report expected in April 2019. Experts believe huge hydrocarbon deposits offshore, enough for 25 to 30 years. Estimated gas reserves are 3 to 8 trillion cubic feet (TCF), 25-40% of country’s total gas reserves. https://gulfnews.com/world/asia/pakistan/pakistans-massive-oil-and-gas-discovery-report-to-be-out-in-april-1.62968777

Dubai: Pakistan will announce the discovery of massive oil and gas reserves in the next three weeks, said an official.

A consortium of four leading companies led by US-based ExxonMobil, which has started drilling in ultra-deep waters offshore Karachi, is likely to submit its report by April, Pakistan’s official news agency APP reported on Thursday.

The consortium has claimed it has discovered massive oil and gas reserves offshore Indus G-Block called Kekra-I some 230-km off the Karachi coast.

Gulf News earlier reported that the location of the reserves is near Iran borders. On Monday, Pakistan Prime Minister Imran Khan had also hinted at finding ‘massive’ oil reserves off the coast of Karachi.

He said he would soon share good news with the nation. He had said Pakistan would not need to import oil after the offshore reserves are found.

“Steady drilling is in progress and there are ‘good symptoms’ about the success of the project. Currently, more than 4,000 metres of vertical drilling has been completed. Drilling is under way horizontally against the target of around 5,500 metres,” the official said.

Experts believe that there are huge hydrocarbon deposits, sufficient for the country’s needs for 25 to 30 years. The energy scarce nation is anxiously waiting for good news.

The official said exploration activity is continuing round-the-clock by a highly skilled team of more than 200 professionals with periodical tests of specimens conducted after almost every 1,000-metre drill.

The well’s diameter is 18 to 24 inches and companies had set the target depth of 5,500 metres, the official said, adding that the discovery is anticipated to yield gas flows which could be ‘as big as Sui field’. Estimated reserves are three to eight trillion cubic feet (TCF), or 25-40 per cent of the country’s total gas reserves.

The official said the country is in dire need of a big discovery as existing hydrocarbon reserves are depleting fast and its reliance on imported gas and oil is increasing with each passing day.


According to data of a recent study, existing deposits in Pakistan will further deplete 60 per cent by the year 2027. It underlined the need to step up exploration in potential areas on a war-footing.

The offshore drilling is a joint venture of ENI, Exxon Mobil, Oil and Gas Development Company Limited and Pakistan Petroleum Limited. In December 2018, Exxon Mobil had announced that it would reinvest in the Pakistani market after a gap of nearly three decades.

According to media reports, if oil deposits are discovered as expected, Pakistan will be among top 10 oil-producing countries.

Pakistan currently meets only 15 per cent of its domestic petroleum needs with crude oil production of around 22 million tons; the other 85 per cent is met through imports.

The country is facing a huge current account deficit of up to $18 billion and is spending a substantial amount of foreign exchange reserves on import of oil. The import bill of Pakistan rose by to $12.928 billion in the July-May 2017-18 period of the last fiscal year.
Riaz Haq said…
Tighter #Fiscal/#Monetary Policies To Weigh On Short-Term Growth In #Pakistan. #GDP to slow to 4.4% in FY2018/19 (July-June) and 4.1% in FY2019/20 due to negative impact from recovering #oil prices , from 5.4% in FY2017/18. #economy http://www.fitchsolutions.com/country-risk-sovereigns/economics/tighter-policies-weigh-short-term-growth-pakistan-12-03-2019

Key View

We at Fitch Solutions maintain our forecast for Pakistan’s real GDP to slow to 4.4% in FY2018/19 (July-June), from 5.4% in FY2017/18, due to tightening monetary and fiscal conditions.
Additionally, rising geopolitical tensions and slowing global growth will likely also dampen Pakistan’s economic outlook for the remainder of FY2018/19.
We maintain our view for growth to come in at 4.1% in FY2019/20 as we expect the negative impact from recovering oil prices to outweigh the positives that will cushion the slowdown.
Riaz Haq said…
#Pakistan hikes #fuel prices 6.45% amid spiraling #inflation measured at 8.21% last month. #economy @AJENews https://aje.io/a9e3b

Pakistan's government has hiked fuel prices by up to 6.45 percent, as the country continues to face widening fiscal and current account deficits amid spiralling inflation.

