US Firms Eye Pakistan’s Energy Sector Amid Trump’s Claims of Massive Oil Reserves

The United States’ top diplomat in Pakistan has said American companies are showing “strong and growing interest” in Pakistan’s oil, gas, and minerals sector, following US President Donald Trump’s surprise remarks last month touting the South Asian nation’s “massive” energy reserves, reported Bloomberg. The comments came after Petroleum Minister Ali Pervaiz Malik met with US Chargé d’Affaires Natalie A. Baker in Islamabad to discuss strengthening energy sector cooperation. According to a ministry statement, Malik said discussions with US firms on bidding rounds for exploration blocks were already underway. “There is a strong and growing interest from US companies in Pakistan’s oil, gas, and minerals sector, in line with the vision of President Trump,” Baker said, adding that the embassy would “actively facilitate direct linkages” between businesses in both countries. The US embassy did not provide further details. Trump’s late-July social media post claiming Pakistan holds “massive oil reserves” caught global industry watchers off guard, contradicting existing geological estimates and coming at a time when foreign investment in Pakistan’s energy sector has been on the decline. His remarks coincided with escalating trade tensions with India, where Washington has criticized New Delhi for continuing to import Russian crude. In a dig at India, Trump even suggested Pakistan could one day sell oil to its neighbor. Energy experts, however, caution that the claims appear more political than technical. “If Pakistan had massive oil reserves, international majors wouldn’t have exited in such large numbers,” said Moin Raza Khan, former chief executive of Pakistan Petroleum Ltd. Pakistan has struggled to attract and retain foreign energy giants. Shell Plc exited in 2023 after 75 years in the country, while Kuwait Petroleum Corp. ended its four-decade presence last year. TotalEnergies SE also pulled out of a fuel venture, and earlier efforts by Exxon Mobil and Eni Spa to explore offshore potential in the Arabian Sea yielded no significant discoveries. The most recent major finds date back more than a decade: Makori East (2011), led by Hungary’s MOL Group, and Nashpa (2009), operated by Oil & Gas Development Co. (OGDC). Pakistani officials often cite a 2013 US Energy Information Administration estimate of 9.1 billion barrels of recoverable shale oil. Yet analysts remain skeptical. By contrast, Saudi Arabia, Russia, and the US hold billions of barrels of recoverable reserves, underscoring the scale of Pakistan’s limitations. Despite challenges, Islamabad is seeking to attract foreign investors. Earlier this year, the government announced a new bidding round for 40 offshore exploration blocks, including in the Indus Basin. OGDC officials confirmed ongoing discussions with US companies, with bids due in October 2025. Any meaningful discovery will be a boost for Pakistan, where oil production has been sliding since its 2018 peak. The country currently spends around USD $11 billion annually on oil imports-nearly one-fifth of its total import bill, according to central bank data.