Pakistan's Oil Promises to the US: Reality vs. Hype

The visit of Pakistani Prime Minister Shehbaz Sharif and Army Chief Asim Munir to the Oval Office has marked a significant shift in bilateral relations between the US and Pakistan. Islamabad's charm offensive, which included handing over a high-profile member of Islamic State's affiliate in Afghanistan, publicly crediting the US president with preventing hostilities between India and Pakistan, and nominating Trump for the Nobel peace prize, appears to have paid off. Pakistan's promise of significant oil reserves has been particularly effective in drawing the US into a partnership. However, experts and former government ministers are skeptical about the reality of Pakistan's oil reserves, citing a lack of reliable evidence and data.

Key Takeaways:

• Despite years of oil exploration, no large-scale commercially viable oil wells have been discovered on Pakistani soil, producing only about 65,000 barrels a day.
• International oil companies, including Total, Shell, and ExxonMobil, have come to Pakistan with the hope of finding oil but have eventually left due to the high cost, security risks, and low reward.
• A 2015 survey by the US energy administration estimated 9 billion barrels of "technically recoverable oil" in the lower Indus basin, but this has been called into question by oil companies.
• Islamabad's ministry of petroleum has declined to comment on questions about Pakistan's oil reserves.
• The country is pressing ahead with 40 new offshore and 31 onshore blocks for oil and gas exploration, which will be awarded on October 31, with US companies invited for bidding.

Statistics:

• Pakistan imports more than 80% of its oil, which is one of the biggest drains on the state coffers.
• Only 1.2 billion barrels of oil have been discovered so far, with no reliable data on the country's substantive, untapped oil reserves.
• Schneider's Truth Social, "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."
• Pakistan will import US goods with a 19% tariff, a generous rate compared to other South Asian countries.
• $500m (APS370m) deal for the US to invest in Pakistan's nascent minerals sector, including copper and rare earths.
• Kekra-1 Indus G block drilling cost more than $100 million without finding any oil or gas.

Sources:

• The Guardian
• Truth Social (Donald Trump's social media platform)
• Pakistani Government (Ministry of Petroleum)
• Natalie Baker, the US Charge d'Affaires in Islamabad