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

4 months ago

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.

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

Category

Transcript

Be the first to comment

Recommended