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The announcement of a US-Pakistan oil deal by former President Donald Trump has raised eyebrows and sparked considerable skepticism among experts. The crux of the issue lies in the veracity and extent of Pakistan's purported oil reserves, which, according to available data and historical exploration efforts, are significantly less substantial than the pronouncements might suggest. The article highlights the inherent ambiguity surrounding reported 'proven oil reserves,' noting that these figures are often susceptible to manipulation and inconsistent reporting practices. This inherent unreliability casts a shadow over the entire premise of the deal, prompting questions about the motives and underlying rationale behind it. Pakistan, traditionally a major importer of petroleum products, has a history of unsuccessful offshore exploration ventures. The country's estimated recoverable conventional crude oil reserves, ranging between 234 million and 353 million barrels, place it around the 50th position globally. This translates to a mere 0.021% of the world's total oil reserves, a figure that pales in comparison to other major oil-consuming nations like India. India, the world's third-largest crude oil consumer, boasts approximately 4.9 billion barrels of oil reserves, positioning it among the top 25 globally and accounting for roughly 0.29% of the global total. The stark contrast between Pakistan's and India's oil reserve positions underscores the disparity and raises concerns about the feasibility and economic viability of a large-scale US-Pakistan oil development project. The comments of former Indian high commissioner to Pakistan, G Parthasarathy, further fuel the skepticism, suggesting that the deal may be a strategic maneuver aimed at exerting pressure on India. Parthasarathy insinuates a potential collaboration between the US, China, and Pakistan to 'blackmail' India, questioning why China, a nation known for its strategic resource acquisition, would not have already capitalized on significant oil reserves in Pakistan if they indeed existed. This political dimension adds another layer of complexity to the situation, highlighting the geopolitical considerations that may be intertwined with the economic aspects of the deal. Islamabad's portrayal of the US-Pak deal as a symbol of a broader partnership with Washington, as acknowledged by Finance Minister Muhammad Aurangzeb, reinforces the notion that the agreement extends beyond mere oil exploration and development. The United States has expressed concerns about Pakistan's growing dependence on China and views the oil deal as a potential means to wean Pakistan away from this reliance. As a nuclear-armed nation with a population of 240 million, Pakistan's geopolitical alignment carries significant weight, making it a strategic target for both the US and China. The article also touches upon the potential for shale oil extraction in Pakistan, referencing a 2015 study by the US Energy Information Administration that estimated a technically recoverable shale oil resource of 9.1 billion barrels. However, the development of shale oil extraction in Pakistan remains largely unexplored, and the actual feasibility of extracting these resources is yet to be determined. Santanu Saikia, editor of Indianpetroplus.com, emphasizes that Pakistan's oil and gas discoveries are still unconfirmed, with seismic surveys only indicating 'prognosticate reserves' that require validation through exploration wells. Saikia cautions that the entire process, from exploration to actual oil and gas flow, could take up to a decade. This timeline underscores the long-term nature of the project and the inherent uncertainties involved. Oil constitutes Pakistan's largest import item, accounting for approximately $11.3 billion in the year ending June 30, 2025, and representing nearly a fifth of its total import bill. Reducing this import dependence is a key economic objective for Pakistan, and the potential for domestic oil production holds significant appeal. However, the article highlights the tendency of politicians to exaggerate oil discoveries to bolster their vote bank, particularly referencing former Prime Minister Imran Khan's 2019 announcement of a 'possible massive find' offshore, which was later debunked by Pakistan's Petroleum Division. The Karachi-based Dawn newspaper reported in 2024 that ExxonMobil, ENI, Pakistan Petroleum Limited, and Oil & Gas Development Company Limited had drilled beyond 5,500 meters without finding oil or gas reserves, leading to the abandonment of the drilling work. The departure of major oil companies such as Total, Shell, and Eni from Pakistan, citing security concerns as a major factor, further underscores the challenges and risks associated with oil exploration and development in the country. The article also points out that much of Pakistan's oil reserves are located in the restive Balochistan province, a resource-rich region plagued by conflict and instability, posing significant security challenges for any large-scale oil development project. Despite the numerous challenges and uncertainties, some analysts see potential benefits in a US-Pakistan energy alliance. Piyush Pandey suggests that such an alliance could act as a catalyst for Pakistan's energy independence, infrastructure development, and industrial growth. If Pakistan were to become a net energy exporter, even modestly, or reduce its import burden, it could improve its trade deficit. Pandey also suggests that this development could prompt India to accelerate its own exploration efforts in marginal and offshore blocks. He further warns that India could face pricing pressure in South Asia LNG or refined product markets if Pakistan begins exporting downstream products or negotiating energy transit routes.
The potential ramifications of this US-Pakistan oil deal, therefore, extend beyond the immediate economic considerations, encompassing geopolitical strategies, energy security dynamics, and regional power balances. The skepticism surrounding the deal stems from a combination of factors, including the dubious nature of Pakistan's oil reserves, the country's history of unsuccessful exploration attempts, security concerns in key oil-rich regions, and the potential for political manipulation and exaggeration. While some analysts see potential benefits in a US-Pakistan energy alliance, the numerous challenges and uncertainties surrounding the project warrant a cautious and critical assessment. The success of the deal hinges on overcoming these obstacles and ensuring that the underlying assumptions and projections are grounded in reality rather than political expediency. The article effectively portrays the complexities and nuances of this situation, highlighting the interplay of economic, political, and strategic factors that shape the energy landscape of South Asia. It underscores the need for careful scrutiny and informed decision-making in the pursuit of energy security and regional stability.
In summary, the article paints a picture of a highly speculative oil deal between the US and Pakistan, predicated on potentially overstated oil reserves and driven by a complex web of geopolitical considerations. The deal's success is far from guaranteed and faces significant hurdles related to security, infrastructure, and the inherent geological challenges of oil exploration in Pakistan. The long-term implications of this deal, both for Pakistan's energy independence and the regional balance of power, remain to be seen.
Source: Why Trump’s oil deal with Pakistan has experts stumped