Oil or snake oil? How to take Trump for a ride, the Pakistan-way

On 31 July, US President Donald Trump announced a deal with Pakistan to develop what he described as the country's "massive oil reserves," even asserting that Pakistan might one day sell oil to India.

- ABHINANDAN MISHRA

This claim by Trump, likely drawing on a 2013 US Energy Information Administration (EIA) report, without evidence of any new discoveries, raises questions about its diplomatic or economic motivations, possibly aimed at bolstering US-Pakistan ties or countering regional influences.

The 2013 EIA report, titled "Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States", estimated Pakistan could hold 227 billion barrels of in-place shale oil, with 9.1 billion barrels technically recoverable.

Prepared with analytical support from Advanced Resources International, a Virginia-based consulting firm, the report analysed geological data to estimate oil trapped in shale, akin to water held in a sponge.

Analysts calculated "risked oil in-place," then applied a "success factor" (the likelihood of achieving commercially viable flow rates) and a "recovery factor" (how much could be extracted with existing technology, based on US shale formations). The technically recoverable resource was derived by multiplying these factors, indicating theoretical production potential, irrespective of economic or market constraints.

These figures have been repeatedly cited by Pakistani officials as evidence of vast, untapped wealth, driving investment pursuits for over a decade.

As was expected and perhaps intended, exploratory efforts followed to test this potential.