Islamabad 1 August: Oil & Gas Development Company Limited (OGDCL) was expected to start receiving government settlement payments in July 2025 as part of a plan to clear circular debt. Sources now report that the company received an upfront payment of approximately Rs 7 billion today, well in advance of the official instalment schedule.
Last year, the government had approved a payment of Rs 82 billion to address the principal portion of OGDC’s investment in privately placed term finance certificates (PPTFCs), along with interest payments totaling Rs 92 billion. The interest component was set to be disbursed in equal installments beginning in July 2025. As part of this arrangement, OGDC agreed to waive Rs 72 billion in liquidated damages at the government’s directive.
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Investors now speculate that today’s Rs 7 billion transfer may represent the first tranche of that interest obligation. If confirmed, it would mark an early start to the repayment timeline, potentially improving OGDC’s near-term cash flow and enhancing liquidity for dividends or exploration activity.
OGDC Circular-Debt Settlement: At a Glance
| Component | Amount (PKR Billion) | Notes |
|---|---|---|
| Principal (PPTFCs) | 82.0 | One-time government payment approved in June 2024 |
| Interest Payments | 92.0 | To be paid in 12 instalments starting July 2025 |
| Liquidated Damages Waived | 72.0 | At government’s instruction |
| First rumored payment | ~7.0 | Possibly first of 12 interest instalments |
Why this matters
OGDC has been under pressure from accumulated circular debt and delayed receivables. Clearance of principal and interest obligations may unlock funds for exploration and dividends
- The earlier-than-planned payment could signal proactive government intent to rebuild OGDC’s liquidity and boost investor confidence.
