OGDCL's receivables swell to Rs1tr.

ISLAMABAD -- The country's largest state-run hydrocarbon producer, Oil and Gas Development Company Limited (OGDCL), has started feeling the pinch of the ballooning circular debt as its customers have defaulted on payment of around Rs1 trillion.

Total receivables of OGDCL, which plays a critical role in gas supply across the country, have now mounted to Rs968.2 billion. The company's clients have failed to make timely payments, which can impact its future plans for oil and gas search in the country.

In the meantime, state-run Pakistan LNG Limited (PLL) could not secure additional liquefied natural gas (LNG) supply contracts to meet domestic needs as the global market is encountering shortage of gas in the wake of Russia-Ukraine war.

So, the only hope is to push the domestic oil and gas producers to expedite hydrocarbon exploration across the country to quell the growing consumer appetite.

In a relevant initiative, the government has planned to renew the exploration licences of companies that had defaulted or whose licences had been revoked due to litigation with the government.

The objective of the plan is to encourage the discovery of more gas reserves to boost supplies at a time when LNG has gone scarce in the international market.

Even if LNG is made available, Pakistan does not have enough foreign currency reserves to pay for imports, say energy experts.

In such a situation when the government is keen to look for more hydrocarbon deposits, the trapping of the country's largest oil and gas explorer in circular debt has come as a setback.

Moreover, state-run companies cannot operate on commercial terms and are compelled to supply gas to even those state utilities that do not pay bills due to political interference.

Sources told The Express Tribune that the public gas utilities, refineries and power companies were the key defaulters of OGDCL that could not clear their bills.

OGDCL had to receive Rs647.9 billion from different clients on account of gas supply. Of the total, its receivables from Sui Southern Gas Company Limited...