PPL Pockets Rs8.1bn Tax Relief, Set to Triple Pateji Gas

KARACHI: Pakistan Petroleum Limited (PPL) wrote back Rs8.1 billion in super tax provisions in the final quarter of FY26. The reversal landed just as a string of the company's long-stuck gas projects started moving again.

What triggered PPL super tax reversal

PPL's super tax reversal followed the Federal Constitutional Court's January 27 short order on Sections 4B and 4C of the Income Tax Ordinance. The bench upheld the levy as constitutional. It also told tax commissioners to issue fresh notices to exploration companies working under petroleum concession agreements, and to apply the tax without breaching the caps those agreements set.

The gain fed into a net profit of Rs97.68 billion for the year ended June 30, up 9% from Rs89.95 billion. Earnings per share rose to Rs35.90. The board added a Rs6 final dividend, taking the full-year payout to Rs12 a share against Rs7.5 in FY25.

The bigger story sits in the field.

Zafir, Hatim and Pateji gather pace

At Zafir, the 60 MMscfd gas processing plant, GPF-III, stands about 80% complete. Litigation and restricted site access held the project back earlier. Crews now work on the final leg of construction.

At Hatim, the regulator cleared the sale of gas to Sui Southern Gas Company, opening a route to production. The gas carries low heating value and heavy carbon dioxide, so PPL plans a membrane-based CO2 removal unit. A contractor will build, operate and maintain it.

Also Read: PPL Strikes Again: Fourth Consecutive Shah Bandar Discovery Sparks Fresh Energy Hopes

In the Shah Bandar block, Jhim East now produces about 10 mmcfd. PPL is also expanding the Sujawal processing facility to take in gas from the Pateji discoveries. The upgrade adds roughly 30 mmcfd of capacity and builds on the existing plant, which keeps the joint venture's spending low. Once it comes online, Pateji output should climb from about 7 mmcfd to around 25 mmcfd, more than tripling flows.

Older acreage got a lifeline too. PPL secured a 12-year renewal of the Adhi development and production lease, effective November 13, 2024. At Dhok Sultan, the company put the Dhok Sultan-3 discovery on stream within two months, won an 11-year lease, and has started preparing the Dhok Sultan-4 appraisal well.

The Abu Dhabi bet

Abroad, ADNOC Offshore has launched the front-end engineering design (FEED) study and aims to finish it next year. That study will decide how much more money the partners must commit. PPL has already met its full US$100 million funding obligation.

PPL leads Pakistan International Oil Limited, the vehicle that holds Abu Dhabi's Offshore Block 5, a 6,223 square kilometre concession about 100 kilometres north-east of Abu Dhabi city. PPL, OGDCL, Mari Energies and Government Holdings each own 25%.

Costs bite, reserves hold

Not every number moved in PPL's favour. Operating cost rose to US$4.2 per barrel of oil equivalent in FY26 from US$3.7 a year earlier, an increase of about 14%. Dry and abandoned wells cost the company Rs3.9 billion.

Reserves held firm. PPL replaced 102% of the 2P reserves it produced during the year and 119% on a 1P basis, leaving roughly a decade of reserve life in the ground.

The brokerage tracking the company kept its BUY call on the stock. It values PPL at 5.0 times projected FY27 earnings, with a dividend yield of 6.9%.

For investors, the next twelve months come down to execution. Zafir has to finish construction. Hatim needs its treatment unit. Pateji waits on the Sujawal upgrade. If all three deliver, PPL turns years of delayed work into flowing gas.