Press Release

VIS Reaffirms Entity Ratings of Oil & Gas Development Company Limited

Karachi, December 20, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Oil & Gas Development Company Limited (OGDCL) at 'AAA/A-1+' (Triple A/A-One Plus). Medium to long term rating of 'AAA' denotes 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 'A-1+' denotes highest certainty of timely payment; short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding and safety is just below risk free Government of Pakistan’s short-term obligations. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on December 23, 2022.

OGDCL, which is the national oil and gas company of Pakistan stands as a preeminent leader due to its highest exploration acreage, oil and gas reserves and production output in the Country. The Company was established in 1961 as a Public Sector Corporation and converted as a Public Limited Company in 1997. The Company made its debut on the Pakistan Stock Exchange in 2003 and expanded its reach to the London Stock Exchange in 2006. Business operations primarily involve exploration, development and production of oil and gas resources in Pakistan, as well as related activities. Its major clients are refineries, gas distribution companies and power generation companies.

"The assigned ratings take into account ownership structure of OGDCL, as majority shareholding is held by the Government of Pakistan (GoP). All nominations on the Board of Directors are made by the GoP. In line with best practices, at least one-third of the board comprises independent directors. Ratings also incorporate low business risk profile of the Company, as evident from robust margins, providing considerable cushion against volatility in international oil prices. Assessment of financial risk profile exhibits low-risk, maintaining a debt-free capital structure and a strong liquidity position. While rising trend of inter-corporate debt within the industry remains a concern, the Company's trade debts, which are largely owed by the GoP owned/controlled entities are considered to have very low credit risk, from a national scale rating purview.

In view of natural depletion of oil and gas resources as well as to augment reserves base, OGDCL remains focused on its exploration-led growth strategy. Furthermore, in line with its business diversification plan, the Company has entered into definitive agreements with the Federal Government, Government of Baluchistan, GHPL, PPL and Barrick Gold Corporation for extraction of gold and copper reserves from Reko Diq. Moreover, planned exploration and evaluation activities are underway in offshore block-5 in Abu Dhabi. MOUs have also been signed with various industry players to explore opportunities in green field refinery, hydrogen and geo-thermal energy for business sustainability."

For further information on this ratings announcement, please contact the undersigned at 021-35311861-64 (Ext. 207) or email at

Sara Ahmed

Applicable Rating Criteria: Corporates

VIS Issue/Issuer Rating Scale

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