On Monday, countrywide fuel prices increased to Rs98.89 ($0.70) per litre, with diesel prices at Rs117.43 ($0.83), a government notification said, hitting nine-month highs.

Pakistan subsidises the price of most fuels in the country, but has been cutting those payments in recent months as the newly elected Pakistan Tehreek-e-Insaf (PTI) government struggles to contain ballooning government expenditure amid an overall economic slowdown.

In the past six months, the country has received at least $8 billion in grants and loans from Saudi Arabia, the United Arab Emirates and key strategic and economic partner China, with whom Pakistan is embarking on the $56bn China Pakistan Economic Corridor (CPEC) project.

The influxes have helped stave off a looming foreign reserve crisis, with central bank reserves back up to $8.56bn, or just over two months of imports, according to a central bank statement released on Thursday.

Last week, the International Monetary Fund’s Pakistan mission chief Ernesto Ramirez Rigo held two days of meetings with Pakistani Finance Minister Asad Umar, central bank officials and others ahead of an expected IMF bailout.

The bailout, which both Pakistani PM Imran Khan and IMF chief Christine Lagarde alluded to after a meeting in February, would be Pakistan’s 13th IMF programme since 1980.

Spiraling inflation
The fuel price hike comes amid spiralling consumer inflation in the South Asian country, with consumer price inflation (CPI) hitting 8.21 percent last month, according to the Pakistan Bureau of Statistics (PBS), the highest level since June 2014.

The inflation numbers have been mainly driven by the increasing prices of fuel and food, according to a PBS statement.


Pakistan battles to control inflation
On Friday, Pakistan’s central bank increased the country's interest rates by 50 basis points to 10.75 percent, saying that the economy was uner considerable strain.

"The current account deficit remains high, fiscal consolidation is slower than anticipated and core inflation continues to rise," said a statement accompanying the announcement.

As a result, the central bank has pared back its expected annual GDP growth rate projection from around 6 percent to 3.5 percent.

"The increase in petrol and diesel prices tend to raise inflationary expectations among consumers," said Saad Ali, head of research at Karachi-based Inter Market Securities. "Almost all sectors are affected by it, because in Pakistan most goods are still transported via road."

Ali said the central bank was currently attempting to discourage non-essential imports by raising interest rates and through currency devaluation. The Pakistani rupee has lost roughly 23 percent of its value against the US dollar in the last year.

"The initial problem that we had was a wide current account deficit and resultant depletion of forex reserves," said Ali.

"The current account deficit was widening because of consumer demand and robust industrial activity – both leading to higher demand for imports – so to curtail that the central bank had to first devalue the currency and increase interest rates," he added.

Ali said the measures taken thus far had managed to bring the current account deficit to a more manageable level, but that rising inflation continues to pose a significant threat to the economy.

"All of this is a reflection of the central bank trying to curtail demand," he said. “This will lead to modest GDP growth, but that will be a sign that they have been successful."
Riaz Haq said…
#Pakistan’s #Gwadar International #Airport will be the largest in the country. Spread over an area of 4,300 acres, it will be able to land Airbus #A380, the biggest wide-body passenger #aircraft. #Balochistan #China #CPEC http://bit.ly/2YF8a4k

The construction of the airport will be completed within three years at the cost of US$256million.

Unlike other projects under the China-Pakistan Economic Corridor (CPEC) are operating under concessional loans, the Airport is planned under a Chinese grant.

The airport will also be the biggest in Pakistan at an area of 4,300 acres.

It will be the biggest airport of Pakistan. In comparison to other airports like Karachi Airport (3,700 acres), Islamabad International Airport (3,600 acres), Lahore Airport (2,800 acres), the Gwadar Airport will be built on 4,300 acres.


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The airport is one of several development projects in Gwadar worth $690 million which the Chinese government is financing as part of its Belt and Road Initiative.

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The project is part of overall infrastructure development of Balochistan. It would be developed as a green-field facility with all modern facilities for safe operation.

The project would comprise a modern terminal building with cargo terminal having initial handling capacity of 30,000 tons per year.

On this occasion, a memorandum of understanding (MoU) was signed for construction of Pakistan and China Vocational Training Institute and Pak-China Friendship Hospital.

