Pakistan Economy - News & Updates - Archive

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ISLAMABAD: Commerce Minister, Humayun AKhtar Khan would be visiting Argentina and Brazil for signing the Framework Agreement on Trade between Pakistan and Mercosur and to participate in the Mercosur summit scheduled to be held on July 21, at Buenos Aires, Argentina.

On the initiative of the President Pervez Musharraf during his visit to Latin America, negotiations were initiated for Free Trade Agreement (FTA) with Mercosur.

It is worth mentioning here that India has already signed a Preferential Trade Agreement with Mercosur in 2004. Mercosur represents a combined market of 210 million people, with a GDP of over a trillion dollars.

The Mercosur countries produce 50 percent of Latin America’s GDP and contain 43 percent of its population and 59 percent of its total landmass. The per capita GDP of its four countries is 30 percent higher than that of Latin America as a whole. Argentina and Brazil dominate Mercosur, accounting for over 90 percent of the trading block’s GDP.

Pakistan’s export diversification drive requires region specific strategies. There is a need to evolve a strategy comprising pragmatic and doable actions.

An unexplored region Mercosur (Southern cone common market) which was set up in 1991 with the permanent members of Argentina, Brazil Paraguay & Uruguay with an objective to form a common market through coordinating fiscal and exchange rate policy, and accelerating economic development is the focal attention of Pakistan Government to get benefit from the successful experiences of Mercosur region.

 

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BEIJING: China is giving active consideration to the proposals of using Pakistan as energy corridor and strengthening communication links for common socio-economic uplift, Chinese Vice Foreign Minister Wu Dawei said on Wednesday.

Talking to a youth delegation from Pakistan at the Chinese Ministry Foreign Affairs the Chinese minister hoped that Gwadar seaport could provide an easy communication link to China for transportation of crude oil from the Middle East and other regions.

“We will make the best efforts in developing and promoting the port as hub of economic activities between the two countries,” he said adding: “China attaches great importance to its cooperation with Pakistan in the energy sector, and referred to the on-going joint ventures in the sector, especially the nuclear power plants.

The minister hoped that the visit of the Youth delegation would help in carrying forward the State-to-State relationship. He noted that the Sino-Pak friendship turned into a strong strategic partnership, since the establishment of the diplomatic ties 55 years back and also contributed to peace and development in the region.

He underlined the importance of exchanges of visits at the levels of youth, students, businessmen and the civil servants as these helped in developing greater understanding between the two countries.

Earlier, the leader of Pakistan delegation, Secretary Ministry of Youth Affairs Saleem Mahmood Saleem thanked the Chinese leadership and the people for their consistent support to Pakistan.

 

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During the British period, almost all gravity-flow canals were built wherever feasible, thus making the Indus basin the hub of one of the largest contiguous irrigation systems in the world. Numerous gravity flow irrigation systems were built on rivers right from Malakand Agency on the Swat river during the nineteenth century up to the last barrage in Sindh, at Kotri, on the Indus. Moreover, barrages on the Jhelum, the Chenab, the Ravi, the Sutlej and Beas rivers were also built to irrigate the Indus basin.

Therefore, gravity flow irrigation schemes were initiated, executed and exhausted on the Swat river, the Panjkora river, Kabul river, Kunar river, Kurram river, Bara river, Kohat Toi, the Indus, the Jhelum, the Chenab, the Ravi, the Sutlej and the Beas. Thus gravity-flow irrigation schemes were almost exhausted in NWFP, Punjab and Sindh. Unfortunately, Balochistan was considered almost out of the reach of the Indus basin for gravity flow irrigation and was thus ignored by the British and then by Pakistan.

No one ever thought of irrigating the Kachi plain by gravity flow from the Indus. The vast and fertile Kachi plain is a unique plane -- with an area of about 3.5 million acres it is a flat piece that can easily be irrigated by gravity flow from the Indus River at the Chashma barrage site on the Indus. No one, including Dr Pieter Lieftnick of the World Bank, thought of irrigating it by gravity flow through the proposed "all-Pakistan grand canal" (APGC) passing through all the four provinces.

