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OGDCL Navigating Challenges and Fueling Pakistan’s Energy Future
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OGDC Navigating Challenges and Fueling Pakistan’s Energy Future

Author saifenergy

Oil and Gas Development Company Limited (OGDC), listed on the Pakistan Stock Exchange (PSX), is the country’s largest exploration and production (E&P) company. With over 40% of the nation’s awarded exploration acreage, OGDC plays a pivotal role in securing Pakistan’s energy independence through its robust portfolio in exploration, drilling, and production.

A Snapshot of OGDC’s Journey (FY19–FY24)

Over the years, OGDC has shown remarkable resilience against industry headwinds such as maturing oil fields, price volatility, and economic uncertainty. Its profitability has closely mirrored international oil price trends, currency fluctuations, and operational efficiencies.

 

OGDCL Navigating Challenges and Fueling Pakistan’s Energy Future

Key Highlights:

  • FY19: Revenue soared by 27%, and net profit surged by 57% due to favorable crude oil prices and exchange rate gains.
  • FY20: COVID-19 and global oil shocks caused a 15% dip in profits.
  • FY21: Recovery began with a 9.3% rise in profits driven by increased crude production and reduced exploration costs.
  • FY22–FY23: Benefited from high oil prices, currency devaluation, and exploration success. However, super tax and operational cost inflation impacted net margins.
  • FY24: Revenue rose by 12%, but profits declined by 7% due to rising operating costs and falling crude prices.

 

OGDCL Navigating Challenges and Fueling Pakistan’s Energy Future

Latest Performance: 9MFY25 Analysis

In the first nine months of FY25, OGDC’s earnings declined by 24% year-on-year due to:

  • A 10% drop in crude prices.
  • Lower oil and gas output (down 4% and 8% YoY, respectively).
  • A strengthening Pakistani Rupee, impacting export earnings.
OGDCL Navigating Challenges and Fueling Pakistan’s Energy Future

However, the company made four new discoveries and spudded eight new wells, demonstrating its commitment to exploration. Despite declining production, OGDC still contributes:

  • 49% of national oil output
  • 28% of gas
  • 34% of LPG

Its diversification strategy also includes:

  • A 25% equity stake in the Reko Diq copper-gold project
  • Investments in Abu Dhabi Offshore Block-5
  • Progress toward tight and shale gas extraction

A third interim cash dividend of Rs3 per share reflects strong shareholder returns and stable cash flows.

OGDCL Navigating Challenges and Fueling Pakistan’s Energy Future

Looking Ahead: A Positive Outlook

Despite a historic production low in FY25, the future appears promising for OGDC and Pakistan’s E&P sector:

  • Gas tariff reforms have improved cash flows across the industry.
  • 13 new exploration blocks were awarded under the 2025 bid round—3 to OGDC.
  • Security improvements in Balochistan open new opportunities in underexplored areas.
  • Investment in infrastructure and field revitalization is expected to curb natural decline and revive output.

While overall sector earnings may dip due to lower prices, dividend payouts are likely to increase, fueled by stronger liquidity and cost recovery.

Conclusion: OGDC Remains the Pillar of Energy Security

OGDC’s commitment to operational excellence, exploration expansion, and diversification makes it a cornerstone of Pakistan’s energy security. Despite global and local headwinds, the company’s ability to adapt and evolve ensures it remains a key player in shaping Pakistan’s energy future.

Namibia Offshore Exploration and Lessons for Pakistan
Categories Blog

Namibia Offshore Exploration and Lessons for Pakistan

Author saifenergy

Namibia Offshore Exploration and Lessons for Pakistan

Namibia’s offshore exploration history offers a remarkable case study for nations like Pakistan aiming to unlock their hydrocarbon potential. Both countries have faced challenges in establishing offshore oil and gas production despite promising geological settings. By examining Namibia’s approach and outcomes, Pakistan can identify actionable strategies to rejuvenate its offshore exploration efforts.

