Oil & Gas Development Company Limited (OGDC) reported a record profit after tax of Rs242 billion for FY26, up 43 percent year-on-year, partly supported by a one-off tax reversal, as the country’s largest exploration and production company outlined ambitious plans to grow production and reserves at its Annual General Meeting (AGM). Shareholders also approved a total dividend of Rs17 per share for FY26, including a proposed final cash dividend of Rs6 per share.
Management stated that OGDC drilled 23 wells during the year and made nine discoveries, marking its strongest exploration performance in a decade. Among these, the Baragzai discovery was described as a significant breakthrough, reportedly delivering more oil than the company’s cumulative discoveries over the previous nine years. OGDC maintained its dominant position in Pakistan’s upstream energy sector, accounting for nearly 50 percent of domestic crude oil production and more than 25 percent of the country’s natural gas output during FY26.
Despite the strong financial performance, management noted that gas curtailment remained a major challenge, resulting in estimated revenue losses of Rs65 billion and an earnings impact of approximately Rs9 per share during the year.
The company also shared updates on future growth projects. The Bettani development well is expected to add 85 million cubic feet per day (mmcfd) of gas production by 2028. OGDC further revealed that it has drilled Pakistan’s first pilot horizontal shale gas well, underscoring its focus on unlocking unconventional energy resources.
Management highlighted the company’s robust reserve base, reporting proved and probable (2P) reserves of around 857 million barrels of oil equivalent (MMBOE). The reserve replacement ratio was reported at approximately 236 percent, with potential to reach 400 percent.
Looking ahead, the company plans capital expenditure of about Rs157 billion, significantly higher than the previous year’s projection of Rs109 billion. Management emphasized the need for strengthened procurement oversight to ensure efficient execution of the investment program.
Regarding the Baragzai field, OGDC expects production to gradually increase to between 20,000 and 25,000 barrels of oil per day (bopd) over the next two to three years, subject to the development of five formations and the drilling of multiple wells.
On circular debt, management said the Ministries of Petroleum and Finance, oil and gas companies, and the International Monetary Fund (IMF) are in ongoing discussions to develop a sustainable, mutually beneficial resolution framework.
The company also reiterated its commitment to social development, noting that it allocates 1% of pre-tax profit to corporate social responsibility (CSR) initiatives in producing areas, with further details in its annual report.
On the Reko Diq mining project, management said progress has slowed because of security concerns. Major contract awards are now expected around June 2027. OGDC’s investment in the project has exceeded US$180 million, while total shareholder investment has reached approximately US$2 billion.
According to market analysts, OGDC’s strong reserve replacement, successful exploration campaign and planned production growth position the company to benefit from Pakistan’s ongoing efforts to enhance domestic energy supplies and reduce dependence on imported fuels.
Courtesy: Ahl Research Ltd
