OGDC to pocket Rs87.7bn as circular debt unwinds

August 21, 2025 (MLN): Oil & Gas Development Company (PSX: OGDC) is set to receive a combined Rs87.7 billion in upcoming payments, as revealed during the Pakistan Day Conference 2025 hosted by Topline Securities for foreign investors.

The announcement was made during a dedicated session on OGDC, led by the company’s Chief Financial Officer, Mr. Anas Farook.

As part of the government’s circular debt resolution plan, OGDC expects to receive Rs7.7bn within the next seven days as the second interest instalment against Term Finance Certificates (TFCs) issued by the government, Topline Securities wrote in its report. 

This will reduce the company’s outstanding interest receivables to Rs76.6bn, scheduled to be paid over the next 10 months.

In a parallel development, OGDC is also expected to recover approximately Rs80bn from Uch Power Plant, marking a significant milestone in the broader effort to unlock long-standing receivables across the energy sector.

The conference also highlighted OGDC’s strategic initiatives, including offshore exploration partnerships with U.S. and Turkish firms, the report further added. 

The company has released a dividend of Rs42bn attributable to the government (for 10% of the shareholding). In addition, other liabilities are also being settled.

Management highlighted that while forced gas curtailment persists, the company is working with the government on various options to address this issue, including selling gas to third parties.

The government, in parallel, is also exploring measures such as selling and diverting cargoes. 

To protect oil output from the Nashpa field, the company is coordinating with SNGPL to shift curtailment toward lower oil-yielding fields.

The government is actively working to reduce the backlog of the gas sector circular debt. They are also committed to remaining disciplined on gas price adjustments, in line with IMF requirements, to prevent any further build-up.

As a result, collections from Sui companies have significantly improved to over 85%, according to the management.

Management disclosed that most international lenders for the Reko Diq project are in the final stages of securing board approvals, and financial close is expected by late Sept end or early October.

ADNOC has exercised its option to acquire a 60% stake in Abu Dhabi Block. 

The company has begun focusing on increasing oil production with artificial lift systems through the installation of Electrical Submersible Pumps (ESPs) and other techniques, which will enable them to drain approximately 60-70% of their reserves going forward, compared to the current rate of 30%.

According to management, OGDC currently has a combined oil and gas reserve life of 14 years (without replacement).

However, with an almost 100% reserve replacement ratio, the reserve life is expected to be sustained or even increase going forward.

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