Sir, Your input on this thread, would be highly appreciated.
Honorable Khafee,
The reason for my post was to only point out that it is incorrect to assume that 20-billion reserve will last 123 years as the demand rises every year as well.
IMO this more than likely to be a gas field. However, I would prefer to refrain guessing on the probable reserve size in the absence of any concrete data because that is pure speculation. Even though the cost of production & transportation makes offshore crude & gas manifold more expensive than from onshore deposits and the GOP's share & the royalties would probably amount to less than half of the revenue depending upon the licensing agreement; any decent discovery of 1-billion bbl oil equivalent or more is a bonanza for an energy-starved country.
A word of caution is however in order. Arab Gulf states such as Kuwait, Qatar, Abu Dabi have a local population of less than 3-million (much less in fact), therefore even the reserves of the size of Kuwait would not make a country with a 210-million nationals very rich.
Additionally, permit me to explain the reason why Venezuela, a country with 300-billion bbl of oil but is in extremely bad shape.
The problem started with Hugo Chavez. In a way, he was another ZA Bhutto in his policies. He won the election on the promise of eliminating the very rich and sharing the Venezuelan riches with all the Venezuelans. His party (United Socialist Party of Venezuela) was formed in 1997 and won the election in 1999 making Hugo Chavez the President.
He nationalized virtually all the major private enterprises. Instead of creating new job opportunities, Chavez started wholesale recruitment of staff into the national oil company Petroleos de Venezuela ( PDVSA) to provide jobs. However, the income of Venezuela remained the same because of the quota restriction of the OPEC and oil was the primary source of revenue. Nicolas Maduro who took over as President of the country after the death of Chavez in 2013 continued with the same policies.
As long as the oil prices remained close to the $100 per bbl mark, there was no problem as there was sufficient income from the oil exports. However, international oil price fell from $115 per bbl in June 2014 to $35 at the end of February 2016. Gov't could not raise additional revenue from taxation to make up the shortfall because most of the corporations were gov't owned and surviving on the gov't subsidy due to overstaffing. Oil prices are still at around $65 per bbl. Both the Chavez and Maduro had been at odds with the USA for a few years and when you add the effect of the US sanctions to the low oil price, you come up with disaster.
I am not suggesting that Pakistan will become another Venezuela. The purpose of the above over-simplified explanation of Venezuelan economic ills is to point out that one cannot rely on natural resources alone and that economic progress is essentially dependent upon the quality of the human resource.
Let them celebrate & wait for the Good.
