Trump's Pak gamble: An oil deal based on 'great expectations' or empty reserves?

India Today

An analysis of the recent oil and trade deal signed by Donald Trump with Pakistan, exploring the motivations behind the move.

Transcript

00:00So many questions that really come up with the decisions that Trump has taken,

00:04particularly of going ahead and signing this oil deal with Pakistan.

00:08We don't know the terms and conditions just yet,

00:10just that an announcement has been made and a trade deal with Pakistan has also been signed.

00:15Gaurav Samad is joining us live from the newsroom with more on this.

00:19Gaurav, first of all, what really explains the manner in which Trump has become so pally with Pakistan in the last few months?

00:30You know, there are several ways to look at this.

00:32One, is Trump playing a much bigger game?

00:35Pakistan is very, very close to China.

00:37And is Trump attempting to wean Pakistan away from China?

00:43And in case Donald Trump were to play a bigger role or Pakistan inside Pakistan,

00:48it would be a setback to China's investments in Pakistan.

00:52They've sunk more than $30 billion of $60 billion in the China-Pakistan economic corridor.

01:00And there have been absolutely no results.

01:02And if the United States were to get in, it would be a setback for China.

01:05But that may be one part of the story.

01:08The other part, as many see this, Trump may be behaving like a jilted lover.

01:14He expected a trade deal from India.

01:16He's clearly not getting that trade deal on his terms.

01:20And Prime Minister Narendra Modi appears to have dug in his heels on various aspects.

01:25And that is why, is it to spite India that he's cozying up to Pakistan?

01:30Of course, he had been cozying up to Pakistan even earlier.

01:33This is a Trump who's very, very different from the Trump in his first tenure,

01:36who'd accused Pakistan of stealing $33 billion and being involved in the killing of U.S. soldiers in Afghanistan.

01:45So, it's a very different Trump.

01:48He's also got a cryptocurrency deal for his family, according to reports from Pakistan.

01:55He's expecting to perhaps get some oil deals in Pakistan, expecting to get some minerals from Pakistan.

02:03So, a lot of promises have been made to him.

02:06Will they be fulfilled? Remains to be seen.

02:08But also, Gaurav, you know, on the aspect of this oil deal with Pakistan,

02:14it's rather confusing that Trump has agreed to any sort of oil deal.

02:17Again, let me reiterate that we don't know exactly what kind of a deal this is.

02:21But for Pakistan itself, you know, the fact that they talk of massive oil reserves,

02:27is that really the case? Do they have those kind of resources?

02:30You know, Pakistan is, if I may, like Miss Havisham of Charles Dickens' great expectations.

02:42So, there are great expectations that there will be oil,

02:45but then those expectations have been dashed so far.

02:49You know, like Miss Havisham kept waiting to be that bride.

02:54Pakistan is still waiting for that oil.

02:57And remember, it was in 2019, when Imran Khan was the then Prime Minister of Pakistan.

03:03There were these big claims of oil exploration and oil fine in the Indus Basin.

03:10And it was claimed that these are the biggest reserves of oil in Asia.

03:16This was 2019.

03:18In this G Basin, Imran Khan had claimed there was offshore drilling off the coast of Karachi.

03:25Nothing emerged.

03:26But that's one part of the story.

03:2817 attempts have been made.

03:3017 major attempts between 1960 and 2018 by Sun Oil of the United States,

03:36Winter Shell, Germany, Husky, Canada, Petro-Canada, Total, France, Shell, Netherlands.

03:43But there are all but dry holes and non-commercial fines.

03:47So, great expectations, dashed, Miss Havisham still waiting for oil.

03:55Well, you have an interesting comparison there, Gaurav.

03:58But thank you very much for joining us.

04:00So, as Gaurav told you there, for Pakistan, you know, they've constantly said we have oil.

04:04But the reality is that Pakistan themselves import oil in.

04:08So, what exactly is the reality here?

04:10A lot of claims, and we've referred to it as crude claims versus reality.

04:15Here's what we know really about Pakistan's oil resources and these massive reserves that they're talking about.

04:22Well, as far as proven oil reserves are concerned, that's at about 353.5 million barrels.

04:28So, overall, if you look at it globally, if you look at the ranking, Pakistan is at about 52nd place globally.

04:36So, at numbers of global reserves, again, if we were to go ahead and do that comparison,

04:41this is, by the way, of the proven oil reserves, it's about 0.02% of the global reserves.

04:47Obviously, it's not some massive big oil market for the world to tap into looking at these particular numbers.

04:53But beyond that, let's also talk about production versus demand.

04:57We've taken a look at really the proven oil reserves.

05:00As far as production versus demand goes, the daily oil production is at 88,000 barrels a day.

05:07Consumption is 550,000 plus barrels a day.

05:13So, look at the numbers there and the stark, stark difference.

05:1688,000 barrels per day is what's produced versus consumption at 550,000 plus barrels per day.

05:23So, 84% of the demand for Pakistan is actually met through imports.

05:29So, can they actually be talking about a deal with another country?

05:32As far as the offshore potential goes, there have, in fact, been seismic surveys in the offshore Indus basin.

05:40There are indications there that, yes, maybe there are potential reserves,

05:44but there has so far been no confirmation whatsoever.

05:48So, it's a gamble largely at this point.

05:50There has been hints, yes, but no confirmed large discoveries to date,

05:55which is why all that's happening right now is extremely confusing

05:59about why really this kind of an oil deal is being struck.

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