A national daily reported that Wood was meant to get $25 million for the refinery expansion and upgrade project (REUP), but the payment couldn’t be made for a while because there weren’t enough cash in the country.
The contract is recorded with the central bank for payment to a foreign company, and after the local business puts the money in the bank, the payment is made via the central bank.
Dollar scarcity is to blame for the front-end engineering design (FEED) contractor from the UK not being paid on time. The payment lag to PRL management’s UK contractor has also been confirmed. According to Zahid Mir, CEO of PRL, “Yes, there is a delay in contract payment.”
Additionally, he said that the contractor was in communication with the Pakistani government through the British High Commission in Pakistan, thus efforts were already being made to find a solution. He hoped that things will get settled shortly.
Relevantly, the deal was inked in May of last year after PRL chose Wood Group to serve as the FEED contractor for the refinery expansion and improvement project.
Pakistan has been following an energy strategy that encourages local refineries to increase and enhance their capacity for processing crude in order to lessen the nation’s reliance on imported petroleum products and preserve the country’s priceless foreign exchange reserves.
As a result, the progress that is highlighted would reinforce and expand the synergies between Pakistan State Oil (PSO) and PRL. By lowering imports, the project would also benefit the nation’s balance of payments. The capacity of PRL’s refinery will be improved from hydro skimming to deep conversion, and its daily capacity for processing oil will increase from 50,000 to 100,000 barrels.