The APGC originates from Chashma barrage and passes through the town of Sibi, a distance of about 416 miles. Balochistan is the biggest but least irrigated province of Pakistan. Its vast, fertile and excellent virgin land has been ignored though it can easily be irrigated by gravity flow from Chashma barrage. The water needed for the irrigation of the whole of Kachi plane by traditional method is about 14,500 cusecs. But if irrigated by sprinkler and drip methods, only about 5,000 cusecs would be needed. The APGC can be extended to the farthest nooks of Sindh.

The APGC was not considered at the time of building the Chashma Right Bank Canal from Chashma barrage. Its preliminary feasibility report was prepared by this writer and presented to the Federal Government in 1961. Under the present circumstances, a new barrage on the downstream of Chashma barrage shall have to be built to divert huge discharge through the lined APGC. The water surface level of the Indus at Chashma barrage site is about 642. The barrage pond level to divert water is about 660. Nearly the same would be the position of the new barrage if Chashma barrage is not used for taking-off APGC on the Right Bank of the Indus. The elevation of Sibi town that is the highest tip of the Kachi plain is at 440. The Sibi Town is at a distance of about 416 miles from Chashma barrage. Therefore, gravity flow canal is feasible to irrigate the whole of Kachi plain.

The Kachi plain tail at an elevation of 390 is some 20 miles upstream of the Kirthar branch and 28 miles upstream of Usta Mohammad. APGC would irrigate the whole of Kachi plain besides the area of upper Sindh. It can also command the area already irrigated by the Guddu barrage. Water from this canal can be provided to the Thar desert if water management is finally undertaken. The detailed feasibility of the APGC may be carried out to confirm this proposal.

The APGC can be designed to the desired discharge ranging from 15,000 cusecs to 60,000 cusecs to irrigate new areas as well supply water to the areas already under the command of Guddu barrage. This can be an alternative and efficient route for the supply of water. This will be a short route via Balochistan to irrigate land in upper Sindh. Moreover, Sindh will not be able to use Balochistan water from Guddu barrage as is generally complained by Balochistan.

The Kachi canal under construction is designed for a discharge of 5100 cusecs off-taking from Taunsa barrage. It would hardly irrigate about 0.3 million acres that comes to about one-tenth of the Kachi plain area of 3.5 million acres. The proposed APGC would irrigate 10 times more area than the canal under construction from the lower level at Taunsa barrage.

The APGC would open the Right Bank areas of the Indus for rapid development. The Kachi plain would serve as the mini Indus basin. The Grand Canal will also have an excellent road along the canal from Chashma to Sui to Sibi and onward to Karachi. This will be the shortest route to Peshawar, Rawalpindi, Islamabad and to the rest of the country reducing distances by hundreds of miles.

The APGC would bring revolutionary economic development in the country and shall serve as the major source of poverty alleviation and the major source of food and fruit production. It would alleviate poverty from the poorest areas of NWFP, Punjab, Balochistan and Sindh. This is a unique gravity flow irrigation scheme that would benefit all the four provinces.

 

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KARACHI: Governor State Bank of Pakistan Dr Shamshad Akhtar on Wednesday expressed optimism that Dubai Islamic Bank will set standards for other Islamic banks to follow.

Inaugurating the bank’s cloth market branch, she said we have observed phenomenal growth in Islamic banking in a short period of time. Islamic banking has evolved as an institution to help achieve financial sector growth in a Muslim country like Pakistan.

According to press release of the bank, CEO, Dubai Islamic Bank, Saad Zaman welcoming the governor central bank said the Pakistani Islamic banking market has a high potential of growth owing to investment friendly policies of the government.

He said the central bank of the country has created a positive economic environment for business.

He said this is the second branch and during next 18 months 70 branches will be opened in Pakistan.

 

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KARACHI: Bosicor Oil Pakistan Limited (BOPL), a recently established company, is setting up a crude oil refinery having initial capacity of 120,000 barrels per day on the coast of Balochistan.

Being set up 45 kilometres from Karachi, it will cost Rs18.8 billion and is expected to start production by the end of year 2009, said a press release issued here.

The refinery will consist of a crude distillation unit, a gas separation unit, naphtha hydro-treating unit, platform unit, diesel hydro-treating unit and a vacuum distillation unit.

