Pakistan is brimming with natural resources. Be it oil, gas, coal, minerals or any other natural resources, they can be found in abundance throughout the country.
Recently, the largest oil drilling company in the world, ExxonMobil returned to Pakistan to drill for oil and gas reserves. This is a significant development in regard to Pakistan’s natural oil and gas reserves as ExxonMobil has returned to Pakistan after 27 years and the chances of discovering huge oil reserves are quite bright.
Last year, the Texas-based ExxonMobil sent out a delegation to meet Prime Minister Imran Khan, who assured that the company would be provided with a safe working environment in the country. Subsequently, the company announced their drilling plans for Pakistan in November 2018 and docked their drilling platforms and ships in Pakistan in January 2019.
As of 10th January 2019, ExxonMobil, in collaboration with Italy-based ENI kicked off drilling and resource exploration/extraction operations about 230 KM from the coast of Karachi. This is for the first time in 9 years that off-shore drilling in Karachi’s deep-water coast has resumed, subject to improved security conditions in the country. ExxonMobil has docked one major drilling ship, three supply vessels and two helicopters for drilling operations on the site. The company plans on digging 5800 meters deep and expect to complete the spud in 60 days.
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Italy-based ENI Pakistan, ExxonMobil, Exploration and Production Pakistan BV, Pakistan’s Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) are all stake-holders in this project and are conducting the drilling operations as part of a joint venture. The government has also exempted customs duty for machinery that would be used for this project.
The estimated cost for this project is around a $100 Million, with officials expecting to discover huge deposits of oil. If the project is able to discover reserves as large as anticipated, Pakistan would make its way into the top 10 oil-producing nations, ranked somewhere around 6th. The company representatives stated, “Eni Pakistan has estimated nine trillion cubic feet gas deposits,” the official said, adding “ExxonMobil expects oil deposits there.”
What would Discovery of Major Oil Reserves Mean for Pakistan?
Discovery and extraction of oil, gas and other resources certainly would be a significant development for the country. Currently, Pakistan’s domestic oil and gas production only allows the country to meet around 15% of its energy needs. Subsequently, Pakistan is forced to import oil and LNG (liquefied natural Gas), which is extremely expensive. As a matter of fact, Oil imports constitute a major portion of Pakistan’s annual import bill, leading to a greater difference in the import and export cashflows.
If the drilling projects successfully extract large reserves of oil and gas, the need to import resources from abroad would decrease, contributing to a healthier current account. Reports suggest that the chances of discovering large oil deposits are bright and the country and positive results are expected very soon.
