Massive Oil & Gas Reserves discovered in Pakistan: A potential economic game-changer. In a development that could reshape Pakistan’s economic landscape, a new survey has revealed vast oil and gas reserves in the country’s territorial waters. This discovery, considered one of the largest of its kind, has the potential to transform Pakistan’s energy sector and significantly reduce its dependence on costly imports.
As per the media reports, the extensive three-year survey has confirmed the presence of substantial fossil fuel reserves. If these reserves prove to be primarily natural gas, they could replace Pakistan’s current LNG imports. Conversely, if they turn out to be predominantly oil, the country could reduce its reliance on imported oil. Former Oil and Gas Regulatory Authority (Ogra) member Muhammad Arif highlighted the significance of this finding, noting that the reserves could address Pakistan’s energy needs and alleviate its import burden.
Despite the promising news, experts caution that realizing the full potential of these reserves will require substantial investment and time. Arif pointed out that exploration alone would necessitate around $5 billion, with an additional four to five years needed to extract resources from offshore locations.
Currently, Pakistan meets 29% of its gas, 85% of its oil, 50% of its liquefied petroleum gas (LPG), and 20% of its coal requirements through imports. The country’s total energy import bill reached $17.5 billion in 2023 and is projected to soar to $31 billion within seven years, according to the Economic Times. The discovery of these reserves comes as a significant boon, especially in light of Pakistan’s ongoing economic challenges, including soaring inflation and rising debt.
In recent years, Pakistan’s economy has struggled with high inflation rates, which peaked at nearly 30% in 2023, and sluggish economic growth, which fell short of the 3.5% target. To address these issues, the country has been relying heavily on foreign aid and seeking investments to boost its energy production. Pakistan’s Energy Minister Mohammad Ali has stated that with an investment of $25 billion to $30 billion, the country could extract 10% of its estimated 235 trillion cubic feet (tcf) of gas reserves over the next decade, potentially reversing the current decline in gas production.
The discovery also has regional implications. Estimates suggest that the newly discovered reserves could make Pakistan a major player in the global energy market, as they are believed to be among the largest oil and gas reserves globally. This potential is highlighted by recent developments in neighboring India, where unexplored sedimentary basins are estimated to hold up to 22 billion barrels of oil. However, India’s exploration efforts are still in the early stages, with significant investment opportunities projected in the coming years.
Despite the promising outlook, the immediate response to Pakistan’s discovery has been cautious. International oil and gas companies have been hesitant to invest, with some major players like Shell already selling their stakes in the country. Security concerns have been a major factor, with the cost of maintaining safety for personnel and assets being a significant deterrent. Recent attacks on Chinese projects in Pakistan, including the Dasu dam project and the Gwadar Port Authority complex, have further underscored the security challenges.
As discussions continue with potential investors, particularly Chinese state-owned entities, the future of Pakistan’s energy sector remains uncertain. Nonetheless, the discovery of these massive reserves represents a potential turning point for the country’s economy, offering hope for greater energy independence and economic stability in the years ahead.