Bosicor Pakistan Limited will be setting up 13,000 barrels per day Penex-Molex (Isomerisation) unit alongside its existing refinery in close vicinity to the new one.

The unit will be used by both companies for conversion of light naphtha product pool into low benzene, environmentally friendly motor gasoline.

The investment of Rs18.8 billion includes Rs7.2 billion of equity, Rs3.5 billion suppliers’ credit, Rs2.7 billion working capital, for all which company has firm commitments. Habib Bank Limited is mandated as sole lead underwriter and manager for remaining Rs5.4 billion

 

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Currency basket for debt management proposed

By Azhar Mahmood

KARACHI: A joint report of the World Bank and International Monetary Fund has suggested to the Ministry of Finance to create a currency basket for managing external debt.

The two organisations have also asked the Government of Pakistan that in order to attain fiscal sustainability, “currency risk of national debt must be controlled.”

Sources in the Ministry of Finance disclosed the detailed report, submitted recently, pointed out the biggest risk that might arise from the debt portfolio was related to currency because 48 per cent of the public debt was in foreign currencies.

In the short term, they observed, there was limited room to mitigate the risk as macroeconomic and market development constraints lessened the potential for substituting foreign currency debt.

However, in the medium term, a gradual development of the domestic market for government securities was critical to allow for an increase in the share of domestic debt without trading foreign currency for interest and refinancing risks.

An expanded range of options to manage debt would emerge as a result of the market’s increased capacity to absorb long-term fixed securities in Pak rupees, they said.

The World Bank and IMF further observed the government of Pakistan would greatly benefit from evaluating the impact of possible rupee depreciation on debt servicing costs. “A quantitative analysis (of public debt) will also help in developing a benchmark for the currency structure of external debt.”

The currency benchmark for external debt, they said, should take into account the part of foreign currency reserves that could be used as a natural hedge, and proposed a currency basket for external debt aimed at reducing the volatility in debt servicing relative to government revenues.

They suggested to the government to conduct a historical analysis of the current debt portfolio and describe the evolution of public debt structure indicating key changes in relevant market variables and explaining significant events affecting the composition of debt portfolio.

“A risk analysis of the current debt portfolio may be conducted and it should cover interest rate and refinancing risks indicating how these risks could impact on the debt burden and the government’s ability to timely meet its official obligations,” the report said.

They further asked the government to project future debt management, including fiscal and debt projections, assumptions about exchange and interest rates and constraints on portfolio choice, including the prospect of market development.

They called on the government to set out a strategy, specifying ranges for key risk indicators of the debt portfolio and financing programmes. The strategy should also describe measures or projects that were designed to support the development of debt market.

 

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Rs 104 billion subsidy for essential items availability: Musharraf

ISLAMABAD (July 21 2006): While strongly endorsing the government claim that the national economy was on the move, President General Pervez Musharraf on Thursday unveiled a multi-pronged strategy to address the issues of poverty, unemployment, price-hike and power shortage. In his televised address to the nation.

The president said the government's strategy to create employment for youth through development and industrialisation and bring poverty down has been a great success.

He said the price hike was the outcome of the growing economy, however, the government was taking various steps to protect the downtrodden section of society from its effects. He said the government would spend Rs 104 billion for subsidising the prices of essential items to ensure their availability to a common man at lower rates.

The president added that Utility Store Corporation's (USC) network has been expanded to union council level, besides outsourcing its outlet in far flung areas to ensure that the poor get all essential items at subsidised rates.

He said the poverty figures showing reduction from 34 to 24 percent were verified and authenticated by the international donors and experts. But, to him even the exiting poverty ratio was not ideal for Pakistan.

He asked the government to take all possible steps to improve its performance in this area. The president said the government was providing jobs in different departments such as police, education and others. However, he added, the credit of making substantial reduction in poverty goes to the industrial sector, which provided jobs to a large number of people in the past few years.

The president also unfolded a self-employment scheme and announced that the government will provide concessional loans to the youth for self-employment.

He said the new scheme would benefit 1.9 million people. He termed the budget 2006-07, as pro-poor and noted that a Rs 415 billion for Public Sector Development Programme (PSDP) will expedite development process across the country, besides creating hundreds of thousands new jobs.

