NEW DELHI: On 31 July, US President Donald Trump announced a deal with Pakistan to develop what he described as the country’s “massive oil reserves,” even asserting that Pakistan might one day sell oil to India. This claim by Trump, likely drawing on a 2013 US Energy Information Administration (EIA) report, without evidence of any new discoveries, raises questions about its diplomatic or economic motivations, possibly aimed at bolstering US-Pakistan ties or countering regional influences.
The 2013 EIA report, titled “Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States”, estimated Pakistan could hold 227 billion barrels of in-place shale oil, with 9.1 billion barrels technically recoverable. Prepared with analytical support from Advanced Resources International, a Virgina-based consulting firm, the report analysed geological data to estimate oil trapped in shale, akin to water held in a sponge.
Analysts calculated “risked oil in-place,” then applied a “success factor” (the likelihood of achieving commercially viable flow rates) and a “recovery factor” (how much could be extracted with existing technology, based on US shale formations). The technically recoverable resource was derived by multiplying these factors, indicating theoretical production potential, irrespective of economic or market constraints. These figures have been repeatedly cited by Pakistani officials as evidence of vast, untapped wealth, driving investment pursuits for over a decade. As was expected and perhaps intended, exploratory efforts followed to test this potential.
From 2014 to 2015, a USAID-funded shale gas study provided $1.8 million in technical assistance for mapping, lab analysis, and pilot policy planning. Pakistan’s Ministry of Petroleum and Natural Resources collaborated with US experts to assess shale oil and gas formations in the Middle and Lower Indus Basin. The estimation that emerged was of 14 billion barrels of recoverable shale oil and 95 trillion cubic feet of shale gas. Later, between 2015 and 2020, Pakistan’s Oil & Gas Development Company Ltd. (OGDCL) and Pakistan Petroleum Limited (PPL) drilled pilot wells in Sindh and planned sites in Balochistan and Khyber Pakhtunkhwa, collecting critical reservoir data— pressure, porosity, and shale depth—but failed to demonstrate commercial viability.
A deepwater well near Karachi, drilled in 2019 by a joint venture including ExxonMobil, ENI, PPL, and OGDCL, was abandoned after no commercially viable reserves were discovered. Similar multi-year surveys completed in 2024 confirmed geological potential but did not uncover new proven reserves. In 2017, a study done by the US Geological Survey (USGS) provided even lower estimates than the 2013 EIA, reflecting additional geological uncertainty and a more conservative methodology.
Across all these initiatives the common result was— substantial theoretical resources exist, but technical, economic, and logistical hurdles prevent commercial extraction. This remains true more than a decade later, as no commercial shale oil or shale gas production exists in Pakistan. The large numbers in the EIA report are geologically hypothetical—they count all oil that advanced techniques might recover from shale, but not one barrel has been lifted from these formations.
Pakistan’s and Trump’s claims of “massive oil reserves” fuelled by the 2013 EIA report stand in stark contrast to its struggling conventional oil production. Output has plummeted from 89,030 barrels per day in 2019 to an estimated 64,262 barrels per day in 2025, hampered by ageing fields and a lack of major new discoveries. In 2023, Pakistan spent $105.7 billion on imported petroleum products, including crude and refined oil, reflecting its heavy dependence on foreign supplies. With proven conventional reserves at just 437 million barrels— dwarfed by global leaders like Venezuela or Saudi Arabia, each boasting over 250 billion barrels—Pakistan’s oil sector underscores the chasm between speculative shale dreams and economic reality.
Historically, the US Energy Information Administration reported Pakistan’s reserves at 353.5 million barrels in 2016, ranking it 52nd globally and accounting for just 0.021% of total world reserves. Notably, shale development is extremely costly, with each pilot horizontal well priced between $10 million and $20 million. A Pakistani agency estimated $1.5 billion for exploring 500 wells, reflecting the high expense and technical complexity. The moot point that has been lost during this entire development is that China, Pakistan’s all-weather ally via the China-Pakistan Economic Corridor (CPEC) and other infrastructure ventures, has invested billions in strategic projects but not in oil extraction, suggesting scepticisms about commercial viability.
If there was oil, which could be taken out, Beijing would have already done that. Pakistan’s continued citation of the 2013 EIA report, including in dealings with the Trump administration, illustrates how speculative numbers have been used to secure financial and diplomatic engagement. US agencies have invested in studies, technical workshops, and surveys, yet outcomes remain noncommercial.
The story of Pakistan’s oil reserves is not only a cautionary tale about the gap between theoretical potential and proven assets, but also a striking example of how a country can use decade-old speculation to fool even those who consider themselves the smartest and the most informed in the room.
