- Pakistan has found a major oil and gas reserve that could transform its economy, pending further assessment and investment.
- The country is seeking $4 billion in loans and plans $20 billion in foreign borrowing to address economic challenges.
At a moment when Pakistan is precariously poised on the verge of economic collapse, a newfound glimmer of hope has emerged. The nation has discovered a significant reservoir of petroleum and natural gas within its territorial waters. This find is believed to be of such magnitude that it could potentially transform the country’s future trajectory. According to DawnNewsTV, the discovery follows a comprehensive three-year survey conducted in partnership with a friendly nation, aimed at confirming the existence of these valuable reserves.
The survey marks the launch of what officials are referring to as an initiative to capitalise on the ‘blue water economy,’ which encompasses not only oil and gas but also other valuable marine minerals.
The preliminary report from DawnNews suggested that the reserve is expected to be the fourth largest globally.
Former Oil and Gas Regulatory Authority (Ogra) member Muhammad Arif, however, cautioned that it remains “wishful thinking” until the reserve prospects are thoroughly assessed and the drilling process is initiated. He emphasised that exploration alone demands a substantial investment of approximately USD 5 billion, with an estimated timeline of four to five years before reserves from an offshore site could be extracted. When asked whether these reserves would be sufficient to meet the nation’s energy demands, he emphasised that it depends on “the size and recovery rate of the production.” He further explained, “If this is a gas reserve, it can replace LNG imports, and if these are oil reserves, we can substitute imported oil.”
Pakistan has long grappled with escalating debt and surging inflation, heavily reliant on foreign assistance, which remains unpredictable and often elusive. Exacerbating the situation, political actors have been under the foothold of America which has further compounded the nation’s economic distress.
According to a report by the Express Tribune, Pakistan’s total energy import bill in 2023 amounted to $17.5 billion. It is projected to almost double to $31 billion over the next seven years. At present, Pakistan fulfills 29% of its gas, 85% of its oil, 20% of its coal, and 50% of its liquefied petroleum gas (LPG) needs through imports.
In January, Pakistan sought $30 billion for gas production to alleviate its fuel import burden. According to Energy Minister Mohammad Ali, the country possesses 235 trillion cubic feet (tcf) of gas reserves. With an investment of $25 billion to $30 billion over the next decade, 10% of these reserves could be tapped, potentially reversing the ongoing decline in gas production and mitigating energy imports. His remarks served as an appeal to foreign investors.
A staggering 74% of the urban population is now unable to cover their monthly expenses with their existing income, ARY News recently reported, citing a survey. This marks a significant rise from May 2023, when 60% of households reported financial difficulties. According to the survey, 10% of individuals have taken on part-time employment to augment their income.
The survey further revealed that over half—56%—of those who are barely managing to meet their expenses are unable to save any money after addressing their essential needs.
Financially strained Pakistan is currently engaged in negotiations with Middle Eastern banks to secure approximately USD 4 billion in loans to fulfill its external financial obligations for the ongoing fiscal year. This effort is part of the USD 7 billion Extended Fund Facility, which is awaiting approval from the International Monetary Fund (IMF).
For the current fiscal year, Pakistan has projected foreign borrowing of around USD 20 billion within its budget, in addition to a separate USD 3 billion rollover from the UAE, intended to support its balance of payments. With this level of borrowing, the country’s foreign reserves are anticipated to rise to approximately USD 19-20 billion by the close of the fiscal year.
May Allah protect Pakistan
The United States’ decision to invade Iraq in March 2003 was justified through the following narrative, President George W. Bush presented. He said the invasion was a crucial measure” in the “war on terror,” aimed at deposing the “Iraqi dictator Saddam Hussein” and eliminating the alleged stockpiles of “weapons of mass destruction,” (which were never found). However, several members of Congress contested this rationale, arguing that the primary objective was, in fact, to seize control of Iraq’s oil reserves.
The EIA reported that Iraq held the fifth-largest proven crude oil reserves in the world, and was the second-largest crude oil producer in OPEC.
In a 2003 background analysis, the EIA also reported that the Iran-Iraq War, the Gulf War, and severe economic sanctions had profoundly undermined Iraq’s economy, infrastructure, and societal structure during the 1980s and 1990s.
Oil has consistently been a pivotal factor in shaping America’s foreign policy, influencing its military, political, and economic interventions.
We pray for Pakistan’s safety and fervently hope to avert a repeat of the unjust and egregious invasions that have ravaged other Muslim nations.
