Reko Diq development remains on course: Barrick

ISLAMABAD: Barrick Gold has assured Pakistan that work on the Reko Diq gold and copper project in Balochistan will continue despite regional tensions.

The Canadian mining company had earlier said it would review the project in light of security conditions linked to the conflict in the Middle East. However, officials said Barrick’s chairman recently visited Pakistan and conveyed that the company intended to proceed with development of the multibillion-dollar venture in Chagai district.

A company delegation also travelled to Pakistan on an official visit to assess security arrangements and procurement planning. The visit is also aimed at the acquisition of advanced equipment and discussions on expanding lending and credit arrangements tied to the project.

Security review and financing discussions

Oil and Gas Development Company Limited Managing Director Ahmed Hayat Lak said a foreign delegation had arrived to examine security measures for the project. He said the review, under an existing agreement, would assess whether further security enhancements were needed and how much additional financing might be required.

Lak said law enforcement agencies were working on steps to ensure smooth implementation of the project. He added that both sides also discussed the purchase of required equipment through a competitive bidding process.

Referring to the project’s financiers, Lak said lenders he met recently in Canada were satisfied with the current arrangements, noting that they had already conducted their own security reviews before providing financing. He also said additional lenders had shown interest in becoming part of the venture.

An official of the Petroleum Division said Petroleum Minister Ali Pervaiz Malik had presented an integrated energy plan to the prime minister. The official said Pakistan had offered oil-producing countries the option to build energy reserves in the country, export oil from those reserves and also use them domestically.

Energy security plans

The Petroleum Division official said 400 million cubic feet per day of liquefied natural gas had returned to the system after previously being curtailed because of surplus imports. The official also said deregulation of petroleum product prices was needed to create a free and competitive market, although the final decision would be made by the prime minister.

On the Iran-Pakistan gas pipeline, the official said progress had stalled because the matter was under arbitration in an international court owing to sanctions-related issues. On the Reko Diq project, the official said: "Work is continuing on the project, but international companies have security concerns, which are being addressed in coordination with the relevant institutions."

The same official said Pakistan needed strategic oil reserves and that the existing policy was under review to improve preparedness for any emergency. He added that studies on establishing such reserves were already available with the government.

Speaking about the broader energy framework, the official said: "We have to ensure energy security."

He said the matter had also been raised with the prime minister, adding that building a sound energy architecture was a complex task. He further said commercial fuel stocks were available with refineries and oil marketing companies.

The official also said domestic consumers would soon receive good news on gas prices. He added that despite the tense situation in the Middle East, Pakistan had managed conditions effectively, with the supply chain remaining stable and facing no disruption. According to the official, three LNG cargoes had recently arrived, one spot cargo had been purchased and a tender had been floated again.