Pakistan’s Oil Discoveries: Separating Fact from Hype

Recent headlines have been buzzing with sensationalist claims about Pakistan discovering “black gold” that could make the country “super rich.” These announcements follow several oil and gas discoveries made in Pakistan in early 2025. But what’s the reality behind these headlines, and what do these discoveries actually mean for Pakistan’s energy future and economy?

Recent Oil and Gas Discoveries in Pakistan

Mari Petroleum’s Triple Discovery in Waziristan

Mari Petroleum Company Limited (MPCL) has made three significant oil and gas discoveries in North Waziristan between February and April 2025:

1. First Discovery (February 2025): Initial testing showed a flow of 12.96 million standard cubic feet per day (MMSCFD) of gas and approximately 20 barrels per day (bpd) of condensate from the exploratory Spinwam-1 well, which was drilled to a depth of 4,400 meters in the Waziristan Block Arab News.
2. Second Discovery (March 2025): Further testing at the Spin Wam-1 well in the Lokhart Formation revealed enhanced production of 20.485 MMSCFD of gas and 117 barrels of light crude oil daily, with a flow pressure of 3,431 pounds per square inch (psi) Tribune.
3. Third Discovery (April 2025): The most recent find is expected to yield 2.38 million cubic feet of gas per day and 122 barrels of crude oil daily from the Waziristan Block Daily Times.

Mari Petroleum holds a 55% stake in the Waziristan Block, with Oil & Gas Development Company Limited (OGDCL) holding 35% and Orient Petroleum the remaining 10%.

OGDCL’s Discovery in Attock

Separately, the Oil & Gas Development Company Limited (OGDCL) announced a significant oil and gas discovery in Attock, Punjab. Drilling at the Soghri North-1 well, which began on May 21, 2024, has resulted in a daily production of 14 MMSCFD of gas along with 430 barrels of crude oil. OGDCL holds 100% ownership of this well nation.com.pk.

Pakistan’s Current Energy Landscape

To properly assess the impact of these discoveries, it’s essential to understand Pakistan’s current energy situation:

Oil Production vs. Consumption

• Current Production: Pakistan’s domestic crude oil production currently stands at approximately 62,000-65,000 barrels per day (bpd) as of late 2024 Trading Economics.
• Consumption: Pakistan’s oil consumption was reported at 393,519 barrels per day as of December 2023, showing a decrease from 489,268 barrels per day the previous year CEIC Data.
• Import Dependency: The gap between production and consumption means Pakistan relies heavily on imports. The country is expected to import 5% more crude oil in the financial year ending June 30, 2025, with projections for a 7% increase for the full calendar year 2025 S&P Global.

Financial Burden of Energy Imports

• Pakistan currently spends approximately $21.43 billion annually on fuel imports, which represents about 66% of its total foreign exchange reserves Express Tribune.
• This significant allocation of foreign exchange for energy imports places enormous pressure on Pakistan’s economy and contributes to its ongoing financial challenges.

Circular Debt Crisis

• As of December 2024, circular debt in Pakistan’s energy sector has reached Rs4,700 billion (approximately $17 billion). Of this, Rs2,400 billion is attributed to the power sector and Rs2,300 billion to the gas sector Pakistan Today.
• This growing debt poses a significant fiscal risk, limiting essential development spending and increasing borrowing requirements.

Evaluating the Significance of Recent Discoveries

Production Capacity vs. National Needs

When combined, the recent onshore discoveries by Mari Petroleum and OGDCL would add approximately:

• Gas Production: About 49-50 MMSCFD (combining all reported flows)
• Oil Production: Roughly 689 barrels per day (combining all reported crude oil and condensate production)

To put this in perspective:

• The additional 689 bpd represents only about 1% of Pakistan’s current daily oil production of ~65,000 bpd.
• The current oil production, even with these additions, would still meet less than 20% of Pakistan’s domestic consumption of around 393,000 bpd.

Economic Impact

While these discoveries are undoubtedly positive developments, their immediate economic impact should be viewed realistically:

1. Foreign Exchange Savings: Based on current production estimates, these new discoveries would offset only a very small percentage of Pakistan’s $21.43 billion annual fuel import bill.
2. Energy Security: The discoveries contribute incrementally to energy security by adding to domestic production, but don’t fundamentally alter Pakistan’s import dependence in the near term.
3. Investment and Development: The finds demonstrate the potential for further exploration, potentially attracting additional investment in Pakistan’s energy sector.

The Offshore Discovery Claims

Some reports have cited a potentially much larger offshore oil and gas discovery in Pakistan’s territorial waters. According to certain sources, this discovery could rank as the world’s fourth-largest offshore reserve energy-oil-gas.com. However, these claims should be treated with caution:

1. Early Exploration Stage: The offshore discoveries are still in the very early stages of exploration, with no confirmed production figures.
2. High Investment Requirements: According to energy experts, properly exploring these offshore reserves would require approximately $5 billion in investment, with extraction potentially taking up to five years CNBC TV18.
3. Commercial Viability: The commercial viability of these offshore reserves has yet to be established, making predictions about their economic impact premature.

Challenges and Realistic Expectations

Several factors will determine the actual impact of these discoveries:

Development Timeline

Even with confirmed discoveries, developing them into productive assets takes time:

• Infrastructure development
• Production facilities
• Transportation networks
• Refining capacity

For offshore reserves, this timeline is even longer, potentially 5+ years before any significant production.

Regional Security Concerns

Some of these discoveries, particularly in North Waziristan, are in regions that have historically faced security challenges, which could impact development timelines and costs.

Investment Requirements

Substantial investment is needed to convert these discoveries into producing assets. Given Pakistan’s current economic challenges and circular debt crisis, securing this investment could prove challenging.

Conclusion: What This Means for Pakistan

The recent oil and gas discoveries in Pakistan represent positive developments for the country’s energy sector and could contribute to greater energy security over time. Managing Director and CEO of Mari Petroleum, Fahim Haider, appropriately described these discoveries as “promising developments for Pakistan’s energy sector” rather than transformative game-changers.

These findings do offer several benefits:

1. Incremental Improvement: They add incrementally to domestic production, helping to slightly reduce import dependence.
2. Potential for Further Exploration: The success of these explorations suggests the potential for additional discoveries, particularly in the Waziristan Block.
3. Long-term Energy Strategy: These discoveries can form part of Pakistan’s broader strategy to enhance energy security and reduce its reliance on imports.

However, the sensationalist headlines suggesting that Pakistan will become “super rich” from these discoveries significantly overstate their immediate impact. The production volumes reported so far, while valuable, are relatively modest compared to Pakistan’s overall energy needs and import dependence.

For Pakistan to meaningfully address its energy challenges, a comprehensive approach is needed:

• Continued exploration and development of domestic resources
• Investment in energy infrastructure
• Addressing the circular debt crisis
• Diversifying energy sources, including renewable energy
• Implementing energy efficiency measures

The recent discoveries are a step in the right direction, but the path to energy self-sufficiency and economic transformation from oil wealth remains a long and challenging one for Pakistan.