US President Donald Trump’s statement that his country has struck a deal with Pakistan to tap the latter’s oil reserves will be the first high-level move to verify Islamabad’s claims of possessing large oil deposits along its coast.
Pakistan’s Finance Minister Mohammad Aurangzeb is in Washington but it is still unclear whether the countries have signed a deal in this regard. That begs the question: Is Pakistan rich in oil, and if yes, why has no one rushed to drill it yet?
Available data state Pakistan holds 353,500,000 barrels of proven oil reserves, as of 2016. This accounts for about 0.021% of the world's total oil reserves. But, last September, Pakistani officials claimed they discovered potentially massive oil and gas reserves.
Pakistan’s Oil and Gas Regulatory Authority said it conducted a three-year survey in partnership with an allied nation to verify the presence of the oil and gas reserves. The geographic survey helped pinpoint the location of the deposits, following which the government was briefed about the findings. Some projections rank this discovery as the world’s fourth-largest in terms of oil and gas reserves.
Subsequently, Pakistan claimed to have made three gas discoveries in the Kohat Plateau of Khyber Pakhtunkhwa and Kharo in Sindh. It also declared a huge reserve in Khyber Pakhtunkhwa province's Lakki Marwat, wherein gas and condensate reserves were found with an initial production of 2.114 million cubic feet of gas and 74 barrels of crude oil per day.
It also claims substantial oil and gas reserves in Attock, Punjab.
However, tall claims aside, experts caution that exploitation of these reserves will take years and significant investment, possibly to the tune of $5 billion and four to five years for extraction.
As for gas reserves, the country’s former Energy Minister and advisor to the PM, Mohammad Ali claims Pakistan has 235 trillion cubic feet (tcf) of gas reserves, and an investment of $25 billion to $30 billion would be required to extract 10% of those reserves over the next decade.
Besides the high costs incurred for the same, the security situation in the state and unstable government meant no oil company was rushing to exploit the reserves yet.
However, in early April, Islamabad signed an agreement with Turkey's state-owned Turkish Petroleum Corporation (TPAO) to collaborate on offshore oil and gas exploration in Pakistan.