Pakistan-Soviet Oil Agreement The Pakistan Times. Lahore. March 23, 1961

The signing of the Pakistan-USSR agreement on oil exploration on 4th March, 1961 has, it seems, attracted attention throughout Pakistan and, perhaps, somewhat beyond. This attention is understandable as oil forms or, at least, ought to form, a basic element of a flourishing economy. It is an important artery of the international market; so important indeed that on occasions its distribution, ownership and prices have been fraught with far-reaching implications.

It is now fully understood that the Government of Pakistan is straining every nerve towards developing Pakistan on a viable and scientific economic structure in order to raise the living standard of its people and to bring strength and comfort to this land of 100 million people. Having recognized the fact that the country cannot develop itself economically without the maximum exploitation of all its resources—visible and hidden—the Government began the task of mobilizing its energies on an emergency basis. The first step in this direction was the creation of a separate Ministry of Fuel, Power and Natural Resources in April, 1960. This Ministry was entrusted, among other things, with the task of mineral exploration; oil having the highest priority.

The Ministry undertook a searching study of the oil situation in the country and found that the Government on its part had contributed a total sum of Rs. 114.5 million (excluding taxation reliefs) towards the prospecting of oil under an arrangement with various foreign oil companies which have been given exploration licenses. Considering the huge amount spent on this venture, results were not altogether encouraging. No doubt, since the inception of Pakistan natural gas has been discovered in substantial quantity but this in itself could not be considered a major contributory factor in the struggle for raising the economic level of the country.

The discovery of gas has been helpful; but we discovered it in our search for oil. So, as far as oil is concerned, all our endeavors thus far have not been encouraging. What made the prospects more discouraging was the growing belief among the prospecting companies that the chances of striking oil in Pakistan were getting dimmer and dimmer.

The stalemate had to be broken. It was about time that some competition, some intensification of activity was infused to make a final bid for the discovery of oil. Pakistan is regarded to be within the oil belt. It would, therefore, be a cruel act of fate if this country was to be an exception. To laymen and to some experts it seems that there is oil in our country, but so far its discovery has eluded us. The only way now open is to introduce competition. Only after competition can the Government feel satisfied that all possible efforts have been made to strike oil but that, in spite of searching everywhere and through every means and process known and available, we could not find oil. We would then have the satisfaction of knowing that we spared no effort in trying to find this valuable commodity which at present is consuming a handsome portion of our valuable foreign exchange every year, with its inevitable increase as the development plans get into their stride.

It is against this background of saving valuable and hard-earned foreign exchange and to give a fillip to the execution of our development plans that the oil agreement has been signed with the Soviet Union.

The Soviet offer to assist Pakistan in the exploration of oil was made in 1959 and it was in August, 1960, that the Government of Pakistan decided to pursue the Soviet offer. A delegation of Soviet experts visited Pakistan in September-October of 1960 to assess our requirements of oil. After examining and discussing the data supplied by Pakistani experts, the Soviet team recommended a programme of work for oil exploration to be financed through a long-term loan to be given by the Soviet Government and executed with the help of Soviet experts.

On 12th December, 1960 the Government of Pakistan decided to send a delegation under my leadership to the U.S.S.R. to negotiate an agreement in respect of oil exploration.

The following day, 13th December, the delegation left for New Delhi en route to Moscow. We were told there that our plane had been delayed for a day. In New Delhi the Soviet Ambassador and his wife entertained the delegation to lunch.

We took off from New Delhi on the 16th and were to land at Tashkent before going on to Moscow, but at Tashkent the weather was so bad that it was impossible for our plane to land safely. Since we were to visit Samarkand as well, the Soviet authorities diverted the aircraft to that historic town. This was an appreciable gesture on their part as it was a departure from their normal practice of not allowing foreign planes to land at the military airport of Samarkand.

We spent an unforgettable day in Samarkand, visiting its famous historical monuments and mosques. The grandeur of Islamic architecture and culture so richly visible in this citadel of the great Timur and his descendants was truly impressive. It made one feel proud to be a part of its history, race and religion—separated by time and political and physical change, bound by indefinable but lasting bonds which held together despite the high mountains, the different languages and ideologies that come between Samarkand’s past and Pakistan’s present. To find an unmistakable affinity in the midst of this gulf is to know how abiding is Islam’s heritage. The following day we motored to Tashkent. On our way we saw agricultural farms in the environs of this great city and were greatly impressed by the activity on those farms. In Tashkent we were given a very warm reception and were pleased to meet many high officials and various Muslim religious leaders. We also offered prayers at the famous Tashkent Jamia Masjid.

We arrived in Moscow on 19th December. Among those who received us at the airport were the Soviet Minister for Foreign Trade and Geology, other Soviet officials and our Ambassador to the USSR.

Formal negotiations began in the Kremlin on 20th December and this was our first contact with the Soviet officials. It was indeed a pleasant experience for us as talks went on in a very cordial atmosphere. On the night of 31st December, I was invited to a reception in the Kremlin at which I met Mr. Nikita Khrushchev again, having first met him at the United Nations General Assembly. The Premier was in great form and proposed a number of toasts. At this reception, I also met other important leaders of the Soviet Union. On previous occasions I had had meetings with Mr. Mikoyan, Deputy Premier, in connection with our talks and found him exceedingly cordial and understanding.

Later, I had another opportunity to talk to Mr. Khrushchev across the table in the Kremlin but on this occasion our talks were confined to the oil negotiations. Among other social functions which the delegation attended in Moscow were a visit to the famous ballet, a reception by the Pakistan Embassy and a dinner by Mr. Mikoyan.

Final touches to the agreement were given by us in Rawalpindi. The oil agreement provides, inter alia, for a Soviet credit to Pakistan of 120 million roubles repayable over a period of 12 years. The Soviet Union will supply experienced experts and 75 percent of the credit will be in the form of equipment which will be available to Pakistan even after the completion of the oil exploration programme. Pakistani experts will also be trained.

This agreement is the first of its kind between the USSR and Pakistan and has been brought about after careful and painstaking negotiations conducted in an atmosphere of goodwill and cordiality. It is one of the great manifestations of the spirit of the present age which calls for the widest possible international cooperation to the mutual benefit of mankind rising above political prejudices and barriers of creed or ideology.