Recent statements by former US President Donald Trump have ignited a fresh wave of excitement in Pakistan regarding the discovery of “massive oil reserves”. Trump’s declaration, made in conjunction with imposing tariffs on India and speaking of a new US-Pakistan deal, suggested a partnership to develop these reserves, even hinting that Pakistan might someday sell oil to India. This has been met with profound thanks from Pakistani Prime Minister Shehbaz Sharif and optimism from Finance Minister Muhammad Aurang, who sees a US-Pakistan trade deal nearing completion. However, beneath the political fanfare lies a decades-long “fantasy” of vast oil finds that has largely remained unfulfilled.
A Persistent Search for Black Gold
The belief in Pakistan’s massive oil potential dates back to 1915 when a small amount of oil was found in a Punjab village. Since then, there has been a recurring announcement, often without definitive evidence, of the discovery of some of the world’s largest oil and gas reserves either onshore or within Pakistan’s territorial waters.
While Pakistan does possess the significant Sui gas field, discovered in 1952, which has provided piped gas to Pakistani homes for a long time, it remains primarily a gas field. Despite this, Pakistan, much like India, imports over 80% of its energy needs. Current daily oil imports for Pakistan range from 2 to 3 lakh barrels, a stark contrast to India’s 5.3 million barrels per day.
The Reality of Reserves vs. Grand Claims
The official estimates for Pakistan’s proven oil reserves stand at approximately 0.2 billion barrels. To put this in perspective:
- India’s estimated reserves are about 4.9 billion barrels.
- The United States, with the eighth largest reserves, holds an estimated 44.4 billion barrels.
- Venezuela, with the world’s largest reserves, boasts an estimated 303 billion barrels.
This significant disparity highlights the gap between aspiration and reality. The “fantasy” is partly driven by a belief that, similar to Saudi Arabia, Pakistan as one of only two states founded on the ‘kalma’ (the other being the original Medina/Saudi Arabia) must also be blessed with abundant oil and minerals. This was evident in Imran Khan’s 2019 claim of finding Asia’s largest oil and gas reserves in Pakistan, a claim subsequently denied by his own petroleum ministry due to lack of evidence.
Foreign firms Pull Out Instead of Investing
No matter the optimism, the practical situations on the ground for oil exploration in Pakistan will remain hard. Confirmed oil reserves are considered ‘very dodgy’ because, mostly, it’s kept as “strategic secret”. Pakistan’s Oil and Gas Development Corporation (OGDC) said that they raised there estimation of exploitable oil in 2024 by 23%. Even so, they still put the total amount at about 238 million barrels, which is close to “massive”.
Adding to the skepticism is the trend of foreign companies exiting Pakistan’s energy sector:
- ENI, an Italian company, exited Pakistan in March 2021.
- Shell sold 77% equity in a joint venture to Saudi Aramco.
- The French company TotalEnergies also exited in August 2024, selling its shareholding.
- A 2023 auction of 18 oil and gas blocks saw a “muted response,” with no international bids for 15 of them.
- A major, much-celebrated exploration effort at a site called Kra 1 off Karachi, where the American company Exxon spent over $100 billion, was given up after 17 digging attempts reached 5,500 meters without finding anything.
In fact, in July 2024, Pakistan’s Oil Minister Musadiq told a parliamentary committee that no foreign company was interested in exploring for oil and gas in Pakistan, with existing ones in “exit mode,” largely due to security concerns impacting employee and asset protection. Negotiations then reportedly began with two Chinese companies.
Trump’s “Trolling” and India’s Hyphenation Concern
- Donald Trump’s announcement appears to be a calculated move. He is known for “trolling” friends and allies to achieve his aims. In this context, his statements about Pakistan’s oil serve a dual purpose:
Seeking a Deal with India: Trump wants to close a trade deal with India and extract a “thank you note” for his role in peace efforts, despite India denying any such mediation. - Irritating India: Trump understands that nothing will irritate India more than an American-Pakistani partnership or his seeming to elevate Pakistan to the same level as India a concept known in India’s dictionary as “hyphenation”. The imposition of a 19% tariff on Pakistan, lower than the 25% on India, further amplifies this message.
The recent excitement in Pakistan was probably placed into overdrive by an article in Dawn in September 2024, attributing to an unnamed “highly ranked national security source” who stated that, after three years of “searching” with an “allied power,” evidence of the fourth largest oil and gas reserves in the world had been uncovered in Pakistan’s coastline. However, on a follow-up article in Dawn Sadd Rashid Dusen pointed out that there had been no rush of investments, and in his was dubious about the article’s claims. A former top executive and analyst, Yufu Nazer, also highlighted that the 1952 Sui gas field remains Pakistan’s most important find, reinforcing the 0.2 billion barrel oil estimate and suggesting that many estimations are based on “political estimates and politicization” rather than drilling evidence. While there is talk of untapped shale gas, it presents significant technical and economic challenges.
In conclusion, while optimism for oil discovery is natural, the consistent discrepancy between grand claims and actual proven reserves raises questions about whether Pakistan and its political partners are finding crude oil or, as some suggest, “snake oil”. The long-standing “fantasy” of oil riches in Pakistan continues to play a significant role in its geopolitical narratives, particularly as a tool in regional diplomacy
Frequently Asked Questions:
1. Does Pakistan have large oil reserves?
Pakistan’s proven oil reserves are around 0.2 billion barrels far smaller than global oil giants like Venezuela or even India.
2. Why are foreign companies exiting Pakistan’s energy sector?
Security concerns, poor returns, and unproven reserves have pushed companies like ENI, Shell, and TotalEnergies to exit.
3. What was Donald Trump’s role in the recent oil discovery buzz?
Trump’s statements on “massive reserves” in Pakistan appear more like political maneuvering, aiming to influence US-India-Pakistan dynamics.
