Could This Change Everything for Pakistan?
A major discovery of oil and gas reserves could transform the country's fortunes
Pakistan’s nominal GDP per capita is estimated to be $1,588 (USD), placing it 158th in the world (the US nominal GDP per capita is $86,601, UK $52,423, UAE $49,550), but that might be about to change.
I was pleasantly surprised to learn that Pakistan has discovered what could be the world's fourth-largest oil and gas reserves, mashaa-Allah. If the production potential is realised, it would put them ahead of countries in the Middle East (with the exception of Saudi Arabia) and even China.
This is a potential gamechanger, particularly considering the country’s heavy reliance on imported oil and gas (primarily from Saudi Arabia and the UAE), which, according to Oilprice.com, cost the country $17.5 billion in 2023, with that number projected to grow to $31 billion in seven years.
The country has also been grappling with an energy and inflation crisis, with electricity prices increasing by over 155% since 2021 (linked to conditions placed on Pakistan by the IMF).
However, as the Pakistani expert guests discuss in the TRT World piece below, the extraction will take at least $5 billion worth of investment and several years:
Pakistan will require external investment, but surprisingly, major oil companies aren’t falling over each other to exploit the situation, primarily due to security risks and instability in the country.
From what the commentators are saying, China will be the major extraction partner, having already committed to the $62 billion China-Pakistan Economic Corridor (CPEC) initiative.
With the West’s economies and global influence in decline, I wonder how they will react to not only the growing Chinese influence in the Global South but also to the prospect of another nuclear power (Pakistan) rising on the global stage.
Not to mention the fact that Pakistan’s neighbour, India, probably isn’t going to be too chuffed about this discovery.
And how will Saudi Arabia, the UAE and other Middle Eastern oil-producing countries react to both a loss of revenue (Pakistan bought more than $5 billion worth of crude petroleum from them in 2022 alone) and a new competitor? It’s no wonder that these countries have been working hard to diversify their income streams.
Politics is a dirty game. I pray that this discovery is a blessing that benefits our long-suffering brothers and sisters in Pakistan and the ummah at large, insha-Allah, and doesn’t become a cause of further division and strife.