He said that the new budget was of extra ordinary importance in many ways and keeping in mind its features the Opposition could not find any thing in it for criticising the government.

Pervez Musharraf said the government would implement a 3-pronged strategy to bring power crisis to an end. It comprised short, medium and long term programme. He said in short term Wapda and KESC will generate 300MW power from trailer-mounted thermal plants in next six to eight months.

This will be followed by medium term plant to generate 8600MW electricity between 2008 and 2010, from different resources including wind energy, hydel and other alternative resource.

In third phase, additional 19150MW power will be produced by 2015 to meet its growing demand. He directed Wapda and KESC authorities that they should advertise load shedding schedule in advance to inform the people.

He said Fata and Balochistan were two prioritised areas and they will get special development funds. He added that the government would establish Fata Development Board for implementing the development projects of billions of rupee on fast track.

The president also assured all-out financial support for development in Balochistan. He vowed that the government would establish its writ in Balochistan, besides continuing action against Bughti, Marri and Mangal sardars who were against the development in their respective areas.

The president also directed the provincial government to take action against those who fan terrorism and sectarian violence by misusing loud speakers facility.

SUSPENSION OF PEACE PROCESS SUCCESS OF TERRORISTS President General Pervez Musharraf has said that suspension of Pakistan-India peace process would be success of terrorists who do not want normal and co-operative relations between the two countries.

Addressing the nation, the President said that instead of levelling unsubstantiated charges, India should provide information about the terrorists and Pakistan, being a frontline state in the international war against terrorism, would fully cooperate in unearthing and punishing the criminals.

He said the people and the government of Pakistan strongly condemn these gruesome terrorist acts and sympathise with the bereaved families. "Pakistan itself is a victim of terrorism and fighting the enemies of humanity in and outside the country," he added.

He said that it would a defeat to the peace loving people of India and Pakistan if the two countries suspend their peace process to solve their outstanding disputes and differences by dialogue and peaceful means.

With regard to Afghanistan, the President said that after breaking network of al Qaeda, and eliminating 600 to 700 its activists in Pakistan, the government has shifted its focus on Taliban who have reorganised themselves in Southern Afghanistan under the leadership of Mullah Omar.

"Some elements of Taliban in the tribal areas of Pakistan cross the Pak-Afghan porous border and join the Afghan Taliban in anti-government activities; but we are determined to foil their nefarious designs," he added.

He said that in Pakistan, Taliban propagate the negative backward culture and force people not to see TV programmes, listen to music and grow beards.

He said the government has now adopted a new strategy under which efficient officers would be appointed as Political Agents in Fata, the dormant institution of Tribal Maliks would be reinvigorated and strengthened to play its effective role and a grand jirga would be organised to solve the local problems.

He said that the new NWFP Governor has been given free hand to take all necessary steps to bring life to normalcy and withdrawal of the army from the area.

With regard to the international scene, the President said that the entire world is in turmoil as Israel has now launched a big attack on Lebanon. He said that there are dangers of involvement of Syria and Iran in the conflict, which would have a direct bearing on our national security. The President said that Pakistan could ensure its national security through internal unity and its maintenance of military strength. He said that the government was meeting defence needs of the Army, Navy and the Air Force to thwart any challenge.

AFP ADDS: President warned that terrorist attacks in India, Taliban unrest in Afghanistan and the crisis in the Middle East all risked causing instability in Pakistan.

He appealed for a cease-fire in the Middle East, and warned that the crisis could destabilise Pakistan. "I appeal to the world and Israel to end this crisis, move towards a cease-fire and resolve through dialogue," he said. "The conflict could have an impact on Pakistan. We need to ensure our own security and it is the national solidarity, which will ensure the country's security," he said.

 

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Headline inflation falls to 7.6 percent in June: SBP

KARACHI (July 21 2006): The headline inflation has fallen to 7.6 percent year-on-year in June 2006 that was one percentage-point less than the inflation recorded in the corresponding month of last year, although inflationary pressures persisted in the economy for the second year in a row.

