As war disrupts Middle Eastern LNG supplies, OGDC steps up domestic gas production

For years, Pakistan’s largest state-owned exploration and production company had a problem that would have sounded absurd in any normal energy market: it had oil and gas available underground, wells capable of producing more, and yet it was being forced to hold back domestic output because the country had locked itself into imported liquefied natural gas contracts that the pipeline system could not fully absorb.

That equation is now changing. The war around Iran and the disruption of Gulf LNG flows have turned Pakistan’s imported gas surplus into a shortage risk, easing pressure on domestic fields just as Oil and Gas Development Company Limited is trying to lift crude oil production to levels not seen in years. Pakistan had earlier been selling or diverting excess imported cargoes and shutting domestic wells to avoid excess pressure in the gas network, while Qatar and the United Arab Emirates together accounted for almost all of the country’s LNG imports. 

In the first quarter of calendar year 2026, OGDC’s oil and gas production crossed 40,000 barrels per day for the first time in nearly six and a half years, helped mainly by the addition of Baragzai, which is contributing around 6,000 barrels per day. Management has told analysts that output would have been another 2,671 barrels per day higher in the absence of curtailment, largely at Bettani and Nashpa because of pressure constraints in Sui Northern Gas Pipelines Limited’s network. The company is now targeting 48,000 to 50,000 barrels per day by December 2026, even without a major new discovery, after production optimisation measures added roughly 11,000 barrels per day since FY24.