U.S. Companies Show Interest in Pakistan Oil and Gas After Trump Reserve Claims

U.S. energy companies are exploring opportunities in Pakistan’s oil and gas sector after President Donald Trump claimed the country has “massive” oil reserves. Analysts warn that security risks and poor infrastructure could limit investment and production.

Diplomatic Talks on Energy Investment

U.S. Charge d’Affaires in Pakistan, Natalie A. Baker, met with Petroleum Minister Ali Pervaiz Malik in Islamabad last week to discuss energy sector cooperation. Baker said several American companies are considering investment and bidding on Pakistan’s oil, gas, and mineral exploration projects.

Malik confirmed that Pakistan is reviewing bids for a new round of exploration blocks and is seeking foreign partners to increase investment in the sector, despite security and infrastructure challenges.

Trump’s Reserve Claim and Industry Response

In July, President Donald Trump stated that Pakistan has “massive” oil reserves, a claim that diverges sharply from industry estimates. Analysts caution that Pakistan’s actual recoverable reserves are significantly lower than the numbers cited by Trump.

Some experts, including Moin Raza Khan, former CEO of Pakistan Petroleum Ltd., said the statement appears to be politically motivated and does not reflect verified geological data. The comment also comes at a time of heightened U.S.-India trade tensions, with India under scrutiny for its crude imports from Russia.

Reserve Estimates and Production Reality

Pakistan often cites a 2013 Energy Information Administration estimate of 9.1 billion barrels of recoverable shale oil. Independent analysts, including Iqbal Jawaid of Karachi Arif Habib Ltd., estimate the country’s actual recoverable reserves at around 238 million barrels—far below the figures cited by U.S. President Trump.

The nation’s largest producing fields, Nashpa (2009) and Makori East (2011), remain the most recent major discoveries. Offshore exploration by companies such as Eni and Exxon Mobil has not resulted in any significant new finds, highlighting the challenges facing foreign investors in Pakistan’s energy sector.

Exiting Foreign Investors

Over the past decade, several major international energy companies have withdrawn from Pakistan’s oil and gas sector, including Kuwait Petroleum Corp., TotalEnergies, and Shell. Among foreign investors, only MOL Group continues operations, highlighting the difficult business environment and security challenges that have driven many firms to exit.

New Bidding Opportunities

Earlier this year, Pakistan launched a bidding round for 40 offshore exploration blocks, including key areas in the Indus Basin. The Oil and Gas Development Company Ltd. (OGDCL) is in active discussions with several U.S. energy companies about participating, with bids scheduled to close in October.

Officials say the initiative is aimed at boosting domestic oil production and reducing reliance on imports, but analysts warn that security risks, outdated infrastructure, and regulatory hurdles could limit foreign investor interest.

Security, Infrastructure, and Terrorism Risks

Despite efforts to attract foreign investment, Pakistan’s energy sector faces significant challenges that could deter U.S. and other international companies:

• Security threats: Islamic militant groups, sporadic attacks, and threats targeting foreign nationals create serious risks for overseas investors and operational staff. Past incidents have forced multinational companies to scale back operations or exit the market entirely.

• Infrastructure gaps: Pakistan’s oil and gas sector suffers from limited modern exploration technology, unreliable transport networks, and insufficient port facilities, making extraction, processing, and export of oil difficult and costly.

• Regulatory and political hurdles: Bureaucratic delays, inconsistent licensing procedures, and sudden policy changes increase uncertainty for investors, raising the financial and operational risks of long-term projects.

Michael Kugelman, senior fellow at the Asia Pacific Foundation of Canada, said:
"Even if Pakistan’s oil reserves were substantial, security threats, weak infrastructure, and political instability make it a high-risk environment. These conditions explain why many international companies have already left the market."

Analysts warn that the combination of terrorism, Islamic militancy, and unsafe conditions for foreign personnel continues to limit foreign investment. Without stronger security measures and political stability, Pakistan’s energy potential may remain largely untapped, leaving the country dependent on imported oil and gas despite its resource endowment.

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