Uncovering Pakistan’s Oil Potential: Hype Or Hidden Treasure?

The discovery of oil has transformed the fortunes of many countries. Arab nations turned deserts into wealth. Norway became one of the richest countries, while others, like Venezuela, failed to capitalise on their oil reserves despite vast resources.

Oil and gas, being fossil fuels, can be found anywhere—deserts, mountains, or oceans.

As the saying goes, “Those who search, find.”

However, in many areas, extracting oil proves uneconomical, demanding substantial effort and investment.

Saudi Arabia, for instance, faced numerous failures before striking oil with an American company’s persistence. So, it’s entirely possible that Pakistan could uncover more oil than its current known reserves.

According to available data, Pakistan has approximately 350 million barrels of oil reserves (compared to India’s over 4.8 billion barrels, more than ten times higher).

Despite these resources, Pakistan relies heavily on imports for several reasons:

• Low production from existing reserves,
• High domestic demand,
• Cheaper imported oil, and
• The location of many resources in sensitive regions like Balochistan and Khyber Pakhtunkhwa

In terms of natural gas and shale oil, Pakistan has significant potential, ranking among the top 20 countries globally with an estimated 100 trillion cubic feet of shale gas.

However, extracting these resources, trapped deep in rocks, requires advanced technology and massive investment, a challenge even for countries like the US.

Additionally, these resources lie scattered across Balochistan, Sindh, and Khyber Pakhtunkhwa, while importing LNG still proves more cost-effective for now.

[The Kutch region, largely in India with a small part in Pakistan, could be a potential oil source, but it isn’t currently significant for Pakistan.]

Are Foreign Companies Interested in Investing in Pakistan’s Oil and Gas Sector?

Pakistan lacks the financial capacity to develop its resources independently, making foreign investment essential.

Over the decades, several companies have explored opportunities in Pakistan, but many have withdrawn in recent years.

For instance, Shell scaled back its investments, Kuwait’s energy company pulled out last year, Italy’s ENI left four years ago, and TotalEnergies recently exited as well.

ExxonMobil has conducted drilling intermittently, but its last attempt (Kekra-1 in 2019) yielded no significant oil or gas, with only water found after a $124 billion investment and a mere 12% chance of success.

These withdrawals stem from challenges like outdated infrastructure, declining indigenous reserves, and high extraction costs.

Adede with the security concerns in regions like Balochistan, and political instability, which make investments risky.

Additionally, some experts and critics, including Baloch leaders, argue that claims of vast oil reserves, particularly in Balochistan, are exaggerated or politically motivated to attract foreign investment or divert attention from economic crises.

Despite these setbacks, recent claims suggest potential. A 2024 survey by Pakistan’s Oil and Gas Regulatory Authority (OGRA), conducted with an unnamed partner country, reported a major oil and gas discovery in Pakistan’s maritime waters. The find was touted as the world’s fourth-largest reserve.

However, extracting these reserves could take 4-5 years and require over $5 billion in investment, with no immediate economic relief.

Earlier claims, like those by former PM Imran Khan in 2019 about massive offshore reserves near Karachi, have often criticised as overstated to lure investors.

Recent announcements, such as US President Donald Trump’s 2025 statement about a US-Pakistan deal to develop ‘massive oil reserves’, have reignited speculation.

A 2020 joint study by Pakistan’s Energy Ministry and USAID estimated 3778 trillion cubic feet of free gas in place, with 188 TCF technically recoverable, but these figures remain unproven.

Critics argue these claims may be more about geopolitical strategy or attracting investment than grounded in reality.

Is India’s Situation Better?

It’s best to leave this question unanswered for now, as India, despite listing larger reserves on paper, still imports more oil than it produces. Both countries face similar challenges in achieving energy self-sufficiency.

Though India’s larger resource base and more stable investment climate give it an edge. Continuous efforts in exploration and development are crucial for both nations, as energy independence is a strategic imperative.

Whether the resources come from deep underground or the skies above.

In summary, Pakistan has modest oil reserves and significant shale gas potential. However, economic, technical, and geopolitical challenges limit their exploitation.

Foreign companies have shown interest but are cautious due to high risks and costs, with many exiting in recent years.

Claims of vast reserves often appear exaggerated, and unlocking their potential requires significant investment and time.