KARACHI: Pakistan’s hydrocarbon production fell to a two-decade low in FY25, with oil output down 12 per cent year-on-year (YoY) and gas volumes declining 8.0 per cent YoY.
The surplus of regasified liquefied natural gas (RLNG) in the system led to curtailment of local production. The decline was particularly sharp in the fourth quarter, when oil production dropped 8.0 per cent quarter-on-quarter (QoQ) and 15 per cent YoY, while gas output fell 7.0 per cent QoQ and 10 per cent YoY, reflecting persistent strain on the sector, according to the data.
The RLNG surplus was further exacerbated by the diversion of captive industrial users from gas to the national grid, said Sania Irfan, analyst at Topline Securities. The government also imposed an off-grid levy on captive gas consumption at Rs791 per mmbtu — bringing the total cost to Rs4,291 per mmbtu — making gas-based power generation more expensive than grid electricity.
Oil production averaged 62,400 barrels per day (bpd) in FY25, with volumes down between 3.0 per cent and 46 per cent across major fields, including Makori East, Nashpa, Maramzai, Pasakhi, and Mardankhel. The Tal Block, which accounts for roughly 17 per cent of the country’s oil production, saw a steep 22 per cent YoY decline in Q4FY25. Output from key fields in the block such as Maramzai and Mardankhel plunged 54 per cent and 52 per cent YoY, respectively.
Gas production averaged 2,886 million cubic feet per day (mmcfd), with major gas fields including Qadirpur and Nashpa posting YoY declines of 36% and 34% in the last quarter, due to curtailment by Sui companies.
This cutback in local production is estimated to have placed a strain of over $1.2 billion on the country’s foreign exchange reserves during FY25.“We expect production to decline further in FY26, with current oil and gas flows hovering around 58,000-60,000 bpd and 2,750-2,850 mmcfd, respectively,” Irfan said.
However, she added that the government may use the opportunity to renegotiate RLNG pricing with Qatar in March 2026, potentially leading to improved output from domestic exploration and production companies.
