ISLAMABAD: Mainly due to the forced closure of gas fields under government decisions and the impact of lower global prices, Pakistan’s largest oil and gas producer has been witnessing a continuous decline in profitability over the past three quarters.

One of the country’s top profit-earning entities, Oil and Gas Development Company Ltd (OGDCL), on Monday reported a 17 per cent decline in its profit-after-tax (PAT) at Rs34.7 billion for the second quarter (October-December) of FY26 against Rs41.44bn in the same period of last year.

The profit was also down by about 9pc when compared to Rs38.3bn of the preceding quarter ending Sept 30, 2025. As such, the company’s cumulative PAT for 1HFY26 dropped by 11pc to Rs73bn, compared with Rs82.5bn in the first half of FY25.

The company’s financial data showed its profit has been on a sliding scale from Rs47.2bn PAT for the quarter ending March 2025, followed by Rs40.3bn in the last quarter of the last fiscal ending June 2025, further down to Rs38.3bn for the quarter ending September 2025, and finally Rs34.7bn for the quarter ending December 2025.

Forced gas field closures, lower global prices hit Pakistan’s top oil and gas producer

All this was mainly due to the closure of the domestic gas field, as the power sector declined to lift imported LNG as originally committed, forcing gas utilities, particularly SNGPL, to order OGDCL to close its gas fields to overcome a supply glut in the pipeline network. The company’s production losses from these curtailments exceeded Rs36bn.

The state-run firm politely put on record before its board of directors that “the production curtailments during the period adversely impacted daily net production by 3,384 barrels of oil, 152 million cubic feet (mmcf) of gas, and 51 tonnes of LPG”.

Based on these outcomes, the OGDCL’s board of directors on Monday declared a second interim cash dividend of Rs4.25 per share (42.50pc), the company said in a statement. It said the board announced the financial results for the half year ended Dec 31, 2025, and declared “the highest-ever second quarterly dividend in the company’s history”.

This brings the cumulative interim dividend for the half year to Rs7.75 per share, representing the highest-ever half-year payout by the company, it added. OGDC posted net sales revenue of Rs192.83bn and profit after tax of Rs73.019bn, translating into earnings per share (EPS) of Rs16.98.

“The half-year results reflected the impact of forced production curtailments by SNGPL and UPL (Uch Power Ltd) due to system load constraints, along with a lower average crude oil basket price, partly offset by higher realised gas prices and exchange rate movement.

During the period, the company contributed Rs120bn to the national exchequer through corporate tax, dividends, royalties, and other government levies, while its oil and gas production generated estimated foreign-exchange savings of $1.4bn through import substitution.

Average daily net saleable production during the half year stood at 31,848 barrels of crude oil, 626 mmcf of natural gas, and 636 tonnes of LPG, compared with 31,477 barrels, 672 mmcf and 629 tonnes, respectively, in the corresponding period last year.

The production curtailments during the period adversely impacted daily net production by 3,384 barrels of oil, 152 mmcf of gas, and 51 tonnes of LPG. Operationally, OGDC spud five wells during the period, and sustained exploration efforts led to four oil and gas discoveries, further strengthening the company’s resource base.

The company also secured petroleum exploration rights over eight offshore blocks in the October 2025 bidding round. On the development front, Jhal Magsi Project was successfully commissioned and is currently producing around 14 mmcfd of gas along with condensate, while Dakhni Compression Project has been completed ahead of schedule.

Other key compression projects are progressing as planned. The impact on sales revenue, amounting to Rs36.468 billion primarily due to lower production volumes and reduced realized crude oil and LPG prices, was partially offset by higher realised gas prices and exchange rate movement.

Collections improved considerably, with gas receivables collection reaching 156pc and overall receivables collection standing at 125pc, reversing the previous build-up trend. Building on its sustainability journey, OGDC is reinforcing its Environmental, Social and Governance (ESG) strategy, advancing climate-related disclosures and integrating ESG considerations across its operations and value chain.

The board appreciated the management’s continued focus on operational performance, financial discipline and shareholder returns, which enabled the declaration of the highest-ever second-quarter and half-year dividend while maintaining OGDCL’s leadership position in Pakistan’s exploration and production sector.

Published in Dawn, February 24th, 2026