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Pak-Kuwait oil refinery

Efforts on to settle

tax arrangements

KUWAIT: Pakistan and Kuwait, finalising plans to build a refinery in Pakistan, are trying to settle tax arrangements among other issues, Pakistani Petroleum and Natural Resources Minister Anwar Saifullah said on Sunday.

"There are just a few points left to be sorted out. One of the issues is tax," Saifullah, on a three-day visit to Kuwait to discuss the proposed joint venture, told Reuters.

He was expected to meet Kuwaiti Oil Minister Abdul-Mohsen al-Mudej on Sunday afternoon for formal talks on the proposed refinery, which Saifullah said would cost $1 billion to build.

The countries have been studying plans to build a joint venture refinery on the coast west of Karachi for over a year.

Saifullah said the refinery would have a capacity of four to six million tonnes a year (77,000 to 115,000 barrels per day).

"Both sides are very keen to advance this project further," he said. "Both sides realise that there is demand there, because we in Pakistan will need whatever we produce from it."

He said all foreign equipment used on the project could be imported tax free.

"It's a good venture and it's going to be profitable. We are assuring a rate of return of 25 percent on capital invested," he said without elaborating.

Kuwait, seeking to build 400,000 bpd of extra refining capacity in Asia by the year 2000, last year advised Islamabad to make foreign participation more attractive by liberalising what Kuwaiti officials called outdated investment rules.

Kuwait is expected to enter at least one joint venture refinery project in India and is also studying similar projects in Thailand and China.

Kuwait sells Pakistan some two million barrels of oil a year under a four-year term contract that expires in 1996 and owns a 16 percent stake in a production concession in Sindh province.-Reuter