ISLAMABAD: Forced production curtailments by the Sui Northern Gas Pipelines Limited (SNGPL) and UPL continued to drag down the Oil and Gas Development Company Limited’s (OGDCL) in the first quarter of fiscal year 2026-27 output. The restrictions slashed average daily net production by 1,254 barrels of crude oil, 94 mmcfd of gas and 5 tonnes of LPG, costing the company an estimated Rs9.7 billion in lost sales revenue.
While significant, this is a notable improvement from the Rs19.3 billion revenue hit recorded in the same period last year. The OGDCL noted that, without these constraints, daily net production for the quarter would have reached 36,748 barrels of crude oil, 826 mmcfd of gas and 701 tons of LPG, the company stated.
Gas demand is expected to rise sharply during winter, with demand on the SNGPL network projected to double from around 550 million cubic feet per day (mmcfd) to 1,100 mmcfd, according to a report.
On Friday, OGDCL’s Board reported a profit after tax of Rs58.5 billion for the quarter ended September 30, 2026, an increase of 53 percent over the corresponding quarter last year. The Board of Directors, at its meeting in Islamabad, approved the financial results and declared a first interim cash dividend of Rs5.00 per share (50 percent), the highest first-quarter dividend in the Company’s history, up from Rs3.50 per share a year earlier.
Net sales revenue rose 38 percent to Rs132.4 billion from Rs96.2 billion in the corresponding quarter last year, while profit after tax increased to Rs58.5 billion from Rs38.3 billion, lifting earnings per share to Rs13.60 from Rs8.91. The improvement was driven by higher production volumes and stronger realised prices, partly offset by continued forced production curtailments and the appreciation of the rupee against the US dollar. Collections against billings stood at 100 percent for the quarter. OGDCL contributed Rs82 billion to the national exchequer through taxes, dividends, royalties and levies, and its indigenous oil and gas production saved the country an estimated USD 1.32 billion in foreign exchange through import substitution.
Production grew in all three streams. Average daily net saleable production rose 13.3 percent to 35,494 barrels of crude oil, 14.2 percent to 732 MMcfd of natural gas and 10.5 percent to 696 tonnes of LPG, compared with 31,315 barrels, 641 MMcfd and 630 tonnes, respectively, in the corresponding quarter last year.
Growth was supported by the connection of four new wells—Maru-3, Sono-10, Chak 63-5 and Bobi-11—to the production gathering system. Electrical submersible pumps installed at four wells added 1,630 barrels per day of crude oil. The Company also completed 26 workover jobs to sustain production and arrest the natural decline in mature fields.
Average realised crude oil and gas prices increased to USD 74.90 per barrel and Rs796.08 per Mcf, respectively, compared with USD 57.61 per barrel and Rs718.38 per Mcf in the corresponding period.
On the exploration front, the OGDCL acquired 31 line-km of 2D and 213 sq. km of 3D seismic data. Seismic acquisition was affected by security constraints, adverse weather, and supply chain disruptions. The Company spudded Bitrism NW-1 and Nahiyoon-1 and achieved total drilling footage of 17,348 metres. Nahiyoon-1, a horizontal pilot well targeting the Sembar shale, marks OGDCL’s first step in assessing Pakistan’s unconventional gas potential, alongside an ongoing regional tight gas evaluation study.
Investment to sustain production and improve recovery continued. Construction and mechanical works on the Uch Compression Project are complete, with commissioning underway and performance testing to be completed in stages by December 2026. The KPD-TAY Compression Project is at an advanced stage and is targeted for completion by March 2027. The Kunnar-Pasakhi Water Injection Project, the Company’s first step towards systematic enhanced oil recovery, is also targeted for completion by March 2027. It is expected to improve recovery by 8-10 percent and extend the economic life of the fields by seven to eight years. Work is also progressing on the Rajian Heavy Oil Facility Project and a mature asset revitalisation initiative targeting additional recovery and longer asset life.
The company continued to advance its diversification initiatives. In Abu Dhabi Offshore Block-5, exploration and appraisal studies are underway, alongside front-end engineering design for the development of the Bu Dana, Al Bateen and Al Manhal fields, with first production targeted for 2028. At Reko Diq, the operator is reviewing the project’s security situation, capital requirements, financing, scope and timelines, which may result in changes to estimated costs and schedules. OGDCL remains engaged with the operator, co-shareholders and the government on this strategic investment.
The OGDCL has identified lithium in geothermal brine at Wahid Bakhsh-1, with laboratory analysis by PINSTECH recording a concentration of 291 mg/L, a level comparable to leading geothermal lithium brines internationally. These are preliminary findings; assessment of lithium potential in adjacent water formations and of the commercial viability of geothermal resources is underway and will inform future development plans.
During the quarter, the Board approved OGDCL’s first sustainability-related financial disclosures prepared in accordance with IFRS S1 and IFRS S2. The Company also established directorate-wise performance indicators and measurable targets under its Board-approved ESG Strategy and conducted an ESG awareness session for supply chain partners. These measures support its commitments under the Oil and Gas Decarbonisation Charter and the UN Environment Programme’s Oil and Gas Methane Partnership 2.0, which OGDCL became the first Pakistani company to join.
Copyright Business Recorder, 2026
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