The inflation containment was more visible in the last six months of FY06 as compared to first six months (July 05 to December 05): the average CPI inflation during the first half of the year was 8.4 percent which declined to 7.4 percent in the second half primarily due to fall in food inflation.

The wholesale price inflation was nine percent in June 2006 which was lower than average inflation of more than 11 percent during the first six months of FY06, according to the State Bank's monthly publication titled 'Inflation Monitor'.

The Inflation Monitor for the month of June, 2006 which was released on SBP website today says that the CPI food inflation was recorded at 7.8 percent in June 2006 that was significantly lower than 9.3 percent in the corresponding month last year.

The Inflation Monitor finds that prices of some key food items like pulses and sugar started declining though they are still very high as compared to the same period last year. The non-food inflation was recorded at 7.5 percent during June 2006 against 8.4 percent in June 2005.

Core inflation was recorded at 6.3 percent in June 2006 compared with 7.4 percent in June 2005. Although core inflation declined steadily during FY06, it seems the rate of decline fell by the end of the year. Despite a declining trend in different measures of inflation, the inflation is still very high in comparison with the average of the past five years, according to the Inflation Monitor which gives an objective analysis of inflationary trends and reviews different aspects of price movements in the country.

Wage inflation increased significantly during June 2006 with average wages of construction workers (carpenters, masons, labourers, plumbers, and electricians) rising by 18.2 per cent in June 2006. The real wage inflation also remained on a rising path and was recorded at 10.6 percent in June 2006 compared with three percent in the corresponding month of last year, the Inflation Monitor added.

 

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IMF gives thumbs up to CRR and SLR increase

ISLAMABAD (July 21 2006): The International Monetary Fund (IMF) has appreciated the State Bank's (SBP) decision to raise cash reserve requirement (CRR) and statutory liquidity ratio (SLR), saying these measures would help the government address serious issues such as inflation and widening external current account deficit.

In a statement issued here on Thursday, the IMF resident representative for Pakistan said the SBP action would withdraw excess liquidity from the banking system and help moderate credit expansion next month. Regional chief Migul Sarastano will lead the review mission.

An official of the resident representative office in Pakistan told Business Recorder, under Article 4 the IMF consultation mission will commence annual review of Pakistan's economy from third week of August.

The mission will meet economic managers to review implementation pace of ongoing reforms programme in different key areas of the economy such as energy, banking, education and police.

It will also meet privatisation commission authorities, Central Board of Revenue, agriculture and other important ministries/divisions to review the progress in these areas during 2005-06. Under the article, the IMF can review economic growth and suggest measures for economic policy making. After having close association with the IMF, Pakistan walked out of its programmes. Since Pakistan is IMF's member, its Article 4 allows it for annual review of the country's economy.

An IMF consultation mission had taken annual review of Pakistan's economy last year and suggested various measures for improvement in different areas. These were: improvement of power producing and distribution system, cutting down if not complete ending of possible subsidy-based gas pricing system, removal of bottlenecks impeding growth of the industrial sector and divestment of public sector entities such as OGDC, PPL, PTCL and many others on fast track basis.

The mission will review progress in these specific sectors and give its point of view for result-oriented progress.

 

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KARACHI (July 21 2006): Leaders of the business community appreciated the concern of President General Pervez Musharraf over street crimes and his resolve to reform the police service. Commenting on the President's address to the nation, Karachi Chamber of Commerce and Industry (KCCI) president Haroon Farooki said the President's address was very significant in regard to elimination of prevailing confusion about Balochistan situation.

There were so much confusion and a statement right from the top should clear any doubt. He hoped now the local and foreign media would see the Balochistan crisis in its real perspective instead of highlighting one side of the story.

He said the end to the prevailing confusion over such national issues would have a positive impact on the economy of the country and would encourage the foreign investors.

KCCI former president Siraj Kassam Teli said reforms in police service would bring about far-reaching effects on curbing and control ever rising street crimes.

Khalid Firoz, hailing the President's address, said political opponents of the present government should express their opinion but avoid opposition for the sake of opposition. Amjad Rafi said issues taken up by the President are very important for economic as well as political environment of the country.

 

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RAWALPINDI (July 21 2006): A German company TPR Fiber would invest one billion euros in a joint venture with Union Group of Companies (UGCs)to set up oil rigs assembly and water pipe plant in Rawalpindi employing over 500 people.

