OGDCL to recover Rs80bn from Uch Power under debt resolution

Company updates investors at Pakistan Day Conference 2025, eyes offshore, Reko Diq progress

Islamabad: Oil and Gas Development Company Limited (OGDCL) is set to recover Rs80 billion from Uch Power Plant as part of the government’s ongoing power sector circular debt resolution, the company disclosed during the Pakistan Day Conference 2025 organized by Topline Securities for foreign investors.

Addressing the session, OGDCL Chief Financial Officer Anas Farook outlined key financial and operational developments, including debt recoveries, offshore exploration prospects, and steps to sustain production. He confirmed that OGDC expects to receive a second interest instalment of Rs7.7 billion against Term Finance Certificates (TFCs) issued by the government within the next seven days, reducing the outstanding interest liability to Rs76.6 billion, which is scheduled for settlement over the next 10 months.

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Farook said OGDCL has already released Rs42 billion in dividends attributable to the government, which holds a 10% stake in the company. He added that other liabilities are also being cleared under the circular debt adjustment framework.

On the operational side, management highlighted persistent gas curtailment issues but said the company is working with the government on alternatives, including third-party gas sales. The government, in parallel, is exploring measures such as cargo redirection and sales to ease supply pressures. To protect production, OGDCL is coordinating with SNGPL to shift curtailment away from high oil-yielding fields like Nashpa and toward lower-yielding sites.

The CFO also stressed that government collections from Sui Northern and Sui Southern companies have improved to over 85% following strict adherence to gas price adjustments in line with IMF commitments, which has helped curb further debt accumulation in the sector.

In terms of exploration, OGDCL disclosed it is in talks with several US-based petroleum and services firms as part of its offshore bidding round and has signed a memorandum of understanding with Turkish Petroleum for joint participation in offshore blocks. The company also reported progress in Abu Dhabi, with ADNOC exercising its option to acquire a 60% stake in Abu Dhabi Block.

Farook further revealed that financing for the Reko Diq project is advancing, with most international lenders nearing board approvals. Financial close is expected by late September or early October, paving the way for one of Pakistan’s largest mining ventures to proceed.

To enhance recovery from existing reservoirs, OGDC has begun deploying artificial lift systems such as Electrical Submersible Pumps (ESPs). Management said these technologies could enable the company to extract 60–70% of reserves, compared to the current recovery rate of just 30%.

Looking ahead, the company estimated its combined oil and gas reserve life at around 14 years without further discoveries. However, with an almost 100% reserve replacement ratio in recent years, OGDC expects to sustain or even extend its reserve life.

The CFO told investors that these measures, along with disciplined debt management and exploration partnerships, position OGDC to remain a cornerstone of Pakistan’s energy sector while contributing to fiscal stability.

The Pakistan Day Conference 2025, aimed at foreign investors, featured discussions on energy, debt resolution, and reform priorities. For OGDC, the session highlighted not only its operational resilience but also the government’s broader push to resolve sectoral debt, stabilize supplies, and attract international capital to energy projects.