Karachi: Pakistan Petroleum Limited (PPL) has announced a notable financial adjustment and progress in its gas development projects, as detailed in its latest annual report. The report highlights a tax reversal amounting to Rs8.1 billion, linked to a court ruling, alongside significant advancements in domestic gas processing and production projects.
According to JS Global, PPL's annual report reveals a tax reversal of the Super Tax provision following a judgment by the Federal Constitutional Court on January 27, 2026. The company also reported advancement in its collaboration with ADNOC Offshore, where a Front-End Engineering and Design (FEED) study is underway to determine future financial commitments, following PPL's fulfillment of its US$100 million funding obligation.
The Zafir/GPF-III gas processing plant, now 80% complete, is nearing the end of its construction phase. This project had faced delays due to litigation and restricted site access. In another development, regulatory clearance has been obtained for the sale of Hatim gas to SSGCL, facilitating its transition into production. PPL plans to implement a membrane-based CO2 removal unit to treat the low-BTU, high CO2 content gas.
Further expansions are underway at the Shah Bandar block and the Sujawal gas processing facility, enhancing the capacity to manage Pateji discoveries. This expansion is expected to increase production significantly while maintaining a low capital expenditure, benefiting the joint venture involved.
Additionally, the Adhi field's development and production lease has been extended for 12 years, starting November 2024. Meanwhile, Dhok Sultan-3 was brought into production swiftly after discovery, with an 11-year lease granted and preparations underway for an appraisal well.
Operational expenses per barrel of oil equivalent rose to US$4.2/boe from US$3.7/boe the previous year, with the company incurring a cost of Rs3.9 billion for dry and abandoned wells. Despite these expenses, PPL reported a 2P reserves replacement ratio of 102% and a 1P of 119%, with a reserve life of approximately 10 years. JS Global maintains a positive outlook on PPL, recommending a BUY stance with expectations of a favorable future price-to-earnings ratio and dividend yield.