Pakistan, Saudi investors to set up $5 million edible oil refinery in Saudi Arabia – Pakistan trade official
KARACHI: Pakistani and Saudi Arabian investors will set up a $5 million edible oil refinery in Saudi Arabia through a joint venture (JV), following recent business-to-business interactions between the two countries, a senior Pakistani trade official said on Tuesday.
The move comes weeks after a 50-member high-level delegation led by Saudi Arabia’s Deputy Minister of Investment Ibrahim Al Mubarak arrived in Pakistan to explore investment opportunities in the South Asian country.
Pakistan and Saudi Arabia have been working closely in recent weeks to expand a bilateral trade and investment agreement, with Crown Prince Mohammed bin Salman last month reaffirming the country’s commitment to fast-track a $5 billion investment package.
“We are building an edible oil refinery in Saudi Arabia with a local partner. We shared the feasibility with each other and [an agreement] “Soon,” Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told Arab News on Tuesday, “the joint venture will be launched.”
Ikram, whose businesses in Pakistan include edible oil refineries, said the project cost would be shared equally among investment partners, including himself.
“The project will cost $5 million and we will share the cost and it will be realized within six months,” he said, adding that Saudi authorities were providing land and other facilities for the refinery.
Saudi Arabia is currently strengthening its economy in a modern way under Vision 2030, a strategic development framework aimed at reducing its reliance on oil. Under the framework, the kingdom is also encouraging investment in diversified sectors to expand its export base.
“their [Saudi authorities] “The condition is to increase oil exports by up to 50 percent and sell the rest in the local market,” Sheikh said.
The FPCCI chief said Saudi Arabia’s interest in Pakistan’s multilateral sector is “constantly growing” and the two sides have made visible progress, including inflow of Saudi investments in oil, agriculture and other sectors.
Last December, Aramco, a leading global integrated energy and chemicals company, signed an agreement to acquire a 40% stake in Gas & Oil Pakistan Ltd. Earlier, Shell Pakistan Ltd (SPL) signed an agreement with Saudi Arabia’s Wafi Energy to sell its domestic operations in November 2023, following Shell Oil Company’s announcement of its withdrawal from Pakistan and sale of a 77% stake in the local business.
Pakistani traders are also hoping for more investment inflows from the Gulf countries.
The FPCCI president said that the Special Investment Promotion Council of Pakistan (SIFC), consisting of Pakistan’s civil and military leaders and specially tasked with promoting foreign investment in Pakistan, plays a vital role in promoting investment in the South Asian country.
The council, which was established in June last year, focuses on investments in the energy, agriculture, mining, information technology and aviation sectors, particularly in the Gulf countries.
