Pakistan’s State Firm Announces New Oil and Gas Discovery — A Boost for Energy Security

Pakistan has taken a significant step forward in strengthening its energy sector with a fresh announcement of oil and gas discoveries by state‑owned companies in the Khyber Pakhtunkhwa province. The developments, seen as pivotal for reducing Pakistan’s reliance on costly fuel imports and enhancing energy security, come amid broader efforts to escalate domestic exploration and production of hydrocarbons.

A Major Find in Kohat

On January 20, 2026, the Oil and Gas Development Company Limited (OGDCL) — Pakistan’s largest state‑owned energy firm — confirmed another substantial discovery of oil and gas at its Baragzai X‑01 (Slant) exploratory well in the Nashpa Block of Kohat district, Khyber Pakhtunkhwa. The well, drilled to a depth of about 5,170 meters, has begun producing hydrocarbons at promising rates, underlining the commercial viability of the find.

According to OGDCL’s statement, the well is currently yielding around 3,100 barrels of oil per day along with 8.15 million standard cubic feet of gas per day, flowing through a 32/64‑inch choke at a wellhead flowing pressure of approximately 3,010 pounds per square inch gauge. This marks the third discovery in the same region over the past month, with combined output from the three wells contributing roughly 9,480 barrels of oil per day — roughly 14.5 percent of Pakistan’s domestic crude production.

Contribution from Joint Ventures

Alongside the OGDCL discovery, Pakistan Petroleum Limited (PPL) also reported a new gas discovery at its Bilitang‑1 exploratory well in the Kohat district, located within the TAL block under a joint venture. The TAL consortium includes MOL Pakistan Oil & Gas Co. B.V. as operator (10 percent stake), OGDCL (30 percent), PPL (30 percent), Pakistan Oilfields Limited (POL) (25 percent), and Government Holdings (Private) Limited (GHPL) (5 percent).

Early data from logging‑while‑drilling (LWD) and wireline logs indicate the Lockhart formation — the exploration target — was successfully tested, with the well flowing gas at about 1.37 million standard cubic feet per day through a 32/64‑inch choke, confirmed at a wellhead flowing pressure of 254 psi. Analysts view this find as a promising sign not only of commercial potential but also of the undiscovered hydrocarbon promise of Pakistan’s northwest region.

Strategic Importance for Pakistan

Pakistan’s domestic energy demand has long outpaced its own production capacity. The country remains heavily dependent on fuel imports, especially for crude oil and liquefied natural gas (LNG), leaving its economy exposed to global price fluctuations and foreign exchange challenges. Expanding local production is therefore a priority for policymakers aiming to enhance energy security and support economic stability.

The recent discoveries in Khyber Pakhtunkhwa — one of Pakistan’s older exploration frontiers — reflect years of sustained efforts by state‑owned and private sector players to unlock indigenous resources. Over recent months, several successful exploration campaigns in this region have yielded results that, collectively, strengthen the domestic hydrocarbon base.

These developments align with Pakistan’s broader energy strategy, which includes revitalising offshore and onshore exploration. Last year, the government auctioned 40 offshore blocks and received 23 bids from local companies and international partners, including Turkey’s state energy company TPAO, underlining growing interest in Pakistan’s prospectivity.

Economic and Industry Implications

The energy sector’s expansion through domestic discoveries like those in Kohat and Bilitang carries implications for Pakistan’s macro economy. Fewer energy imports can help reduce the trade deficit, preserve foreign exchange reserves, and ease pressure on the exchange rate. At the same time, increased oil and gas production can support industrial growth, generate employment in the upstream and downstream sectors, and provide revenue for both the government and energy firms involved.

Joint ventures between state entities like OGDCL and PPL, as well as partnerships with private and foreign firms, also help share exploration risks and costs while utilising technical expertise and capital. These collaborations are vital in deepening Pakistan’s exploration footprint and potentially unlocking more reserves that have yet to be discovered.

Challenges and Next Steps

Despite the promising findings, challenges remain. Commercialising discoveries requires infrastructure investment, development of processing facilities, and connecting output to distribution pipelines. Moreover, the world energy transition, with increasing emphasis on cleaner energy sources, could influence long‑term investment strategies in fossil fuel exploration.

Pakistan must therefore balance its immediate energy needs with sustainable policies that consider environmental objectives and future energy demand trends. Investments in technology, enhanced regulatory frameworks, and incentives for exploration are among the factors that can encourage continued growth of the hydrocarbon sector while aligning with global energy shifts.

Looking Ahead

This series of discoveries underscores Pakistan’s hydrocarbon potential and the importance of sustained exploration efforts. For a country grappling with economic pressures and energy dependency, such breakthroughs contribute tangible optimism — offering a pathway toward greater self‑reliance in energy production and boosting confidence in the domestic energy industry.

As OGDCL and PPL progress toward appraisal, development planning, and potential production scaling, the next phase will test whether these finds can translate into long‑term, commercially‑viable reserves that significantly impact Pakistan’s energy matrix. For now, stakeholders across industry and government will be watching closely as exploration continues and Pakistan moves to harness its own natural resources for economic and energy stability.

-

Ifo