- Pakistan is a developing country with a population approaching 240 million. The aggregate value of products and services required in the oil and gas sector is USD $9 billion
- Pakistan only produces 16% of its hydrocarbon requirements, which is fully consumed locally
- 430,000bpd of Pakistan’s of 500,000 bpd daily oil demand is imported.
- Gas production in Pakistan is 3.1 billion cubic feet per day (bcf/day), while demand stands at 6 bcf/day
- Major infrastructure improvements in the sector are being delivered as part of the $34 billion China Pakistan Economic Corridor (CPEC)
- Pakistan rolled out a new Offshore Exploration policy in 2023, offering attractive fiscal and regulatory incentives for offshore exploration
- The upcoming bidding round for 18 blocks and 40 offshore block (for the first time) will increase exploration activities
- The country’s onshore and offshore exploration and production (E&P) areas are divided into zones based on their geological risk and potential for resource discovery
Oil and gas market in Pakistan
Key opportunities for Canadian Oil and Gas companies in Pakistan
Pakistan offers opportunities to Canadian companies in the following areas:
- New and innovative Enhanced Oil Recovery (EOR) and production optimization technology and solutions
- Oil and gas drilling equipment and related services (wellheads, well testing and completion)
- Pipes and compressors
- Technologies to reduce the cost of development and production of heavy oil
- Technology to reduce methane emissions upstream
- Oil and gas EPC and consultancy services
- Seismic and data interpretation services
- Trainings and education on new drilling technologies
With its new ESG policy and COP29 commitments, Pakistan is creating policy frameworks for a carbon credit market. The country has also required oil and gas companies to cut their emissions, which is already driving demand for carbon capture, utilization, and storage (CCUS) solutions.
Industry highlights
6.9 million tons — Pakistan's import of liquefied natural gas (LNG) in 2022, a 44% increase from 2017
$17 billion — Value of the imported petroleum products in 2022
24 foreign and local exploration and production (E&P) firms operating in Pakistan
26 oil marketing companies operating in the country
30% of Pakistan has been explored for oil and gas
Top 3 — Pakistan's ranking for emerging (LNG) importing countries in South Asia
$10 billion Value of upcoming 300,000 barrels per day (bpd) refinery project
Notable challenges for Canadian Oil and Gas companies in Pakistan
- Challenging security environment
- Weak economic fundamentals resulting in shortages of foreign currency
- Corruption, excessive red tape, policy instability regulatory and contract risk
- Limited EDC coverage
- Strong competition from Chinese, European, and United States (U.S.) suppliers
Pakistan's business landscape
- Pakistan’s rapidly growing population is creating rising domestic energy demand. The Petroleum Policy 2012 offers good incentives for E&P companies, and the government guarantees purchase of production by state-owned companies. All payments to foreign companies are made in USD.
- Despite government incentives (new refinery policy and lowered taxes for offshore E&P activities), Pakistan is finding it difficult to attract and retain international exploration companies, due to bureaucratic hurdles and rising security challenges.
- Political instability contributes to policy uncertainty long-term.
Upcoming projects and events
Pakistan is expected to offer several new onshore and offshore exploration blocks in the coming years. The long awaited new refinery policy will propel the upgrade and expansion of the four refineries. This will cause both brownfield and greenfield developments, which will produce engineering services, technology and equipment supply opportunities worth billions of dollars.
Summary
Pakistan is an energy deficient country that must import oil and gas to meet its growing energy demands. While Pakistan has an established oil and gas sector and is believed to have large untapped resources like shale oil and tight gas, it can be a difficult market for companies to operate in.
There are, however, potential opportunities for companies with the right expertise and capabilities, related to:
- the expansion of the oil and gas pipeline network
- exploration of unconventional deposits
- increases in LNG imports
For more information on the oil and gas sector in Pakistan, please contact the responsible Trade Commissioner, Mr. Zohaib Khan (zohaib.khan@international.gc.ca) - oil and gas