OGDC earnings drop 19% on lower output, oil prices
Pakistan’s largest E&P firm reports PKR 184.8 billion FY25 profit, down from last year
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Oil and Gas Development Company Limited (OGDC), Pakistan’s largest state-owned exploration and production firm, reported a 19% year-on-year decline in its unconsolidated earnings for the fiscal year 2024-25, citing production curtailment, lower oil and gas prices, and a net revenue loss of PKR 43 billion.
The announcement came during an analyst briefing , where the company’s senior management discussed its financial performance and outlook.
OGDC posted a net profit of PKR 184.8 billion (earnings per share: PKR 39.50) for FY25, down from the previous year.
The drop in profitability was primarily attributed to a 7% decline in oil production, which averaged 30,900 barrels per day, and a 9% decline in gas production to 652 million standard cubic feet per day (MMscfd).
The company said production was impacted by operational curtailments and market dynamics.
The average net realized oil price during the fiscal year dropped to USD 60.83 per barrel, compared to USD 68.67 in FY24. Meanwhile, the average realized gas price rose slightly to PKR 730.38 per Mcf from PKR 712.88.
Despite the earnings decline, OGDC remains a dominant force in Pakistan’s energy sector, holding 49% of the country’s recoverable oil reserves and 31% of its recoverable gas reserves as of June 30, 2025.
In terms of current production, OGDC contributes 49% of the country’s oil output, 28% of gas, and 34% of LPG.
Exploration and new discoveries
OGDC continued to pursue its exploration-led growth strategy during FY25, acquiring 750 kilometers of 2D and 1,051 square kilometers of 3D seismic data, accounting for 34% and 74% of the national total respectively.
The company also drilled 15 wells, including nine exploratory and five development wells.
The efforts yielded five new oil and gas discoveries across Punjab, Sindh, and Khyber Pakhtunkhwa. These include Chak 202-1, Baloch-2 (Sembar), Bettani-2 Salant, Soghri North-1, and Faakir-1.
OGDC currently holds interests in 54 operated and joint venture licenses, along with participation in 14 blocks managed by other exploration and production (E&P) companies.
Outlook and sector developments
The company remains optimistic about cash flow improvement through expected payments from Uch Power, subject to final settlement details.
OGDC management also indicated that a high-level government committee is working toward resolving the petroleum sector’s circular debt—a persistent issue undermining liquidity in the energy value chain.
The company is actively engaged with the government on imported RLNG-related curtailments and expects positive developments in the near term.
OGDC is also pursuing offshore and onshore exploration partnerships with U.S. firms, though no specific agreements have been finalized.
In Abu Dhabi, the company concluded the first phase of its exploration program at the PIOL block, where discoveries have already been announced.
Production is expected to commence by FY29 in collaboration with ADNOC.
OGDC plans to spend PKR 50-60 billion on two to three major domestic projects in FY26 and an additional USD 50 million on the Reko Diq mining project.
Management reaffirmed its commitment to achieving the government’s budgeted dividend targets, noting that FY25 marked the highest-ever dividend payout in the company’s history.
The company also highlighted Balochistan as a key province for upcoming exploration activities, with positive results anticipated from newly awarded licenses.
Industry analysts believe OGDC’s short-term financial softness is largely cyclical, while its long-term fundamentals remain solid.
“Despite the drop in earnings, OGDC’s aggressive exploration efforts and international engagement show that the company is preparing for a rebound,” said an energy sector analyst. “Resolving circular debt and securing strategic foreign partnerships could unlock significant upside in the next few years.”
He also noted that OGDC’s dominance in reserves and production provides it with a strong buffer during commodity price downturns.
“With 49% of the country’s oil reserves under its belt, OGDC remains the cornerstone of Pakistan’s energy security,” he added.
Comments
See what people are discussing