Karachi: Oil and Gas Development Company (OGDC) held a corporate briefing to discuss its financial results for the first half of fiscal year 2026, revealing a 7% year-on-year decline in net sales. According to JS Global, the decline was primarily attributed to reduced hydrocarbon production and lower realized crude oil prices, which fell from $62.57 per barrel in the first half of fiscal year 2025 to $56.32 per barrel in the current period.
OGDC's oil and gas production during this period amounted to 31,848 barrels per day and 626 million cubic feet per day, respectively. This production accounted for approximately 50% of the country's total oil production and 27% of total gas production. The company's management reported ongoing work on the fifth formation of the Baragzai field, with an announcement anticipated within a week. The initial plan involves commencing production from one formation, with a long-term strategy to operate multiple formations simultaneously, which would require additional equipment.
The management expressed optimism regarding the Reko Diq project, noting that work is progressing without delays. OGDC continues to invest significantly, with around $75 million invested by Pakistan Minerals Private Limited during the quarter, translating to approximately $25 million as OGDC's share.
Operating expenses increased by 24% year-on-year during the first half of fiscal year 2026, driven by higher joint operating expenses and personnel costs. The absence of insurance proceeds related to a previous incident in the Tal block also contributed to the elevated costs. The company is awaiting a detailed judgment on the application of the Super Tax, and no provisions have been reversed as a result.
During the period, OGDC spudded five wells, including three exploratory and two development wells, and reported four new oil and gas discoveries. Of six planned development projects, two have been completed, with the remaining four expected to come online over the second half of fiscal year 2026 and fiscal year 2027. These projects are projected to add around 215 million cubic feet per day of gas and 5,342 barrels per day of oil to OGDC's production capacity.
The post OGDC Reports Decline in Net Sales Amid Production Challenges appeared first on Pakistan Business News.