Crude oil also known as black gold is the commodity keep the country’s wheel moving. If a country is deprived of this natural resource it has to import it from outside world, which makes it everything expensive and heavy reliance on countries selling it. With each day world political scenario changing each day the prices keeps moving.
In the world there are countries in the world always prefer to control their own resources and keep country economy under their control. They make every effort to keep the exploration goes on and production is kept in line with the consumption. Pakistan is one of the richest country in natural resources. It has estimated shale oil reserves of 9 billion barrels, however its current consumption is 440,000 barrels crude oil per year and refined approximately 600,000 barrels. Out of total 9 billion estimated reserves the proven reserves of 0.4 billion barrels or 400 million barrels. These proven reserves are consumption increase up to 800,000 barrels per month they will last for 500 years (5 centuries).
The installed capacity of refineries stands at 409,000 barrels or 19 Million Tons Per Day (MTPA) against consumption of 24MTPA. Currently seven refineries are operating in Pakistan the highest capacity is of Byco 155,000 barrels per day or 7.0 MTPA. To meet the countries requirement Pakistan need 1 more refinery with 150,000 to 200,000 barrels production capacity in near future. This will save the foreign exchange reserves deficit which is always a problem for Pakistan Economy.
The total account deficit for financial year July 2017 – June 2018 stood at $17.99 billion which is more than 5% of GDP and total oil imports of Pakistan was $12.93 billion almost 72% of total account deficit.
The US sanctions on Iran will further grow dim the Pakistan current account deficit to avoid further smash up situation the government of Pakistan have to work on exploration of 400 million barrels proven reserves on war footing. The foreign companies will be interested in enhancing production and take up the new explorations as the oil prices using it as a carrot to foreign companies.
The government is negotiation with Kingdom of Saudi Arabia for setting up oil refinery in Gwadar.
If the previous Pakistani governments have worked on this area and planned the Pakistan economy should not have been in mess what it is in today. This criminal negligence on governments part is unpardonable. These governments went on and choose the LNG import option again a burden avenue was opted. For the oil import bill the government kept on availing new loans.
Now this is high time the new government should immediately come with concrete plan for bringing proven oil reserves and make it good for reducing oil import bill and excess production exporting taking advantage of steeping oil prices in global market.