Circular debt, gas curtailments key risks to Mari Energies financial performance: WealthPK

ISLAMABAD: Mari Energies is making strides with new gas discoveries and expansion into energy and technology, yet rising circular debt and gas supply cuts are weighing on its financial performance, reports WealthPk.
Mari Energies has expanded its presence in Pakistan’s energy sector with gas production from Shewa wells in Waziristan and four new discoveries at Spinwam-1, emphasizing the region’s hydrocarbon potential. Since March 2025, its Early Processing Facility has supplied up to 70 MMscfd of gas and 700 BPD of condensate to SNGPL, with additional output from Shah Bandar Block contributing 17.6 MMscfd and 298 BPD. Despite these gains, operational and financial challenges remain a concern for sustained growth.
Moreover, circular debt remains a key threat to the company’s financial stability, with trade debts reaching Rs72.7 billion as of March 31, 2025, due to rising receivables, particularly from Sui Southern Gas Company.
Therefore, the company continues to face cash flow and liquidity challenges due to delayed payments from Sui Northern Gas Company. These delays are affecting investments, disrupting ongoing projects, and limiting new developments, which could slow the company’s growth and impact the wider energy sector.
During 9MFY25, Mari Energies reported a 2% decline in sales volumes, driven by frequent gas curtailments from distribution companies. The curtailments also threaten long-term well performance, prompting the company to collaborate with government stakeholders to improve resource utilization. These disruptions, along with lower prices and production, reduced net profit to Rs46.3 billion from Rs51.6 billion. Furthermore, external factors, including oil price fluctuations and currency changes, further cut revenue by around Rs7 billion.
As a result, the company is addressing operational challenges by adding 65 MMscfd of gas from new drilling while expanding into tech and mining. Similarly, the company is building a 5 MW data center in Islamabad and exploring copper and gold in Balochistan to diversify revenue and support growth.
Moreover, Mari Energies is expanding its focus beyond hydrocarbons by promoting climate-resilient practices through a Memorandum of Understanding with the National Disaster Risk Management Fund.
The company’s participation in the COP-28 Decarbonization Charter and methane reduction training showcases its commitment to environmental responsibility, reinforcing its role as a sustainable leader in Pakistan’s energy sector.
Mari Energies’ situation highlights the urgent need for energy sector reforms in Pakistan. Addressing circular debt and ensuring reliable gas offtake are key to the company’s success and the country’s economic and energy stability.