Karachi: Pakistan's oil and gas sector is poised for significant earnings growth in the first quarter of fiscal year 2027, driven by higher oil prices and increased production levels. Despite a projected sequential drop, the sector's yearly earnings are expected to rise by 37%, according to an industry analysis.

According to JS Global, Oil & Gas Development Company Limited (OGDC), Pakistan Petroleum Limited (PPL), Pakistan Oilfields Limited (POL), and Mari Petroleum Company Limited (MARI) are all anticipated to report year-over-year increases in their earnings for the first quarter of FY27. The expected rise is attributed to a 26% increase in oil prices, along with a 13% increase in oil production and a 7% rise in gas production compared to the same period last year.

OGDC, PPL, MARI, and POL are expected to see increases in their earnings per share (EPS) to Rs12.35 (+39% YoY), Rs10.48 (+42% YoY), Rs15.16 (+16% YoY), and Rs30.78 (+61% YoY), respectively. Additionally, dividend payouts of Rs4.75 per share and Rs2.75 per share are anticipated from OGDC and PPL, respectively.

However, the sector's earnings are expected to decline by 49% quarter-over-quarter due to the absence of one-off tax reversals recorded in the previous quarter, amounting to Rs77.8 billion, as well as a slight decrease of around 1% in oil and gas production during the first quarter of FY27.