Prime Minister Imran thanked the Chinese Ambassador for the grant given by the Chinese government for the airport.

Benefits to local people
He categorically said any development would be of no use unless it benefited the local people.

He said in the past, the locals were ignored while executing the development projects in Balochistan. He said gas worth billions of rupees was extracted from Sui but it could not change the living standard of the local people.

He said it was pleasing that the capacity of the hospital in Gwadar would be enhanced and a vocational training institute would also help create employment opportunities.

Prime Minister Imran announced to launch Insaf Sehat Card (health card) to provide health insurance cover worth Rs720,000 to every family.

He said previously power was being transmitted from Iran, but now the government had decided to link the area with national grid.

Desalination plant
A desalination plant would also be set up in the city and under Clean and Green Pakistan, one million saplings would be planted. Besides, a solid waste management system would also be established to protect the area from pollution.

He said following the models of Dubai, Abu Dhabi and Sharjah, the government had decided to recycle water in Gwadar to water the plants.

He told the gathering that Gwadar and Quetta would be linked through railways as it was the best travel mode but unfortunately Pakistan had been lagging behind in this sector.

Rail links
He said Chinese support was being sought to upgrade railway lines as China had the most advanced rail system. A high-speed rail link would cut travel time bewteen Karachi and Lahore to within four hours, instead of 18 hours by car, or 21 hours by bus at the moment.

Khan said having located at an ideal location and being well connected, Gwadar’s development would be the development of whole of Pakistan.

During the development process of the new airport, the existing airport’s capacity would also be enhanced by making it capable of transporting big aircrafts.

With the establishment of new international airport, the Gwadar city would become hub of aviation industry and it would also help elevating the CPEC framework.
Riaz Haq said…
Great Game Moves to Sea: Tripolar Competition in #IndianOcean. The dynamics of intensifying competition — #military, #economic, #diplomatic — in #SouthAsia, mainly between #China, #India, #Pakistan, and #UnitedStates. #CPEC #pakistannavy @WarOnTheRocks https://warontherocks.com/2019/04/the-great-game-moves-to-sea-tripolar-competition-in-the-indian-ocean-region/

Each state’s approach to the increasingly crowded Indian Ocean environs is informed by history, economic interests, and simple geography. Three significant divergences in the three countries’ frameworks are their perspectives on the Middle East, Pakistan’s regional role, and the balance between military and non-military foreign policy tools. Friction resulting from any of these divergences – what I call geo-strategic seams – could undermine the success of any one of these national strategies for the Indian Ocean arena. Ultimately, China’s more integrated strategy may give it an edge over America’s more disjointed approach and India’s more inward focus.

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India, sitting in the middle of the Indian Ocean, defines the region as extending from the African littoral to Southeast Asia. In 2015, Indian Prime Minister Narendra Modi put forward “Security and Growth for All in the Region,” or SAGAR, as an early, high-level articulation of the Indian vision. In 2017, External Affairs Minister Sushma Swaraj specifically defined the region as extending from the Gulf of Aden in the west, through Chabahar Port in southwest Iran, and over to Burma and Thailand in the east. Notably, India does not view Pakistan as a part of this regional cooperation strategy, instead seeing it as an enemy. Similarly, India tries to isolate its long history of land border disputes with China from its wider policy towards the Indian Ocean, even though countering Beijing is one of New Delhi’s goals.

India’s focus on the Indian Ocean area is relatively new, dating back only to the 1990s. For most of the period since it gained independence in 1947, India has been preoccupied with land border threats posed by Pakistan and China, and has apparently lacked the ambition and capacity to exert influence beyond its immediate neighbors.

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Unlike with India’s strategy for the Indo-Pacific, however, Pakistan is a central element of China’s approach, linking the maritime and continental components of the Belt and Road Initiative. India, and to a lesser degree the United States, views Pakistan as a declining power that should be internationally isolated for its support of terrorism. In contrast, the China-Pakistan Economic Corridor is one of the most important elements of the Belt and Road since it provides a direct land bridge from China to the Arabian Sea and allows trade access to support economic development in China’s restive west. Illustrating its priorities, China has promised some $60 billion to develop this corridor and has already made substantial investments in Pakistan focusing on energy and transport infrastructure, including the port of Gwadar in western Pakistan. While some doubt the viability of many of these projects, this investment clearly reflects Beijing’s view that Pakistan is essential to its regional strategy.
Riaz Haq said…
Something Fishy Is Going on Between #Iran and #China (and #Pakistan). Pakistan is far ahead of Iran when it comes to fishing. #Pakistanis have put in place a new deep-sea policy that bans #fishing beyond 12 miles #offshore. #CPEC #Gwadar #Karachi https://www.atlanticcouncil.org/blogs/iransource/something-fishy-is-going-on-between-iran-and-china#.XKeSN0Ht7nA.twitter

