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Jan 22 - 28, 2001

Offshore drilling policy announced

The federal cabinet has decided that the companies, investing in the offshore exploration, will not be required to share revenues from the oil and gas production, with the government till the recovery of their cost.

The package of incentives for offshore exploration of oil and gas, approved by the cabinet on Wednesday, provided that the investors would initially recover cost (subject to recovery limit of 85 per cent) and thereafter share revenues from oil and gas production with the government.

This package would be available to all new as well as existing licence holders for a period of five years.

Instead of flat 12.5 per cent royalty, a sliding scale royalty with a holiday of initial four years, was introduced. The corporate income tax was also reduced from 50 per cent to 40 per cent of the profits. Import duties and taxes would be zero for exploration and after the first commercial discovery the same would be three per cent.

In order to promote the exploration in ultra deep water, the offshore areas were divided into three zones shallow, deep and ultra-deep, for which following profit rates on oil/gas split was offered:

a) Shallow Zone is the offshore area covered by well in shallower than 4000 meters and in less than 200 meters water depth and government's profit oil/gas share varies from 10 per cent to 80 per cent based on the accumulated production from a field.

b) Deep zone is the offshore area covered by well in deeper than 4000 meters and/or in over 200 meters and less than 1000 meters water depth for which government's profit on oil/gas share varies from five per cent to 70 per cent based on the accumulated production from a field.

c) Ultra-Deep Zone is the offshore area covered by over 1000 meters water depth for which government's profit oil/gas share varies from five per cent to 60 per cent based on the accumulated production from a field.

9 million phutti bales make way into ginneries

Although, phutti arrival from fields into ginneries remained slightly higher than the corresponding period of last year but forthrightly flow (Jan 1 to 15) tapered further giving strong indication that lesser crop has been left in fields for third picking.

According figures released by Pakistan Cotton Ginners Association (PCGA) phutti arrival up to Jan 15, stood at 9.003 million bales or 3.28 per cent higher than a corresponding period of last year when production stood at 8.717 million bales.

During the out-going fortnight (Jan 1 to 15) there had been steep fall in arrival of phutti at 402,427 bales compared to 515,057 bales recorded during the same period last year. This indicates that lesser phutti has been left in the fields for third and final picking.

However, cotton analysts continue to question the crop size and are of a firm believe that it would not be larger than the last year's when spinners with connivance of ginners "whisked away" one million bales for evading sales tax.

Sugar output

The existing gap between annual sugar production and consumption for this year has widen by 1.0 million tons due to expected diversion of 17 million of sugarcane to the gur making industry.

According to the Agriculture Ministry, because of increased production of gur, which is in great demand in Afghanistan and the Central Asian Republics, the country will be required to import 1 million tons of sugar to meet its annual needs against the earlier projection of 300,000 tons.

LCs for the import of 1.0 million tons sugar have been opened with the State Bank of Pakistan upto December 15, out of which 0.571 million has already arrived in the country.

The huge gap between sugar demand and production was reported by the Agriculture Ministry in a report submitted to the Economic Co-ordination Committee's sub-committee on sugar.

POF offers ventures

The business community of Islamic countries have been invited to utilize surplus capacities of Pakistan Ordnance Factories and enter into joint ventures for manufacturing defence related articles.

Lt Gen Abdul Qayyum on Tuesday said that as part of the programme of the public sector to invite the business community to get involved in the production of defence items in technical collaboration with POF, the same could be carried out with Islamic countries through the ICCI.

CNG conversion at high speed

With no apparent let up in the price-spiral of petroleum, vehicle owners are making a beeline at more than 15 gas stations in the city, for a switch over from petrol to gas, which will provide them with around 50 per cent saving on fuel cost.

Oil marketing companies (OMCs) quote figures from 25 to 30 vehicles and even 70 vehicles visiting gas stations daily for the installation of compressed natural gas (CNG) kits. On an average about 5,000 to 7,000 vehicles, all over the country, in a month are reported to be converting to gas fuel.

SMEDA signs MoU

Small and Medium Enterprise Development Authority (SMEDA) on Tuesday signed an MoU with G77-Trade Information Network's (TIN) to make an effective exposure of local SMEs in the global market.

The MoU was signed SMEDA chief executive Iqbal Mustafa and G77 Chamber of Commerce and Industry official Dr William Tiga Tita, who is chairman of Global Management Consortium-TIN.

Car plant in Sujawal

Dewan Farooqui Motors Limited (DFML) on Monday commissioned its plant II at factory site in Sujawal, Thatta, for the manufacturing of Hyundai and Kia vehicles.

The plant is equipped with body shop that utilizes welding equipment with latest automatic jigs and fixtures, paint shop with robots supplied by Durr-Behr Germany.