Pakistan’s untapped Shale reserves back in focus

July 31, 2025 (MLN): Pakistan is sitting on vast shale oil and gas resources, with new data reaffirming the long-term potential of the Indus Basin.

According to a landmark study by the U.S. Energy Information Administration (EIA) and Pakistan’s Ministry of Petroleum, the country holds an estimated 105 trillion cubic feet (Tcf) of recoverable shale gas and approximately 9 billion barrels of shale oil.

The bulk of this potential lies in the Lower and Middle Indus Basin, spanning key regions of Sindh, southern Punjab, and parts of Balochistan. However, despite the scale, commercial development remains on hold due to cost and infrastructure challenges.

State-run energy giants OGDC and Pakistan Petroleum Limited (PPL) remain central to any future shale push.

Both companies have access to large exploration blocks in shale-rich zones and have already undertaken pilot exploration work, including studies supported by USAID and EIA.

OGDC previously drilled a test well in the Indus Basin, but deemed the project commercially nonviable under current economics.

Still, with global energy markets shifting and Pakistan pushing for import substitution and energy security, analysts see shale as a strategic long-term play.

If the government moves to incentivise shale exploration, through pricing reforms, infrastructure investment, or foreign collaboration, OGDC and PPL could emerge as primary beneficiaries, given their existing footprint and technical capacity.

U.S. President Donald Trump’s latest announcement for Pakistan could mark a strategic opportunity, not just to reduce energy imports, but to draw lessons and potential partnerships from a revitalized U.S. shale narrative.

OGDC’s past test well in the Indus Basin was shelved due to economic viability concerns, but with rising global focus on energy security and potential U.S. interest in fostering international shale cooperation, the outlook may shift.

If the government revisits pricing structures, builds infrastructure, and welcomes foreign expertise, Pakistan’s shale reserves could evolve into a long-term gamechanger,  with OGDC and PPL at the centre of it.

For now, the shale story is still in its early chapters, but with global energy winds turning favorable, Pakistan’s unconventional reserves may soon command the attention they deserve.

What is shale oil and gas?

Shale is a fine-grained sedimentary rock formed from mud, silt, and clay minerals. Unlike conventional reservoirs, shale formations are dense and have low permeability, meaning oil and gas do not flow easily through them.

However, these rocks can still hold significant quantities of hydrocarbons, mainly natural gas (known as shale gas) and crude oil (referred to as shale oil), trapped within their tiny pore spaces.

To extract these resources, companies use advanced techniques like hydraulic fracturing (commonly known as fracking) and horizontal drilling. In this method, high-pressure fluids are injected into the rock layers to create fractures, allowing the trapped oil or gas to flow into the wellbore and be brought to the surface.

This process has unlocked vast energy reserves in countries like the United States, turning it into a leading global energy producer.

For Pakistan, shale represents a major untapped opportunity. With confirmed reserves in the Indus Basin, these resources could significantly reduce the country’s dependence on imported fuels.

However, shale extraction is capital-intensive and requires specialized infrastructure and expertise, which remains a key barrier to large-scale development for now.

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