During Prime Minister Imran Khan’s visit to Riyadh next week, the two countries will sign a memorandum of understanding (MoU) for a $500 million loan, as both countries aim to repair bilateral relations that have been strained for a year over disagreements over regional issues.

According to local media sources, Pakistan is expected to share a new oil refinery policy with the kingdom.

Abdul Razak Dawood, Saudi Arabia’s Commerce Adviser, declared two years ago that the country would construct a $5 billion to $7 billion oil refinery, with a deadline of 15 to 18 months to complete feasibility and technical studies. The project, on the other hand, is unaffected.

Read more: PM applauds Saudi Arabia’s peace initiative with Iran

The Petroleum Division had approved a draught oil refinery policy, which would be shared with Saudi Arabia during the prime minister’s visit, according to Tabish Gauhar, Special Assistant to the Prime Minister (SAPM) on Power and PM’s Aide on Petroleum.

“A draught summary has already been circulated for feedback among related ministries. Under the new policy, Saudi Arabia could get a 20-year tax break on investment in an oil refinery,” Gauhar said, adding that the government would not guarantee the internal rate of return on investment, product offtake, or pricing and that investing in an oil refinery would be a commercial decision for Saudi Arabia.

He added that the current five oil refineries would be covered under the new strategy, emphasising the importance of supplying customers with environmentally friendly goods.

Furthermore, the two countries signed a memorandum of understanding on a green partnership, in which existing oil refineries will be required to upgrade their products to Euro-V standards within a new timeframe.

It’s worth noting that customers will be responsible for around 40% of the upgrade costs, while refineries will be responsible for the rest.

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