Pakistan’s Petroleum Minister Ali Pervaiz Malik met with US Charge d’Affaires Natalie A. Baker last week in Islamabad on strengthening cooperation in the energy sector, according to the ministry. Malik said talks with American companies on a round of bids for exploration blocks were already underway.

“There is a strong and growing interest from US companies in Pakistan’s oil, gas, and minerals sector, in line with the vision of President Trump,” Baker said, according to a ministry statement. The embassy would “actively facilitate direct linkages” between American and Pakistani companies, she added.

The US embassy in Islamabad didn’t immediately elaborate on the comments.

Trump sparked a surge of interest in Pakistan’s energy potential after a social media post in July claimed the country has “massive oil reserves” — a declaration that caught a number of industry veterans by surprise. The comment is at odds with existing estimates and comes against a backdrop of declining foreign investment.

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It also coincides with the US president’s trade spat with India. At the same time as Trump was talking up Pakistan’s oil potential, he was ripping New Delhi for buying crude from Russia, threatening economic penalties and souring diplomatic relations. The US president needled India further, suggesting Islamabad could sell oil to its neighbor “some day!”It’s a “political statement,” said Moin Raza Khan, an energy veteran and former chief executive officer of Pakistan Petroleum Ltd., the country’s second-largest energy explorer. “If Pakistan had massive oil reserves” then so many foreign companies wouldn’t have left, he added.A White House spokesperson declined to comment beyond Trump’s post.Pakistani officials like to cite a 2013 estimate from the Energy Information Administration of 9.1 billion barrels of recoverable shale oil, but analyst Iqbal Jawaid at Karachi Arif Habib Ltd. reckons overall reserves are much lower. He puts the figure at closer to about 238 million barrels.

That’s modest at best, when the world’s biggest oil producers, such as Saudi Arabia, Russia and the US, are sitting on billions of recoverable barrels, according to estimates from Rystad Energy. In terms of discoveries, it has been more than a decade since anything notable was found in Pakistan.

The two most recent big finds are now the nation’s two-largest oil-producing fields, said Karachi Arif’s Jawaid. Makori East was discovered in 2011 by a group that includes Hungary’s MOL Group, and Nashpa in 2009 by a venture led by Oil & Gas Development Co., the country’s biggest explorer.

Majors Exit

MOL has been operating in Pakistan since 1999, but it’s part of a shrinking pool of foreign names. Last year, Kuwait Petroleum Corp. began its exit after more than four decades and TotalEnergies SE sold its stake in a fuel business. Shell Plc left in 2023 after 75 years operating in the country.

Eni Spa and Exxon Mobil Corp. took a look at Pakistan’s offshore potential in the Arabian Sea in 2019, drilling a well in partnership with Oil & Gas Development and other companies, but didn’t find anything meaningful.

Pakistan is seeking to open up more opportunities for exploration, announcing a bidding round for forty offshore blocks, including in the Indus Basin, earlier this year. Oil and Gas Development is in discussion with several US companies in relation to the bidding, Chief Financial Officer Anas Farook said at conference last week organized by Topline Securities Ltd., without elaborating. The company didn’t immediately respond to a request for a comment.

Bids for the offshore blocks currently being offered are due in October.

Any discovery that boosts domestic oil production would be a boon for the government, given its energy import bill. The nation’s output has been sliding since hitting a peak in 2018, according to data from the International Energy Administration. Instead, Pakistan spends around $11 billion a year buying oil, according to central bank data, nearly a fifth of the country’s total imports.

“There would be significant risks for those looking to unearth Pakistani reserves, given shortages of technology and infrastructure and entrenched security challenges,” said Michael Kugelman, a non-resident Senior Fellow at Asia Pacific Foundation of Canada, a longtime analyst of the country.

“If these obstacles were easy to overcome, then we would have seen Pakistan tapping into these reserves instead of relying so heavily on oil imports, and we would have seen more external players getting involved,” he said.