OGDC faces hurdles in unlocking Baragzai oil potential: report
- Management also highlighted the production potential of the Rajian field
OGDC faces infrastructure hurdles limiting Baragzai field potential, while exploring Rajian's heavy crude and diversifying into geothermal lithium extraction. The company maintains production growth targets and significant CAPEX.
- Infrastructure limitations hindering Baragzai field's full production potential.
- Rajian field's significant heavy crude production potential.
- High lithium concentrations discovered in geothermal well.
- OGDC's strategic diversification into geothermal and minerals.
- New offshore exploration partnership with Turkish Petroleum.
Oil and Gas Development Company Limited (OGDC), Pakistan’s largest E&P company, is facing infrastructure constraints that could limit its ability to unlock the full production potential of its Baragzai field.
OGDC management disclosed the development during an analyst briefing held to discuss the financial performance of FY26 and 1QFY27 and the future outlook on Friday, read a report from Arif Habib Limited (AHL).
The company plans to drill additional wells at the field; however, facility constraints at Lashari need to be addressed to unlock further production, according to takeaways from OGDC’s analyst briefing.
Management also highlighted the production potential of the Rajian field, which could yield between 8,000 and 10,000 barrels per day, “with heavy crude (11-12° API) requiring arrangements with suppliers and refineries before production can be ramped up”.
OGDC expects progress over the next 1-1.5 years.
“Management expects annual capital expenditure to remain above Rs100 billion over the next two years, broadly in line with the current year. Actual spending may vary by -25%, depending on tender outcomes and supply costs,” read the report.
OGDC maintained its FY27 guidance for oil and gas production growth of 8-10% year-on-year, despite natural field declines of around 16%, operational challenges and pipeline disruptions.
Management also discussed its efforts to diversify into unconventional resources and other energy-related opportunities, including geothermal energy and minerals.
“Initial testing at the Wahid Bakhsh-01 geothermal well indicated lithium concentrations above international benchmarks, prompting OGDC to assess the potential for commercial extraction. The company has partnered with INSTEC to map potential wells and evaluate samples, with results expected within three months,” read the AHL report.
Separately, Turkish Petroleum has joined OGDC’s offshore exploration venture, with seismic activities expected to begin within the next couple of weeks, management said.