Turkey and Pakistan Sign Agreement to Explore World’s Fourth Largest Oil Reserve

What Happened?

At the Pakistan Minerals Investment Forum 2025 in Islamabad, Turkey and Pakistan signed an agreement to explore oil and gas deposits off the coast of Pakistan.

According to the new agreement, Pakistan’s Mari Energies Limited, Oil and Gas Development Company Limited, and Pakistan Petroleum Limited, will jointly participate in the offshore bidding round with Turkish state-owned enterprise Türkiye Petrolleri Anonim Ortakl. 

Additionally, Pakistan’s government announced a bidding round for the granting of exploration licenses for the blocks, located in the Makran and Indus basins.

Why it Matters

The new agreement lays the groundwork for the exploration and potential development of an area believed to hold the world’s fourth largest reserves of oil and gas. Only Canada, Saudi Arabia, and Venezuela have proven reserves that are larger. 

If proven to be recoverable, the new reserves are large enough they could change the course of history for Pakistan. Pakistan has struggled to create and sustain an economy capable of meeting the needs of its growing population. The new oil and gas reserves could provide not only a new revenue source but also jobs and infrastructure. 

A major question about the new agreement is, if the reserves are as large as claimed, why have none of the major transnational oil companies moved to develop them? Part of the answer is security. Pakistan continues to be beset with a host of security problems, not least of which is a religious extremist movement that continues to fester not only in the countryside but in Pakistan’s cities as well.

Consequently, setting up and running operations in Pakistan often requires companies to pay a significant amount of overhead for security. Even then, their facilities and personnel are still at risk. 

As Andrew Topf reported for Oil Price, in March 2024, five Chinese engineers were killed in a suicide attack in Pakistan’s northeast. A vehicle rigged with explosives rammed into a bus transporting staff from Islamabad to the giant Dasu dam project in the Khyber Pakhtunkhwa province. The project is part of the $62-billion China-Pakistan Economic Corridor (CPEC). This incident sparked a series of temporary shutdowns across other projects, as well.

Another barrier is that Pakistan lacks the technology or infrastructure for deep sea mining, which would increase the start up costs of a new major effort to recover oil and gas offshore. Still, the promise of future profits may be enough to persuade major oil companies to take a chance on Pakistan, as Turkey is.

How it Affects You

Global demand for oil is forecast to increase steadily over the next decade, which means the race is on across the world. For major oil companies to find and develop new sources of oil and gas that will enable them to meet that demand. For Pakistan, such investments could bring much needed jobs, revenue, and infrastructure which are sorely needed in a country where a quarter of the population lives in poverty.