This was stated by Michael Stutzil, head of TPR Fiber, here on Thursday while briefing the reporters about the details of the joint venture. Zulfiqar Ali and Aamir Shahzad of Union Group of Companies (UCGs)were also present.

"We would also install plant in Multan in second phase", Michael told reporters adding that local and international oil companies in Pakistan would also benefit from these projects.

He said that Oil and Gas Development Corporation Limited (OGDCL) would get international standard oil rigs at cheaper rates. This would save precious foreign exchange, he added. Speaking on the occasion, Zulfiqar Ali said that water pipe industry would help the government provide safe and clean drinking water to people.

 

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KARACHI (July 21 2006): Bosicor Oil Pakistan Ltd, a private local firm, plans to build a 312 million dollars refinery in the country's south-west with a daily capacity of 180,000 barrels, the company said on Thursday.

Located about 45-kilometre (28 miles) west of Karachi on the coast of Balochistan, the refinery would initially have a capacity of 120,000 barrels per day (bpd), Bosicor said in a statement.

The project would be completed in two stages, with the first phase expected to be completed by 2009. "The first stage taking capacity to 145,000 bpd and the second stage taking the capacity to 180,000 bpd," it said. Bosicor already has a 30,000-bpd refinery in Balochistan.

The company estimated the cost of the project at 18.8 billion rupees, which includes 7.2 billion of equity, 3.5 billion rupees of suppliers' credits and 2.7 billion rupees of working capital. Bosicor has appointed Habib Bank Limited, the second-largest bank in Pakistan in terms of assets and deposits, as the lead underwriter.

Pakistan, almost totally dependent on oil imports, has an installed refining capacity of 12.82 million tonnes a year (just over 250,000 bpd) from its existing five refineries, but last year its refineries produced 11.33 million tonnes, official figures show. Pakistan consumes around 15 million tonnes of oil products annually.

The oil import bill for the 2005/06 fiscal year (July-June) exceeded 6.5 billion dollars, compared with 4.4 billion dollars in the previous fiscal year. Another oil plant, Indus Refinery, is being built in Karachi. It will have the capacity to process 4.2 million tonnes of crude oil a year (around 84,000 bpd), and will be completed by December 2007 at a cost of around 250 million dollars.

 

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Friday, July 21, 2006

By Tanveer Ahmed

KARACHI: Steady growth was noticed in upstream drilling activity, particularly exploratory drilling, in the 2005-06 fiscal year compared with the previous year, however it fell short of the whole year target to drill 101 wells.

Against a target of 101 drills for the last fiscal year, 64 wells were drilled including 33 exploratory and 31 development wells. Drilling activity increased by 36 percent over the drilling activity in the 2004-05 financial year when 47 wells, including 19 exploratory and 28 development wells were drilled, according to figures obtained by Daily Times on Thursday.

The Oil and Gas Development Company Ltd. (OGDCL) grabbed a major share of upstream drilling activity in the last fiscal year. Out of the 64 wells drilled during the year, 30 wells were those of the OGDCL. These include 23 exploratory and 7 development wells against the target of 33 exploratory and 22 development wells. The remainder was carried out by other players by drilling 34 wells including 10 exploratory and 24 development wells against the target of 18 and 24 exploratory and development wells respectively.

While drilling activities were found to be on the higher side in the last fiscal year, analysts of the oil and gas sector said the success rate was below the historical average. In the 2005-06 fiscal year, there were six oil and gas discoveries in the country from 33 exploratory wells, which were drilled during the same year. “This translates into a success rate of 1:5.5 wells (out of 5.5 wells drilled, 1 discovery was achieved). This compares unfavorably with Pakistan’s average historical success ratio of 1:3.4 wells or 29%,” Faraz Farooq, an analyst at Jahangir Siddiqui Capital Market (JSCM) believed.

Out of the six oil and gas discoveries that occurred during the last fiscal year, 4 discoveries were made by the OGDCL namely Kunar Deep-1, Nim-1, Dars Deep-1 and Bahu-1, which translates into a success rate of 1:5.8 wells on the basis of the 23 exploratory wells drilled by OGDCL in the said year, the results of 15 wells is still being awaited, which will hopefully improve the success ratio.

