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Friday, 21 September, 2001, 17:35 GMT 18:35 UK
Pakistan investors prepare for trouble
Protest in Karachi
Protests have been growing across Pakistan
Street demonstrations in Pakistan have been growing more frequent in the days since neighbouring Afghanistan emerged as the likely target of any American reprisals for the attacks on New York and the Pentagon.

Multinational firms are reluctant to comment on what security measures they are taking to protect their operations in Pakistan.

"In these circumstances, we're not discussing with anyone what what precautions we've taken, except to say we've taken precautions," said a spokesman for oil and gas giant BP.

BP's operations in Pakistan supply about 10% of the country's gas consumption.

Oil and gas extraction makes up about 8% of Pakistan's gross national product (GDP), according to Aqib Elahi Mehboob, head of Pakistan research at brokerage firm Khadim Ali Shah Bukhari in Karachi.

Sectarian violence

"The biggest risk to foreign firms is not targeted attacks but street demonstrations which get out of hand," according to John Bray, policy director of Control Risks Group, which carries out security assessments for mulitnationals.

Mr Mehboob thinks the oil and gas sector is unlikely to become the target of protesters angered by the decision of Pakistan's leader, General Musharraf, to offer support to the American military.

"The main threat is sectarian violence or violence by (Afghan) refugees here and that... is more likely to be aimed at the cities to get a more political message across," he said.

In recent days, protesters have rallied outside the US embassy in Karachi and held demonstrations in the northwestern city of Peshawar, near the Afghan border.

"The radical Muslims are a very small proportion of the population but they have a lot of street power, that's the dilemma for everybody," said Mr Bray.

Gulf operations

The list of foreign firms in Pakistan includes Shell - which also refused to comment - chemicals giant ICI, oil explorer Lasmo, US banking firm Citigroup and BG, the former British Gas.

Many of them also have operations in the Gulf, where US and British forces are gathering, and elsewhere in the Middle East.

"Some companies have asked their foreign staff to leave (Pakistan)," according to Mr Mehboob.

British Airways confirmed the Foreign Office had chartered a Boeing 747 jumbo jet to fly foreign nationals out of Islamabad.

Business as usual?

BG has a 63.33% stake in the Indus C offshore licence. "We're not undertaking any travel out there," a BG spokeswoman said, adding that there is currently no activity on the licence as the firm is checking the results of a seismic survey.

BG also has two offshore developments in Egypt, where it is developing a gas distribution network and is in talks with the Egyptian authorities to begin a liquified natural gas (LNG) business.

"At the moment, with the Egyptian authorities it's business as usual," the spokeswoman said.

Citigroup also insists it is "business as usual" for its operations in Pakistan, where it has retail banks and throughout the Middle East. It has corporate and investment banking operations in Bahrain and Israel, as well as businesses in Jordan, Saudi Arabia, Iran and the United Arab Emirates.

A spokeswoman said the bank was taking precautions to protect its staff and "focused on maintaining access to our services". She declined to comment on the impact of the political tension on the bank's business.

Some companies, such as ICI Pakistan and Australian bank ANZ Grindlays, may even be perceived as local brands, benefitting from being in the country for a long time or hiring local managers, according to Mr Bray.

ICI Pakistan, in which the UK group has a 75% stake, is managed by local staff, according to a London-based spokesman. The firm has a facility in Karachi and makes polyester fibre and ingredients for detergent and paints.

See also:

17 Sep 01 | South Asia
On edge: Afghanistan's neighbours
18 Sep 01 | South Asia
Karachi protest against US
18 Sep 01 | South Asia
Analysis: Pakistan's tough choice
19 Sep 01 | South Asia
Bomb blast in Pakistan
20 Sep 01 | South Asia
Pakistan militants step up protests
19 Sep 01 | Business
Pakistan exchanges stay closed
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