OGDC Faces Rs43B Loss from Gas Curtailment, LNG Surplus
The Oil and Gas Development Company (OGDC) has said that curtailment of gas due to surplus LNG has resulted in an accumulated loss of Rs 43 billion during the financial year 2025.
In a corporate briefing, OGDCL management noted that gas curtailment from SNGPL driven by excess RLNG has resulted in an estimated revenue loss of Rs40-43bn during FY25.
Topline hosted a conference call following the release of FY25 results.OGDCL makes discovery of gas in KPK Province
The company announced its highest-ever dividend in FY25, declaring Rs5/share for the quarter and Rs15.05/share for the full year.
Management noted that gas curtailment from SNGPL, driven by excess RLNG has resulted in an estimated revenue loss of Rs40-43bn during FY25. Had this not been the case, the earnings would have been higher, with hydrocarbon production estimated at 32,709 bopd of oil and 743 mmcfd of gas (compared to the actual volumes of 30,919 bopd and 652 mmcfd),” it said.
Management expects receipt of cash flows from Uch under power sector circular debt resolution very soon. On the gas sector circular debt, management mentioned that the government is taking the issue seriously and a roadmap can be expected this year.
Production from the Wali Block is expected to commence in 2 months with initial flows projected between 25-35 mmcfd of gas and 2500-3500 barrels of oil per day. For FY27, the company has set a production target of 50mmcfd gas and 5000 bopd.
The Spinwam field (35% owned by OGDC) is also expected shortly, following the resolution of line issues that the well is currently facing.
According to the management, the first phase of Abu Dhabi ADNOC block has been completed, with production expected to commence in FY28/29.
Management expects a capex of Rs50-60bn in FY26, excluding the investment in Reko Diq.
High-risk regions such as Balochistan and KPK remain a key exploration focus for the company and the management highlighted that they are actively pursuing licenses in these areas. Despite prevailing security challenges, the company believes there is substantial potential that can be effectively exploited.
OGDC currently has 3 development and compression projects underway (Dakhni, KPD-TAY, and Uch), which together are expected to add around 737 mmcfd of production capacity.
We maintain our BUY stance on OGDC. The company is currently trading at an FY26/FY27F PE of 6.3/6.1x.” Topline said.
