ISLAMABAD: Pakistan’s petroleum minister on Wednesday invited US companies to take part in a fresh round of oil and gas exploration bids, underscoring growing economic cooperation between Islamabad and Washington after years of strained ties.
Pakistan–US ties have swung between cooperation and distrust over the last decade, with relations particularly frayed under President Joe Biden.
Washington repeatedly pressed Islamabad to crack down on militant sanctuaries in Afghanistan while accusing Pakistan’s intelligence services of maintaining links with the Afghan Taliban, which Islamabad denied. Pakistan, for its part, bristled at being sidelined in US strategy for Afghanistan’s exit in 2021 and later faced criticism over human rights, democracy and nuclear security. The Biden administration’s limited economic engagement and security downgrades added to the estrangement, leaving ties at their lowest point in years before the recent thaw under the second presidency of Donald Trump.
Last month, Trump granted Pakistan a reduced 19 percent tariff rate on exports, one of the lowest in South Asia, and Washington and Islamabad are also currently negotiating investments in rare minerals, hydrocarbons and cryptocurrency, among other areas. Trump also took credit for a ceasefire between India and Pakistan after the Asian neighbors engaged in hostilities in May following an April attack in India-administered Kashmir.
“Talking to the US Chargé d’Affaires Natalie A. Baker in Islamabad, [Minister for Petroleum] Ali Pervaiz Malik emphasized opportunities for international cooperation and investment in the oil, gas and mineral sectors,” state broadcaster Radio Pakistan reported.
Malik welcomed the “strong interest” of US investors in Pakistan’s energy sector, adding that the government was conducting a bidding round for onshore and offshore oil and gas exploration blocks.
“This bidding round is a great opportunity for international partners to invest,” Malik told Baker, according to the report.
The US envoy said American firms were “showing keen interest in Pakistan’s oil, gas and mineral sectors, in line with President Donald Trump’s vision,” Radio Pakistan said.
She added that the embassy would “facilitate direct connections between American and Pakistani companies in the exploration and production sectors.”
The outreach comes as Islamabad seeks to revive its struggling energy sector and broaden sources of foreign investment to shore up its $350 billion economy. Pakistan remains heavily dependent on imported liquefied natural gas to meet domestic demand, straining foreign exchange reserves, while local production of oil and gas has stagnated for years.
BROADER PARTNERSHIP
Pakistan’s finance ministry said in a statement last month following a final round of talks in Washington on a trade deal to lower tariffs and increase investment that the pact “marks the beginning of a new era of economic collaboration especially in energy, mines and minerals, IT, cryptocurrency and other sectors.”
Islamabad described the deal as a marker of a broader partnership with Washington, and Finance Minister Muhammad Aurangzeb, who led the final round of talks, said there was a larger economic and strategic agreement.
“From our perspective, it was always going beyond the immediate trade imperative, and its whole purpose was, and is, that trade and investment have to go hand in hand,” he said, in video-taped remarks after the Washington talks.
Pakistan had faced a potential tariff of 29 percent, which was later suspended — as with other nations — to allow trade talks up to an Aug. 1 deadline.
Islamabad’s trade surplus with Washington was around $3 billion in 2024, mainly due to textile exports. The US is Pakistan’s biggest market for textiles.
Last month, Trump also trumpeted a pact to help develop Pakistan’s oil reserves.
“We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves,” Trump wrote on social media in July.
“We are in the process of choosing the Oil Company that will lead this Partnership.”
In a message on the occasion of Pakistan’s Independence Day on Aug, 14, Secretary of State Marco Rubio said Washington looked forward to exploring cooperation with Pakistan on critical minerals and hydrocarbons.
Pakistan’s Commerce Minister Jam Kamal has said Islamabad will offer US businesses opportunities to invest in mining projects primarily in the southwestern Balochistan province through joint ventures with local companies, providing concessions such as lease grants.
The province is home to key mining projects, including Reko Diq, run by mining firm Barrick Gold, and believed to be one of the world’s largest gold and copper mines.
With inputs from Reuters
