OGDCL receives Rs 7.725 billion eighth installment under circular debt plan

ISLAMABAD:Oil and Gas Development Company Limited (OGDCL) received Rs7.725 billion as its eighth straight monthly interest instalment from Power Holding Private Limited under the federal government’s circular debt settlement plan, the company disclosed on Wednesday.

The company disclosed the development in a notice submitted to the Pakistan Stock Exchange (PSX) on Wednesday.

According to the filing, the total interest amount of Rs92 billion is being repaid in twelve equal monthly instalments starting from July 2025. With the latest payment, OGDCL has now received eight instalments under the agreed schedule. The company had earlier confirmed receipt of its seventh instalment of Rs7.725 billion on January 24, 2026.

“As part of the circular debt settlement plan, OGDCL has received the eighth installment, being one of twelve equal monthly installments of Rs 7.725 billion, as interest payment from Power Holding (Private) Limited (PHL), pursuant to the Government of Pakistan (GOP) approved mechanism, said OGDC in a letter dated 25th February, 2026 to General Manager, Pakistan Stock Exchange Limited.  

The receipt of this instalment reflects continued progress under the GOP’s initiative to address circular debt in the energy sector,” the company said in its statement.

The circular debt settlement plan was approved in 2024 as part of broader government efforts to stabilise the energy supply chain and improve liquidity across state-owned energy enterprises. Under the arrangement, the government cleared Rs82 billion to OGDCL as principal, representing the company’s investment in Privately Placed Term Finance Certificates (PPTFCs) issued by PHL.

In addition to the principal repayment, the government committed to pay Rs92 billion in interest through twelve equal monthly instalments commencing July 2025.

The timely disbursement of interest payments is seen as critical for strengthening OGDCL’s cash flow position and enabling it to sustain exploration and production activities amid ongoing fiscal and energy sector reforms.

Incorporated on October 23, 1997 under the Companies Ordinance, 1984 — now governed by the Companies Act, 2017 — OGDCL was established to undertake exploration and development of oil and gas resources. The company carries out production and sale of hydrocarbons and continues activities formerly managed by the Oil and Gas Development Corporation, which was created in 1961.