Although, Pakistan’s rising energy demand presents an excellent opportunity to E&P companies to raise exploration activities and cater to growing energy needs and to realise the potential in their asset portfolio, analysts said that falling short of target in drilling activity might be attributed to various domestic and international reasons.

They said the volatile law and order situation in potential areas with oil and gas had resulted in setbacks and thus hindered the achievement of targets. The increasing cost of drilling equipment particularly due to high prices of rigs in the international market is another factor. “The increase in exploration and drilling activities in various parts of the world are the main reasons for the high prices of drilling equipment and machinery as well as the increased demand for oil and gas experts in other countries”, Abdul Rashid, an analyst at Foundation Securities said.

He said that so far drilling activities had been confined to Pothohar and Indus area whereas the other main oil and gas potential areas like Balochistan and areas of NWFP near the tribal belt could not be accorded priority by E&P companies because of the uncertain law and order situation in these areas. Rashid said that in order to boost exploration and drilling activities especially in the gas sector, the issue of domestic gas prices is a major issue, which prevents oil and gas exploration companies from undertaking more projects. “If the government considers any review on that side in future, it

 

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ISLAMABAD: The demand for IT in the Middle East and Pakistan will increase at a compound annual growth rate (CAGR) of more than 16.9 per cent by 2009, says an international manpower demand survey conducted by the International Data Corporation (IDC), the world’s leading technology media and research.

Unless the networking skills shortage is addressed urgently, in only three years demand for networking skills in Pakistan will exceed supply by 45 per cent in 2009 and there will be a shortage of more than 20,600 skilled people required to help drive economic growth, said Cisco Systems commissioned manpower demand survey for Networking Skills in the Middle East and Pakistan.

In contrast, findings from the same study, carried out across Western and Eastern Europe, expected an average networking skills gap of 11.8 per cent by 2008.

According to the survey, the situation becomes even more alarming when certain technology areas are singled out. For example, the shortfall between supply and demand in advanced networking technology skills (IP telephony, security and wireless) will be 53 per cent in 2009. Again, this is in contrast to findings from Western and Eastern Europe that showed an expected average advanced networking skills gap of 15.8 per cent by 2008.

This has led to the unprecedented demand for general and more advanced networking skills. Insufficient training programmes also compound the situation and increased recruitment from local markets accentuates the need to address the issue through local training schemes. There is also scope for Internet growth in Middle East and Pakistan.

Overwhelmingly 99 per cent of respondents in the region indicated they mostly use the network for email and Internet access. They all indicated that the importance of the networking would increase in the future. The potential for network expansion is therefore very big, requiring significantly more skills to support such an expansion.

Investments in hardware equipment are expected to increase at a CAGR by 19.6 per cent until 2009, while investments in software products will rise by 11.2 per cent and IT services by 10.8 per cent.

To put this in perspective, the Middle East and Pakistan regions are expanding at more than twice the Western European CAGR of 5.8 per cent. The economies of the Middle East and Pakistan are clearly expanding at a very fast rate, and as a result investment in IT is increasing across the board, says the study.

While there are a number of regional initiatives currently underway in Pakistan to promote further training in science and technology, the forecasted gaps highlight the need for more work to be done to provide the right training courses and to encourage student enrolment.

 

[Owais]

BP Pakistan awarded three offshore blocks in Indus Delta
KARACHI (updated on: July 21, 2006, 17:48 PST): BP Pakistan, formerly known as Union Texas Pakistan, on Friday announced that it has been awarded three offshore blocks in Indus Delta.

At a singing ceremony at the Ministry of Petroleum the President BP Pakistan Tariq Khamisani said BP will explore blocks U, V and W covering an area of 21,000 kilometres for oil and gas reserves, with the right to operate any commercially viable discoveries.

"The offshore Indus Delta is a very exciting prospect for us, with a geology that our experience tells us has a strong potential for containing hydrocarbons resources", he said.

He also said any natural gas finds will be used to meet growing demand in Pakistan, which enjoys a sizeable and growing domestic market and a comprehensive distribution infrastructure.