both countries need China more than ever to help withstand US pressure, so it’s unclear whether either will be willing to antagonize Beijing over fishing rights.

China is one of the world’s largest importers and exporters of fish. Its fishery industry is among its most profitable export businesses. However, overfishing and depleted regional fish stocks have forced China to look for new resources around the world. Some countries, including in the European Union, send fish to China for processing and re-export back to those countries. Others have established their own fish processing facilities in China. However, domestic demand for fish in China continues to outstrip supply.

China is Pakistan’s largest fish export market. But Pakistan’s own resources are being depleted for many reasons, most critically over-fishing.In recent months, Pakistani officials have put in place a new deep-sea policy that bans fishing beyond 12 miles offshore. The policy has been effective in reducing the size of the catch but is highly unpopular within the fishing industry, which points to the foreign currency Pakistan earns from fish exports as an argument forrelaxing or removing the ban. The new policy has reduced Pakistan’s seafood exports and hurt its economy.

Pakistan is hoping that the China-Pakistan Economic Corridor (CPEC) will increase the profitability of its fish export business. CPEC has already improved methods of seafood transportation from Pakistan to China. Transportation of fish by land takes a fraction of time it takes by sea, is more cost effective, and decreases loss of quality before the fish arrives in China. Construction of an international airport at Pakistan’s Gwadar seaport, one of CPEC’s projects, is expected to further increase Pakistan’s seafood exports to China.

However, not everyone in Pakistan has welcomed these projects. Local fishermen in Gwadar port recently protested the construction of an expressway that has cutoff routes to the Arabian Sea. Strikes have frequently impacted fish exports to the United Arab Emirates, Saudi Arabia, Kuwait, and other regional destinations.

Yet Pakistan is far ahead of Iran when it comes to fishing. The industry in Pakistan is an essential part of the economy and has a complex structure. Its numerous trawlers, which drag large fishing nets through water, are equipped to extract many types of seafood.

In contrast, Iran’s trawlers are either rented or foreign-owned, mainly from China.
Riaz Haq said…
2019 #Oil and #Gas Exploration Off to Flying Start. Eni’s Kekra well in #Pakistani waters has pre-drill prospective resource estimates of 1.5 billion barrels of oil equivalent. #exxonmobil #Pakistan #offshore | Rigzone https://www.rigzone.com/news/2019_oil_and_gas_exploration_off_to_flying_start-08-apr-2019-158543-article/?utm_source=GLOBAL_ENG&utm_medium=SM_TW&utm_campaign=SHARE_DESKTOP via @rigzone

Oil and gas exploration is off to a flying start in 2019, according to independent energy research and business intelligence company Rystad Energy.

Global discoveries of conventional resources in the first quarter reached 3.2 billion barrels of oil equivalent (boe), Rystad revealed Monday in a statement sent to Rigzone. Most of the gains were recorded in February, which saw 2.2 billion barrels of discovered resources, Rystad highlighted.

Majors reported more than 2.4 billion boe of the discovered resources for the quarter, Rystad outlined in the statement. ExxonMobil was the most successful, with three offshore discoveries accounting for 38 percent of total discovered volumes.

“If the rest of 2019 continues at a similar pace, this year will be on track to exceed last year’s discovered resources by 30 percent,” Rystad Upstream Analyst Taiyab Zain Shariff said in the company statement.

The total volume of global conventional discoveries in 2018 was 9.1 billion boe, according to Rystad. Total global conventional discoveries were 10.3 billion boe in 2017 and 8.4 billion boe in 2016.

No Signs of Slowing Down
In the statement, Rystad said the push for “substantial” new discoveries shows no signs of slowing down, with another 35 “high impact” exploration wells expected to be drilled this year, both onshore and offshore.

