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Parking Saudi crude in Pakistan?
Saudi oil firms may soon get a tax-free place to store oil in Pakistan. Petroleum Minister Ali Pervaiz Malik told Saudi Arabia’s ambassador that Islamabad has approved a tax-neutral bonded policy — benchmarked against Fujairah and Singapore — that would let Saudi companies hold commercial crude reserves in Pakistan with no local tax, hedging transit risk through Hormuz and Bab Al Mandab and easing access into Asian markets, according to a press release. Malik also pitched Pakistan’s refinery upgrade program and a planned storage and refining complex at Hub, Balochistan, as opportunities for Saudi investment.
IN CONTEXT- The Kingdom has been exploring several similar overseas locations to store its crude. Last week, it was in talks with the Philippines to add it to its crude storage network, and Aramco signed an MoU to store Saudi crude in Singapore’s Jurong Rock Caverns starting in 2027, which would become Aramco’s third storage site in Asia after Japan and South Korea.
Arabian Contracting Services buys some time
Outdoor-advertising firm Arabian Contracting Services has rescheduled nearly SAR 1.8 bn of short-term bank debt into medium- and longer-term facilities with Saudi Awwal Bank (SAB), Banque Saudi Fransi (BSF) and Alrajhi Bank, roughly half of its SAR 3.52 bn in credit facilities, according to a Tadawul filing. SAB and Alrajhi stretched 12-month lines out to seven years, each with a one-year grace period and quarterly repayments after; BSF pushed a 360-day facility to 15 months. The company also secured an additional SAR 300 mn (USD 80 mn) facility from SAB.
The rationale: The rescheduling allows Arabian Contracting Services to spread repayments over a longer period that better aligns with its cash flows and the timelines of its long-term projects, while rolling multiple loans into one agreement with each bank. That should take some pressure off near-term repayments and give the company more breathing room to manage its cashflow.
