Mari Breaks Production Record, Launches Massive $1 Billion Gas Expansion

ISLAMABAD: Mari Energies posted its highest-ever production level in FY26, 41.28 million barrels of oil equivalent, up from 39.13 MMBOE the year before. The biggest boost didn't come from a new discovery. It came from war-driven disruption to LNG supplies, which opened more room for Mari's gas.

The celebration didn't last. As the Mari Energies gas expansion gathers pace, management confirmed the company lost its SNGPL pipeline connection last month in an incident, a setback that arrived just as production numbers were setting records.

The growth story ahead centers on Ghazij/Shawal, where management expects production to reach 120 million cubic feet per day by the end of FY27 and 222mmcfd by FY28. Long-term, Mari is positioning Ghazij/Shawal as the backfill for its HRL reservoir once that field's output starts declining. The upper ceiling 400mmcfd, sits years away and depends on both HRL depletion and further drilling.

Getting to that 222mmcfd milestone alone will cost roughly $1 billion in capital expenditure over five to six years. Of that, $250 million comes from fertilizer companies; Mari funds the rest. More than 100 wells are planned for the field, with some already drilled.

Security Cuts North Waziristan Potential

North Waziristan's growth story, however, just got smaller. Management cut the potential estimate for the Shewa and Spinwam fields from 300mmcfd to 200mmcfd, citing a gas demand report from the government. Security conditions compound the problem. Restrictions on bringing new rigs into the region limit how quickly Mari can drill even where gas exists.

Also Read: Mari Energies Profit Jumps 34pc to Rs87 Billion, Dividend Hits Rs27

That same security situation is pushing operating costs up to roughly $3.5-4 per barrel of oil equivalent in the affected areas. Management said a new government policy offers an additional 40-cent pricing incentive for qualifying gas discoveries to compensate for elevated security costs, with Spinwam eligible for the benefit.

Two Discoveries Face Delays

Maiwand Block 28, announced back in 2024, still hasn't started production because of security concerns; Mari expects it online within 12-18 months. The Soho field has a different problem: high CO2 content that requires a sweetening plant before commercial gas can flow. Management estimates the required development could take another 24 months, while Mari evaluates alternatives to bring production online sooner.

Mari Pushes Beyond Oil and Gas

Away from oil and gas, Mari's diversification bets are moving forward. The Islamabad data center under the Sky47 project is already operational, and construction has begun on a second facility in Karachi.

Mari reported a 375% reserve replacement ratio, while its combined 2P reserves and 2C contingent resources stood at 1,029 MMBOE, giving the company a substantial resource base for future development. On the operating side: 113,000 BOE a day in actual volumes, against a production capacity of 136,000 BOE. Costs held at $2.24 per BOE company-wide.

The bottom line came in strong too. Operating profit hit Rs82.6 billion. Net profit reached Rs87.1 billion. Dividends worked out to Rs27 per share a 37% payout.

Three pillars anchor where Mari goes next, according to management: minerals through the Tuzgi project, digital infrastructure through Sky47, emissions mitigation through GEM. None of them are small bets. But how quickly they start pulling real weight, while security costs, pipeline risks and drilling constraints complicate Mari's core gas expansion, is the question FY27 now has to answer.