Namibia’s Offshore Exploration Journey: Key Phases and Insights

  1. Early Licensing Rounds (1969–1979)

Namibia initiated its offshore exploration in 1969, awarding eight blocks during the first licensing round. The Kudu Gas discovery (Kudu 9A-1) by Chevron, Regent, and SOEKOR marked the first gas find in the Orange Basin. However, UN sanctions in the late 1970s halted international participation, with rights transferred to the nascent national oil company, SWAKOR.

2. Renewed Exploration Efforts (1987–1990)

With collaboration from Halliburton, SWAKOR conducted seismic surveys and drilled additional wells (Kudu 9A-2 and 9A-3). Despite limited success, the groundwork was laid for modern exploration techniques and resource assessment.

  1. Post-Independence Licensing Rounds (1990s)
  • Namibia launched a series of licensing rounds from 1991 to 1999, awarding blocks to international players like Shell, Chevron, and Sasol.
  • Exploration activity surged with over 88,000 km of 2D seismic data collected and multiple exploratory wells drilled. While discoveries were elusive, critical insights into basin geology were gained.
  1. Open Licensing System and Modern Discoveries (1999–Present)

The adoption of an open licensing system in 1999 attracted numerous global operators, including Shell and TotalEnergies. Key outcomes included:

  • Enhanced seismic data acquisition with advanced 2D and 3D surveys.
  • Significant light oil discoveries in 2021/2022 by Shell Namibia (Graff-1) and TotalEnergies (Venus-1X.T1) in the Orange Basin.

 

Namibia Offshore Exploration and Lessons for Pakistan

Figure courtesy to NVENTURES.

Pakistan’s Offshore Exploration: Challenges and History

  1. Early Attempts (1960s–1980s)

Pakistan’s offshore exploration began in 1963, with Sun Oil drilling three wells in the Indus Delta. Subsequent efforts in the 1970s and 1980s by Wintershall, Marathon, and OGDCL revealed limited success. Key findings included gas shows in the Miocene and shaly source rocks beneath the Deccan volcanics.

  1. Exploration Stagnation (1990s–2010s)

Despite the discovery of gas at Pakcan-1, efforts by international operators such as Total Energies, Oxy, and PPL yielded no major breakthroughs. The most recent well, Kekra-1 (2019), drilled by ENI, failed to confirm commercially viable resources.

  1. Current State

Pakistan’s offshore remains underexplored, with technical challenges, governance issues, and a lack of consistent policy direction deterring investment.

Namibia Offshore Exploration and Lessons for Pakistan

Lessons from Namibia for Pakistan

  1. Persistence and Long-Term Vision
    Namibia’s success came after decades of effort and numerous dry wells. Pakistan must adopt a similar mindset, understanding that significant discoveries often require persistence over time.
  2. Investor-Friendly Policies
    Namibia’s transparent regulations and open licensing system encouraged international participation. Pakistan must revise its offshore policies to offer competitive fiscal terms, ensuring clarity and fairness for foreign investors.
  3. Data-Driven Exploration
    Namibia invested heavily in seismic data acquisition and geological modeling, reducing exploration risk. Pakistan should prioritize similar initiatives, including basin analog modeling and leveraging advanced seismic technologies.
  4. Strategic Partnerships
    Collaboration with supermajors like Shell and TotalEnergies brought cutting-edge technology and expertise to Namibia. Pakistan should foster partnerships with global leaders in offshore exploration.
  5. Political and Economic Stability
    A stable environment is crucial for attracting and retaining investors. Pakistan must focus on creating a favorable business climate, addressing governance issues, and ensuring policy continuity.
  6. Technology and Innovation
    Namibia’s adoption of advanced 2D and 3D seismic methods proved pivotal. Pakistan should invest in modern exploration technologies to improve success rates.

Conclusion: A Path Forward for Pakistan

 Namibia’s offshore journey illustrates the power of resilience, innovation, and collaboration in unlocking hydrocarbon potential. By drawing inspiration from Namibia’s approach, Pakistan can chart a path toward energy security.

Key steps include fostering an investor-friendly ecosystem, prioritizing data acquisition, and engaging with international experts. With sustained efforts and strategic planning, Pakistan’s offshore potential can transform into a vital resource for the nation’s energy needs.