OGDC backs revised Reko Diq funding plan

August 19, 2025 (MLN): The Board of Directors of Oil and Gas Development Company Limited (PSX: OGDC) has approved the execution of two critical agreements, namely the SOE Completion Agreement and the Transfer Restrictions Agreement, as part of the project financing arrangements for the Reko Diq copper and gold mining venture.

These agreements are essential to securing the revised project financing of $3.5 billion, up from the earlier estimate of $3bn, following recommendations from the Independent Technical Consultant of the lenders.

The cost revision reflects a six-month delay in production commencement (now expected in 2029) and additional contingencies.

SOE Completion Agreement establishes a joint and several guarantee from the three Pakistani State-Owned Enterprises (SOEs), OGDCL, Pakistan Petroleum Limited (PPL), and Government Holdings (Private) Limited (GHPL), covering their 27.7778% pro-rata share of RDMC’s secured debt obligations.

This guarantee remains effective until the project achieves financial completion.

Transfer Restrictions Agreement imposes minimum shareholding requirements on project sponsors, including the SOEs, both before and after financial completion, until the project debt is fully repaid.

OGDCL’s pro-rata funding commitment for Phase 1 of the project has been increased to $715 million, up from the previously approved $627m.

After accounting for RDMC’s project financing, OGDCL’s expected shareholder contribution now stands at $391m, compared to the earlier USD 349 million.

The Reko Diq Mining Company (RDMC) is jointly owned by Barrick Mining Corporation (50%, operator), Government of Balochistan (25%: 15% fully funded via Balochistan Mineral Resources Ltd, 10% free carried) and Pakistani SOEs (25% collectively via Pakistan Minerals (Private) Limited).

Despite the cost escalation and timeline shift, the project remains economically viable under the revised assumptions.

All approvals are contingent upon shareholders’ and regulatory clearances.

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