Oil and Gas Development Company Limited’s circular debt has hit Rs. 701 billion and is continuing to expand, as revealed in a meeting of the Senate Standing Committee on Petroleum.
Senator Muhammad Abdul Qadir chaired the meeting.
Oil and Gas Development Company Limited (OGDCL) briefed the committee, stating that the accounts receivable against federally-owned companies such as the Sui Northern Gas Pipeline Ltd. (SNGPL) and the Sui Southern Gas Company (SSGC) were growing at an alarming rate. The principal amount of debt is Rs. 531 billion, and the rest took the form of a late payment surcharge (LPS).
The committee discussed its concerns for OGDCL’s waning profits despite it being a major shareholder in exploration initiatives for locally-produced oil and gas deposits.
It had earned a profit of Rs. 100 billion in FY 2020, which was a significant reduction from the profit of Rs. 124 billion it had earned in FY 2014.
OGDCL told the committee that it has been unable to launch exploration activities in the Kholu blocks in Balochistan and in other blocks in Khyber Pakhtunkhwa over the last 24 years.
It recently discovered gas and condensate in the Hangu Formation block at Wali 01 Well in FR Lakki, Khyber Pakhtunkhwa.
The Petroleum Division had OGDCL five blocks to last month to boost the discoveries of oil and gas deposits.
