Pakistan’s oil and gas exploration sector delivered strong financial results in the third quarter of FY2026, posting profits of Rs92 billion as higher crude prices and reduced costs supported overall performance. The sector recorded a 24 percent increase compared to the previous quarter and a modest 1 percent rise year-on-year, reflecting stable growth despite broader economic challenges.
Total revenues reached Rs232 billion during the quarter, rising 7 percent quarter-on-quarter and 1 percent compared to the same period last year. This growth was largely driven by a 23 percent surge in oil prices, with Arab Light crude averaging $80.38 per barrel, significantly higher than the previous quarter’s average of $65.37 per barrel.
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Meanwhile, operational efficiency improved as exploration expenses declined by 10 percent year-on-year, mainly due to reduced drilling of unsuccessful wells. Only one dry well was reported during the quarter, compared to two last year, indicating more targeted exploration activity and better resource allocation by companies within the sector.
However, other income dropped 23 percent year-on-year to Rs19.7 billion, mainly due to lower interest rates and exchange losses following currency appreciation. At the same time, finance costs fell 16 percent to Rs3 billion, while cumulative costs for the first nine months declined sharply, benefiting from a more favourable interest rate environment.
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The sector also gained from a reduced effective tax rate, which declined to 28 percent from 32 percent a year earlier, partly supported by tax adjustments. Among key players, Oil and Gas Development Company Limited reported mixed results with lower yearly earnings but strong quarterly growth, while Pakistan Petroleum Limited posted a slight annual decline due to higher operating costs.
In contrast, Mari Petroleum Company Limited recorded significant earnings growth supported by higher income and a sharp drop in its tax rate, while Pakistan Oilfields Limited also posted solid gains driven by improved income streams and lower taxation, highlighting varied performance across the sector.