Rystad highlighted that three such wells are already underway; the Shell-operated Peroba well off Brazil - with pre-drill prospective resource estimates of 5.3 billion boe, Eni’s Kekra well in Pakistani waters -with pre-drill prospective resource estimates of 1.5 billion boe and the Total-operated Etzil well off Mexico -with pre-drill prospective resource estimates of 2.7 billion boe.

“If these wells prove successful, 2019’s interim discovered resources will be the largest since the downturn in 2014,” Shariff stated.

Earlier this year, Rystad said improved market conditions and lower well costs had led exploration and production players to “ramp up” their 2019 exploration activities in all parts of the world.

“Renewed optimism in exploration activities is anticipated in 2019, with operators from various segments aiming for multiple high-impact campaigns – both onshore and offshore – in essentially all corners of the world,” Rystad Energy Senior Analyst, Rohit Patel, said in a company statement back in February.

“These include wells targeting large prospects, play openers, wells in frontier and emerging basins and operator communicated high impact wells,” Patel added.

Rystad is headquartered in Oslo and has locations in Houston, Singapore, London, New York, Sydney, Moscow, Stavanger, Rio de Janeiro, Tokyo, Dubai and Bangalore. The company traces its roots back to 2004.
Riaz Haq said…
#China trying to create its own globally decisive #naval force through #BRI. “These actions are not only directed at the #UnitedStates: China and #Russia are working to redefine the norms of the entire international system" #CPEC #Pakistan #Gwadar #India https://www.thehindu.com/news/international/china-trying-to-create-its-own-globally-decisive-naval-force-through-bri-pentagon/article26814938.ece

China is trying to create its own globally decisive naval force through the ambitious multi-billion dollar Belt and Road Initiative, the Pentagon has told the US Congress, warning that Beijing’s “unfavourable deals” strangle a nation’s sovereignty like an Anaconda enwrapping its next meal.

Touted as President Xi Jinping’s pet project, China is vigorously pursuing the Belt and Road initiative (BRI), offering billions of dollars of loans for infrastructure projects to different countries as it looks to expand global influence.

“China’s Belt and Road Initiative in particular is blending diplomatic, economic, military, and social elements of its national power in an attempt to create its own globally decisive naval force,” John Richardson, Chief of Naval Operations, told members of House Armed Services Committee during a Congressional hearing on Thursday.

“China’s modus operandi preys off nations’ financial vulnerabilities. They contract to build commercial ports, promise to upgrade domestic facilities, and invest in national infrastructure projects,” he said.

The BRI focuses on improving connectivity and cooperation among Asian countries, Africa, China and Europe.

The project has become a major stumbling block in India-China relations as the controversial $60 billion China Pakistan Economic Corridor (CPEC) has been listed as its “flagship project“.

“Slowly, as the belt tightens, these commercial ports transition to dual uses, doubling as military bases that dot strategic waterways. Then, the belt is cinched as China leverages debt to gain control and access,” Richardson said.

“In the final analysis, these unfavourable deals strangle a nation’s sovereignty -like an Anaconda enwrapping its next meal. Scenes like this are expanding westward from China through Sri Lanka, Pakistan, Djibouti and now to our NATO treaty allies, Greece and Italy,” he told members of the House Armed Services Committee.

In his testimony, the top naval official said despite the United States’ persistent work over two centuries to keep the seas open to every nation and every mariner, there are those who seek to upend this free and open order and stem the tide that has steadily lifted all boats.

“As discussed in the 2018 National Defense Strategy (NDS), China and Russia are deploying all elements of their national power to achieve their global ambitions,” he said.

China and Russia seek to accumulate power at America’s expense and may imperil the diplomatic, economic, and military bonds that link the United States to its allies and partners, Richardson added.

“These actions are not only directed at the United States: China and Russia are working to redefine the norms of the entire international system on terms more favourable to themselves,” he said.

China and Russia are determined to replace the current free and open world order with an insular system, Richardson asserted.

“They are attempting to impose unilateral rules, re-draw territorial boundaries, and redefine exclusive economic zones so they can regulate who comes and who goes, who sails through and who sails around.

“These countries’ actions are undermining international security. This behaviour breeds distrust and harms our most vital national interests,” he told the lawmakers.


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