Pakistan has recorded its lowest oil and gas production in more than 20 years, deepening concerns about energy supply security and pressure on foreign exchange reserves.
According to Topline Securities, FY25 saw a double-digit slump in hydrocarbons, with crude oil production down 12% and natural gas slipping 8% YoY. The decline worsened in the last quarter, with oil down 15% YoY and gas down 10% YoY, signaling continued strain on the sector.
Experts point to policy-induced imbalances as the main culprit. Surplus RLNG in the grid, alongside a costly “off-grid levy” on captive gas consumption, pushed electricity generation via gas above Rs4,000/mmbtu, making it more expensive than grid power and cutting demand for local production.
Oil production averaged 62,400 bpd, with major fields — including Makori East, Nashpa, Pasakhi, Maramzai, and Mardankhel — suffering declines. The Tal Block, responsible for 17% of national production, fell 22% YoY in Q4, with Maramzai and Mardankhel output plunging more than 50%.
Gas averaged 2,886 mmcfd, but top-producing fields like Qadirpur and Nashpa shrank by over 30% YoY in the last quarter. Even the Sui field is struggling to maintain output.
The reduced domestic supply forced Pakistan to rely more on imports, costing an additional $1.2 billion in FY25, widening the import bill and exposing the economy to volatile global energy markets.
Looking ahead, forecasts suggest oil production will remain stuck around 58,000–60,000 bpd and gas between 2,750–2,850 mmcfd in FY26. Unless new exploration and production investment materializes, this could mark the third consecutive year of decline.
Industry insiders see a potential turning point in March 2026, when Islamabad is expected to renegotiate its LNG contract with Qatar. Analysts say easing import obligations could create room for local E&P companies to boost production, provided maintenance and capital spending are prioritized.
Meta Description: Pakistan’s oil and gas production hits lowest level in 20 years. Local output drops as RLNG oversupply forces higher imports, costing $1.2bn.
