OGDC’s Financial Outlook and Production Challenges Discussed in Analyst Briefing

ISLAMABAD: Oil and Gas Development Company Limited (OGDC) held an analyst briefing session to discuss its financial performance and future outlook amidst declining earnings and ongoing production challenges.

The company reported a 7% year-on-year drop in earnings, amounting to Rs38.3 billion, with an earnings per share of Rs8.91 for the first quarter of the fiscal year 2026. This decline was attributed to a 9% reduction in topline revenue, which stood at Rs96 billion for the same period. The decrease in revenue was largely due to forced production curtailments that impacted revenue by Rs17 billion.

Despite these setbacks, OGDC’s collection rate showed improvement, reaching 109% during the quarter, driven by enhanced recovery of gas receivables at 129%. The company has also drilled more than ten wells, with expectations of promising discoveries in the near future.

In efforts to address the power sector’s circular debt, OGDC is projected to recover outstanding receivables from the Uch Power Plant, currently at Rs59 billion, down from nearly Rs89 billion in December 2024. Collection improvements from Uch have been notable, achieving a rate of 177% in the quarter.

The management discussed ongoing discussions with the government to resolve the gas circular debt, though significant progress remains pending. Key measures needed include reducing forced curtailments and renegotiating RLNG cargoes from Qatar.

Compression projects at Dakhni, KPD-TAY, and Uch are slated for completion in fiscal year 2026, aiming to sustain production levels. However, continued forced curtailments may lead to reduced production of oil, gas, and LPG, with potential industry-wide gas curtailments of up to 250 MMscfd.