Press Release
VIS Reaffirms Entity Ratings of Oil & Gas Development Company Limited
Karachi, January 08, 2026: VIS Credit Rating Company Limited (VIS) reaffirms entity rating of Oil & Gas Development Company Limited (‘OGDCL’ or ‘the Company’) at ‘AAA/A1+’ (Triple A/A one plus). Medium to long term rating of ‘AAA’ indicates Highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. Short term rating of 'A1+' indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings remain ‘Stable’. Previous rating action was announced on December 04, 2024.
OGDCL was established in 1961 as a public sector corporation and was subsequently converted into a public limited company in 1997. In 2003, the Company was listed on the Pakistan Stock Exchange (PSX), and its Global Depository Shares commenced trading on the London Stock Exchange in December 2006. OGDCL’s core business comprises the exploration, development, and production of oil and gas resources, along with related activities. The Company is a leading entity in Pakistan’s oil and gas sector in terms of exploration acreage, reserves, and production contribution. The Government of Pakistan (GoP) is the principal shareholder, currently holding an 85.02% stake in the Company.
Despite forced production curtailments as well as volatility in crude oil prices during FY25, OGDCL maintained a strong financial position. The Company’s core product mix contributed 49%, 28%, and 34% towards country’s total crude oil, natural gas, and LPG production, respectively. The Government of Pakistan’s initiative to address the circular debt issue led to the recovery of Rs 82 billion in June 2024, representing the principal amount of the Company’s investment in Privately Placed Term Finance Certificates issued by Power Holding (Private) Limited. The total accrued interest of Rs 92.718 billion is scheduled to be repaid in 12 equal monthly installments commencing in July 2025. Overall, the receivables buildup trend reversed during the year, thereby improving liquidity profile.
The ratings also reflect the Company’s strong financial risk profile, supported by a debt-free balance sheet and low leverage. The Company is a significant contributor to the national exchequer through corporate taxes, dividends, royalties, and government levies. In addition, its oil and gas production also contributes to foreign exchange savings by reducing reliance on imports. Despite exposure to inter-corporate circular debt, primarily involving state-owned gas entities, Company’s liquidity position remains strong, as the associated credit risk is considered low. Liquidity is further bolstered by substantial cash balances and liquid assets on the balance sheet. Development activities related to the Company’s strategic investments in the Reko Diq Mining Project and the Abu Dhabi Offshore Block 5 Project are progressing as planned.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf