VIS Credit Rating Company Limited has reaffirmed the long-term and short-term entity ratings of Oil & Gas Development Company Limited (OGDC), highlighting the state-owned energy company’s robust financial position, strong liquidity, and strategic significance for Pakistan’s economy. The rating agency maintained OGDC’s long-term rating at AAA and its short-term rating at A1+, both reflecting negligible credit risk and a very strong capacity to meet financial obligations. The outlook on these ratings remains stable, VIS noted, citing OGDC’s risk profile as only marginally higher than that of Pakistan’s sovereign debt.
OGDC, Pakistan’s largest exploration and production company, has been a cornerstone of the country’s oil and gas sector for decades. Established in 1961 and converted into a public limited company in 1997, the company was listed on the Pakistan Stock Exchange in 2003 and subsequently on the London Stock Exchange through Global Depository Shares in 2006. The Government of Pakistan continues to hold a dominant stake of just over 85 percent.
Despite production constraints and fluctuations in global crude oil prices during FY25, VIS highlighted OGDC’s financial resilience. The company accounted for nearly half of the country’s crude oil production, over a quarter of natural gas output, and more than one-third of LPG production. Strong liquidity conditions were restored following government measures to address energy sector circular debt, including recovery of Rs82 billion in June 2024 from term finance certificates issued by Power Holding (Private) Limited. Accrued interest of Rs92.7 billion is scheduled to be repaid in twelve equal monthly installments starting July 2025, helping reverse receivable buildups and strengthening cash flows.
VIS also emphasized OGDC’s debt-free balance sheet and low leverage as major strengths supporting its rating. The company continues to contribute significantly to the national exchequer through taxes, royalties, dividends, and other levies, while reducing Pakistan’s dependence on imported energy.
While OGDC faces exposure to inter-corporate circular debt, particularly involving state-owned gas entities, the associated credit risk is assessed as low due to strong cash reserves and liquid assets. The rating agency further noted steady progress on strategic investments, including the Reko Diq mining project and the Abu Dhabi Offshore Block 5, which are advancing in line with expectations.
The reaffirmation of OGDC’s AAA rating underscores investor confidence in the company’s financial discipline, operational resilience, and its critical role in supporting Pakistan’s energy security and economic stability.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.