OGDC completes Reko Diq feasibility study, confirms $627mn investment

Oil and Gas Development Company Limited (OGDC) has announced the completion of the feasibility study for the Reko Diq Project, confirming its investment of $627 million as part of the project’s overall capital expenditure of $5.6 billion. 

The company disclosed this development through a notification to the Pakistan Stock Exchange (PSX) on Tuesday in compliance with Section 96 of the Securities Act, 2015 and Clause 5.6.1(a) of PSX Regulations. 

The company’s share in the project is 8.33%, part of a collective 25% held by three Pakistani state-owned enterprises, with the remaining 25% of the project held by the Government of Balochistan and 50% by Barrick Gold Corporation, the project’s operator.

The project, which is located in Balochistan, will be developed in two phases, with Phase 1 involving a capital investment of $3 billion to be financed through a limited-recourse project financing facility, while the remainder will be funded through shareholder contributions. 

The Reko Diq Project, with its significant copper and gold reserves, is expected to yield 13.1 million tonnes of copper and 17.9 million ounces of gold over its 37-year life, which is set to begin in 2028.

The updated feasibility study projects an annual processing capacity of 45 million tonnes in Phase 1, which will increase to 90 million tonnes annually in Phase 2 by 2034. 

With the approval of the updated plan, the OGDCL’s board has authorised the company to proceed with the financing arrangement, which will include contributions from both the shareholders and additional project financing.

OGDC is optimistic about the financial performance of the project, citing the favorable projections for copper and gold prices. The company’s board has confirmed that the project financing will support the necessary capital outlay while ensuring the continued viability of the project over the long term.

Following the announcement, OGDC’s stock showed a positive response on the Pakistan Stock Exchange (PSX). As of 01:49 pm on March 25, 2025, the company’s stock price rose by Rs 6.02, or 2.76%, reaching Rs 224.19 per share. This uptick suggests investor confidence in the completion of the feasibility study and the progress of the Reko Diq project, reflecting optimism about the project’s potential to boost OGDC’s financial performance.