Engr Hussain Ahmad Siddiqui

In the backdrop of rapidly depleting oil and gas resources, it is encouraging that Pakistan has successfully revived its offshore exploration drive after a hiatus of nearly two decades. The recently launched “Offshore Bid Round 2025” has attracted keen interest from both domestic and international companies, signalling renewed confidence in Pakistan’s energy sector.

In October 2025, the government awarded 23 offshore exploratory blocks to four consortia led by domestic exploration and production (E&P) companies; Pakistan Petroleum Ltd (PPL), Oil and Gas Development Co Ltd (OGDCL), Mari Energies Ltd, and Prime International Oil & Gas Co Ltd (PIOGCL), a subsidiary of HUBCO. These awards, out of a total of 40 blocks offered for bidding, cover an extensive area of around 53,500 square kilometres across the Indus and Makran basins. The consortia have collectively pledged $80 million for initial exploration over the next three years, including geological and geophysical surveys, seismic data acquisition, and interpretation to identify drilling prospects. The next phase, involving exploratory drilling, will determine the commercial viability of any discovered reserves. The remaining 17 blocks are expected to be reoffered in future bid rounds.

A landmark development in this round is Turkiye’s national oil and gas company, Turkish Petroleum (TPAO), securing a 25 percent stake and operatorship in the eastern offshore Indus Block-C through its subsidiary Turkish Petroleum Overseas Co (TPOC). This move expands Turkiye’s energy footprint beyond its domestic and Mediterranean operations, marking a new partnership in Pakistan’s exploration landscape. Another major participant is United Energy Group (UEG) of Hong Kong, already Pakistan’s largest foreign investor in the E&P sector, operating in Pakistan as United Energy Pakistan (UEP).

Pakistan’s offshore domain comprises two main basins — the Indus Basin and the Makran Basin. Historically, exploration activity has been limited. Since independence, only 18 offshore wells have been drilled — 15 in the Indus Basin and 3 in the Makran Basin — but none yielded commercially viable oil or gas reserves. Offshore exploration began in 1961 when Sun Oil Company (now SUNOCO) of the USA conducted seismic surveys and drilled three nearshore wells in 1963–64. Wintershall Dea of Germany followed with three wells between 1972 and 1975, and Husky Energy of the USA drilled one in 1978. Later, Total (now TotalEnergies) of France explored ultra-deep waters in 2004, while Shell, the Dutch group, drilled in 2007. Although these efforts did not lead to discoveries, they generated valuable geological data.

In the Makran Basin, Marathon Oil Corporation (USA) drilled one well in 1976–77, and Ocean Energy Co (USA) followed in 2000–01, both without success. The most notable recent attempt came in 2019 when ExxonMobil (USA), in collaboration with Eni (Italy) and Pakistani partners, drilled the Kekra-1 well in the Indus Basin — an effort that ultimately failed, prompting ExxonMobil’s exit from Pakistan.

In June 2023, the government offered 12 offshore blocks — six in shallow waters, two in deep waters, and four in ultra-deep zones — but received no bids. However, optimism returned following a basin assessment study by DeGolyer and MacNaughton (D&M), a leading US petroleum consultancy, which confirmed substantial untapped hydrocarbon potential in Pakistan’s offshore basins, particularly the Indus and Makran regions. Pakistan’s offshore zone spans nearly 300,000 square kilometres, bordered by energy-rich nations such as Oman, the UAE, and Iran.

In September 2024, reports suggested that Pakistan had identified possible oil and gas reserves in its offshore territory that could rank among the world’s fourth largest. While their commercial viability remains unproven, this revelation prompted the government to announce the Offshore Bid Round 2025 to attract new foreign and local investment. A 2015 study by the United States Agency for International Development (USAID) had estimated the Indus Basin’s potential at around 14 billion barrels of technically recoverable crude oil. However, separate studies conducted by the United States Energy Information Administration (EIA) in 2015 and by the United States Geological Survey (USGS) in 2017 estimated lower numbers, less than 10 barrels oil.

As of June 30, 2025, Pakistan had consumed about 81 percent of its total proven oil reserves of 1,245 million barrels, leaving around 353 million barrels as recoverable—-the increased level following new discoveries and upward revisions in existing fields. At the current production and consumption rates, these deposits could be exhausted within 15 years. Pakistan produces between 60,000 and 75,000 barrels per day, against a daily demand of approximately 400,000 barrels, resulting in oil imports exceeding $12 billion annually.

For natural gas, Pakistan’s remaining proven reserves are estimated at 19 trillion cubic feet (TCF), with about 70 percent already consumed. The country’s total recoverable gas resources were originally around 63.24 TCF of which 43.73 TCF had been produced. With declining output from mature fields and the absence of major new discoveries, gas production has been steadily falling. At current consumption levels, the reserves may last another 15 years. Pakistan also imports around 8.7 billion cubic metres of liquefied natural gas (LNG) annually to meet domestic demand.

During the past decade, Pakistan’s onshore E&P sector has also suffered setbacks as several international companies — including Kuwait Foreign Petroleum Exploration Company (KUFPEC), Eni, Shell, TotalEnergies, and Baker Hughes — either exited the market or significantly scaled down their operations. Persistent economic instability, currency depreciation, high taxation, regulatory bottlenecks, and the growing circular debt in the gas sector have discouraged investment and led to a sharp decline in drilling activity and discoveries.

Given these challenges, the renewed confidence shown by domestic and foreign investors in Pakistan’s offshore sector is a welcome development. Successful discoveries could attract long-term foreign investment, strengthen the E&P industry, and move Pakistan toward energy self-reliance by reducing its dependence on costly imports. With the right investment climate, policy stability, and technological collaboration, the Indus Basin could eventually meet domestic energy needs and potentially emerge as a regional energy hub.

(The writer is retired Chairman of the State Engineering Corporation)