Pakistan has to import 78% of its domestic oil demand, despite an increase in indigenous production. Reducing the growing gap will require enhanced exploration efforts. The paper evaluates petroleum policy to 1994 against the backdrop of adverse factors and the manner in which these have been addressed. The investment climate could not be more ideal, as the offered package is both fair and handsome - making it an irresistible proposition to foreign investors, It is concluded that the package would prove to be an effective catalyst in enhancing exploration activities.