Will this solve Pakistan’s economic crisis once and for all? Time will tell.
We may be on the verge of discovering massive oil reserves in Pakistan, according to the caretaker minister for maritime and foreign affairs, Abdullah Hussain.
Mr. Hussain mentioned that ExxonMobil, the US-based energy company, is on the verge of discovering huge oil reserves close to the Pakistan-Iran border, which may be even bigger than Kuwait’s reserves.
The minister said this while addressing Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
ExxonMobil has currently drilled up to 5000 meters near the Iranian border and is thoroughly optimistic about the oil reserve discovery.
Top 10 Oil Producers in The World
If the reserves do turn out to be as massive as expected, it will put Pakistan among the top 10 oil producing countries, at the 6th position above Kuwait.
Currently, Kuwait possesses 8.4% of the world’s oil reserves and claims that they have nearly 101.5 billion barrels of crude oil. The country also owns 2.5 billion barrels in the Saudi-Kuwaiti neutral zone.
Mr. Hussain said that the government has already forged an agreement with ExxonMobil for a $10 billion “generation complex”. He said,
They are also putting up an LNG berth at Port Qasim, the second seaport in Karachi. They have already paid for the drilling rights in Pakistan. Pakistan is providing a level playing field to foreign investors and they are interested in coming to Pakistan. What we need to do is to meet their standards and attract them to make investment.
ExxonMobil made the headlines earlier in May 2018, when the company acquired a 25% stake in offshore drilling in Pakistan. The agreement was inked at Prime Minister’s Secretariat between Oil and Gas Development Corporation, Government Holding Private Limited PPL and Eni.
Could Substantially Reduce Our Import Bill
It should be noted that most of Pakistan’s import bill is based on oil imports. The country only manages to meet 15% of its demand through locally produced crude oil, which is around 22 million tons, while the other 85% is imported.
Current account deficit for Pakistan stands at $18 billion. Pakistan’s imports stood at $12.928 billion in the July-May 2017-18 period for the last fiscal year.
This discovery alone has the potential to solve one of the biggest problems Pakistan currently faces.
We’ll have to wait and see if ExxonMobil’s prediction actually pans out.