Pakistan State Oil (PSO) will utilise traders and clients of the State Oil Company of Azerbaijan Republic (SOCAR) in Singapore until the joint international trading company’s infrastructure is fully established, according to a news report. The initiative is expected to help PSO gain access to international markets and reduce foreign exchange outflows, benefiting the Government of Pakistan.
During a Federal Cabinet meeting on February 18, 2025, officials were briefed on the collaboration between PSO and SOCAR, which involves setting up an international trading company in Singapore.
The PSO Board approved the company’s incorporation on April 28, 2022, and also obtained legal guidance regarding the move. The Economic Coordination Committee (ECC) was subsequently approached on February 14, 2025, to approve the establishment of the joint trading company.
The Petroleum Division informed the ECC that the initiative would enable PSO to secure competitive oil pricing by leveraging SOCAR’s experience in international markets. It was clarified that the current request was solely for company incorporation, with no immediate equity injection involved. The ECC directed the Finance Division to verify whether there were any restrictions on foreign exchange allocations under its jurisdiction.
Regarding risk management and governance, PSO assured the forum that local professionals would be hired for operational functions while a strict compliance framework would be implemented. Until the joint venture becomes fully operational, PSO will rely on SOCAR’s traders and clients.
The ECC also instructed the Petroleum Division to conduct a thorough due diligence process to determine the approval requirements related to foreign exchange cover and other necessary authorizations. Additionally, the Petroleum Division was asked to provide a clear timeline for the company’s operational launch.
