Pipeline limits, plant shutdowns held back MariEnergies’ record year Record Production Capacity Meets System Constraints Mari Energies Limited says its fields had the capacity to deliver more gas and oil during FY2025-26, but pipeline constraints and unexpected plant shutdowns prevented additional volumes from reaching the market. Forced curtailment remained a recurring issue throughout the year. According to management, the shortfall between available capacity and actual production was not primarily a reservoir problem. Instead, limitations across the gas transmission and offtake system restricted the company’s ability to fully utilise its producing assets. Peak Production Highlights Untapped Capacity MariEnergies recorded average production of 113,090 barrels of oil equivalent per day (BOEPD) during the year. On June 29, however, the company’s assets reached a record single-day production level of 132,043 BOEPD. The gap between the daily peak and the annual average provides an important indication of the company’s available capacity. Management argues that the ability to reach more than 132,000 BOEPD demonstrates that the underlying fields and production infrastructure can support higher output when the system is able to absorb it. Mari sold 41.28 million barrels of oil equivalent during FY26, representing an increase of 5 percent. Gas sales reached 305 billion cubic feet, while liquids sales stood at 537,385 barrels. Despite these record or near-record volumes, the company says actual production remained below what its assets could have supplied because of curtailment. Customer Shutdowns Added to the Curtailment Problem Offtake constraints were not limited to pipelines. Fertilizer plants, power stations and other customers periodically reduced their gas nominations when their own facilities shut down unexpectedly or underwent operational interruptions. When a major customer goes offline, producers can be left with limited options for additional gas supply, particularly when storage and alternative evacuation routes are unavailable. Pipeline capacity provided another major constraint. A producer cannot increase deliveries if the downstream transmission network is operating at capacity, damaged or experiencing an imbalance. The result was a situation in which production capacity remained available while market demand and evacuation infrastructure were unable to consistently absorb it. Profit Rises Despite Operational Headwinds MariEnergies still delivered a strong financial performance in FY26. Net profit increased 34 percent to Rs87.1 billion from Rs65.1 billion, while net sales rose 8 percent to Rs191.7 billion. Earnings per share improved to Rs72.52 from Rs54.25, and return on equity increased to 29.31 percent from 26.23 percent. However, operating profit increased by only 1 percent to Rs82.6 billion from Rs81.4 billion. The numbers suggest that the company’s strong bottom-line performance was not simply the result of higher production volumes. Higher Costs and Curtailment Weigh on Operations A full-year royalty under Rule 35 of the onshore petroleum rules added approximately Rs8.5 billion to costs during the year. Curtailment also affected the utilisation of available capacity. Production assets that remained ready to operate could generate little or no additional revenue when pipelines or customers could not accept their output. Chairman Lt Gen Anwar Ali Hyder (retd) highlighted security concerns, circular debt, pipeline capacity, geopolitical developments and changing macroeconomic conditions as part of the broader operating environment. Managing Director Faheem Haider described the company as resilient during a difficult year while continuing to support national energy requirements. The situation highlights a recurring challenge in Pakistan’s gas sector: domestic producers can be encouraged to increase supply during shortages but subsequently face restrictions when demand falls, customers shut down or the transmission network becomes constrained. Security Risks Further Complicate Gas Evacuation Operational constraints were also linked to security conditions in Khyber Pakhtunkhwa and Balochistan, where Mari continues to develop frontier assets. The company said it maintained close coordination with law-enforcement agencies and local communities as employees and facilities operated in challenging areas. Security incidents also affected evacuation infrastructure. SNGPL line ruptures following security incidents disrupted routes through which gas could be transported. This means a producing field can remain technically healthy while still becoming commercially stranded if the pipeline network downstream is unavailable. Reserves Growth Supports Long-Term Production Despite the operational limitations, MariEnergies continued developing new production streams and expanding its resource base. Spinwam and Shams were brought into production during the year, adding further volumes to the national gas system. Development activity also continued at Mari, Sujawal, Shewa and other fields. The company’s 2P plus 2C reserves and resources increased to 1,029 million barrels of oil equivalent from 952 million. Its 2P reserves replacement ratio reached 375 percent, while reserves life increased to 21 years. These figures provide an important counterpoint to concerns about underutilised production capacity. If pipeline and offtake constraints ease, Mari appears to have a substantial resource base from which to increase future production. Dividend and Investment Plans The board has proposed a final cash dividend of Rs18.70 per share, equivalent to 187 percent. An interim dividend of Rs8.30 per share has already been paid, taking the total FY26 dividend to Rs27 per share compared with Rs21.70 in the previous year. The resulting payout ratio stands at 37 percent. Shareholders will vote on the proposed payout at the company’s 42nd annual general meeting, scheduled for September 25 at Serena Hotel, Islamabad. The share transfer books will remain closed from September 22 to September 25. Rs76bn Investment Supports Diversification MariEnergies spent Rs76 billion on investing activities during FY26, including expenditure related to mining and technology. The company also contributed approximately Rs129 billion to the national exchequer. Its importance to Pakistan’s fertilizer industry remains significant, with Mari supplying gas supporting more than 90 percent of the country’s urea production. Cabinet approval for the supply of Ghazij gas to the fertilizer sector, if fully implemented, could further reinforce Mari’s role in supporting food security. Minerals and Data Infrastructure Expand the Business MariEnergies is also pursuing diversification beyond its traditional oil and gas operations. The company is developing minerals-related opportunities in Chagai and has highlighted Karakoram-01, described as Pakistan’s first purpose-built, AI-ready data centre, as part of its technology expansion. At the same time, the company reported zero Tier-I process safety events during the year and maintained
