mm-news-@dmin Over 30 international companies have come to Pakistan with the hope of finding oil. But have left due to the high cost and low reward
- Pakistan imports more than 80% of its oil, a drain on state coffers.
- No reliable proof of untapped oil reserves in Pakistan, say experts.
- Some small oil repositories produce about 65,000 barrels a day.
ISLAMABAD: The newfound camaraderie between the US and Pakistan was on full display this week. As US President Donald Trump welcomed Prime Minister Shehbaz Sharif. And Chief of Army Staff (COAS) Field Marshal Asim Munir into the Oval Office. Heralding them both as “great leaders”, The Guardian reported.
Successive US presidents cold-shouldered Pakistan. Washington invited a Pakistani prime minister for the first time in more than six years.
It was also the unprecedented second time this year that COAS Munir held an intimate meeting with President Trump.
Islamabad’s charm offensive with Trump, since his re-election. Has included handing over to the US a high-profile member of the Daesh affiliate in Afghanistan. And publicly crediting the US president with preventing hostilities between India and Pakistan. From escalating into all-out war, to even nominating Trump for the Nobel Peace Prize for his efforts.
Yet what has appeared most effective is Pakistan’s touting of its allegedly untapped natural resources. Namely, oil, minerals, and gas — for US exploration.
In July, Trump wrote on his social media platform, Truth Social. That “we have just concluded a Deal with the Country of Pakistan. Whereby Pakistan and the United States will work together on developing their massive Oil Reserves. We are in the process of choosing the Oil Company that will lead this partnership”.
U.S. Charge d’Affaires in Islamabad Natalie Baker affirmed the message. Telling local media that US firms show keen interest in Pakistan’s oil and gas. And mineral sectors in line with President Donald Trump’s vision.
Pakistan has already reaped rewards from its promise of oil. After an agreement in August, Trump gave Pakistan a generous 19% tariff on imported goods, the lowest. Of all South Asia nations, it is far below the punitive 50% tariffs. That’s its neighbour and nemesis, India, that it is facing.
The US announced a $500m (£370m) deal this month to invest in Pakistan’s nascent minerals sector — including copper and rare earths — despite limited data on the country’s reserves.
Yet it is the promise of oil that has left experts and former government ministers even more baffled. They stress that there is no reliable proof that Pakistan has any substantive, untapped oil reserves, despite years of the world’s biggest oil companies attempting to find them.
Moin Raza Khan, a geoscientist and former managing director at Pakistan Petroleum Limited (PPL), which has been at the forefront of oil exploration, said: “What Trump is claiming about Pakistan’s massive oil reserves has nothing to do with reality. It is without the support of any data or evidence. We don’t even know where these massive reserves would be, as we don’t have any surveys and studies so far that show us”.
Khan and other experts emphasised that after more than half a century of onshore and offshore exploration and drilling, Pakistan has yet to discover large-scale commercially viable oil wells.
Explorers have found some small oil repositories, but they produce only about 65,000 barrels a day. In comparison, Saudi Arabia produces about 4bn barrels a year.
Officials have often proclaimed Pakistan’s potential as a petrostate. The country imports more than 80% of its oil, which is one of the biggest drains on the state coffers, prompting successive leaders to make a push for oil exploration.
Khan emphasised that over the years, more than 30 international companies, including ExxonMobil, had come to Pakistan with the hope of finding oil, but had eventually left due to the high cost and security risk of exploration and low reward.
The US Energy Administration estimated in a 2015 survey that Pakistan’s lower Indus basin could hold 9 billion barrels of “technically recoverable oil,” an assessment recently cited by Minister of State for Petroleum Ali Pervaiz Malik.
However, that survey has been called into question by oil companies. In 2019, the multinational oil corporations ExxonMobil and Eni worked with PPL to find oil and gas reserves offshore. Explorers spent more than $100 million drilling the Kekra-1 Indus G block but found only a waterbed.
Khan, who headed PPL during the recent failed oil exploration, said: “A total of only 1.2bn barrels of oil have been discovered so far —which is nothing — and they are claiming they can find 100 times this in just the next three years”.
“It’s just impossible. There is no magic wand to multiply Pakistan’s reserves.”
Islamabad’s Ministry of Petroleum declined to comment on questions about Pakistan’s oil reserves.
Despite lacking new evidence, Pakistan is pressing ahead with 40 new offshore and 31 onshore oil and gas exploration blocks to be awarded on 31 October. US companies are among those invited to bid.
GA Sabri, a former federal secretary at the Ministry of Petroleum and former Director General of Petroleum Concession, described the claims of massive oil reserves as a “political gimmick” and was sceptical about the success of the oil block auction.
Much of Pakistan’s alleged untapped oil and gas reserves are said to be in the regions of Khyber Pakhtunkhwa and Balochistan.
Sabri said: “When it comes to exploration of new fields, there are high security risks”.
He emphasised that even if the US starts drilling now, completing the exploration will take at least two to three decades and hundreds of millions of dollars, and no one can guarantee that reserves will be found.
Sabri said the success of Pakistan’s onshore oil drilling was nothing short of “a myth”.
