Mari Energies Limited (“Mari” or the Company”) formerly Mari Petroleum Company Limited (MPCL), is a public limited company incorporated in Pakistan and was listed on the Pakistan Stock Exchange Limited in 1994.

Mari traces its origins to the discovery of the Mari Gas Field in 1957 by the Pakistan Stanvac Petroleum Project (PSPP), a joint venture between Esso Eastern Incorporated (USA) with a 51% stake and the Government of Pakistan holding 49%. In 1983, Esso Eastern divested its entire stake to the Fauji Foundation, paving the way for the establishment of Mari Gas Company Limited (MGCL) in 1984. The shareholding structure initially comprised Fauji Foundation and the Government of Pakistan each holding 40%, while Oil & Gas Development Company Limited (OGDCL) held the remaining 20%.

In 1985, MGCL formally took over the assets, liabilities, and operational management of the Mari Field, commencing operations under the Mari Gas Wellhead Price Agreement (Mari GPA). The company reached a pivotal milestone in 1994 when the Government of Pakistan divested 50% of its shares and the Company became listed on all stock exchanges of Pakistan.

Following the amendment in Mari GPA in 2001 allowing MGCL to broaden its operational horizon by acquiring oil and gas exploration licenses outside Mari field, the acquisition of Ziarat Block in January 2003 marked its transition from a field-specific gas seller to an exploration and production entity. Reflecting its diversified operations and growth, the company was rebranded as Mari Petroleum Company Limited (MPCL) in 2012.

In 2013 the Company set up its own inhouse services division comprising of a 3D seismic data acquisition unit, a 2D/3D seismic data processing center and a fleet of three onshore drilling rigs, thus becoming a fully integrated E&P company. Since its inception, the Company had been operating on a cost-plus fixed return formula under Mari GPA 1985. Pursuant to consistent efforts by the Management, a major milestone was achieved in November 2014 when Economic Coordination Committee of the Cabinet approved replacement of the Mari GPA with an international crude oil price linked market-oriented gas price formula. This allowed the Company to operate on commercial and competitive terms to realize its full potential. In October 2015, the Company opted for conversion of Mari D&P lease to 2012 Petroleum Policy which enabled it to qualify for the price incentives offered by the Government on production enhancement initiatives and new exploratory efforts. With rigorous efforts of the management, in early 2021 the cap on company’s dividend distribution was removed by the government, enabling the Company to declare Dividends in accordance with industry best practices. In August 2021, Mari, together with other leading E&P companies in Pakistan, jointly established the Pakistan International Oil Company (PIOL), which was awarded Offshore Block 5 in Abu Dhabi by the UAE government, which opened international investment avenues for the Company.

Mari’s core activities include oil and gas exploration and production. The gas produced is supplied to fertilizer manufacturers, power plants, and gas distribution companies, while crude oil and condensate are delivered to refineries and other commercial customers for further processing. The Company holds 7 development and production (D&P) leases and 17 exploration licenses as an operator and participates in 6 D&P leases and 16 exploration licenses as a non-operating partner. This is in addition to Mari’s investment in PIOL for offshore block 5 in Abu Dhabi. Mari has a production capacity of over 120,000 barrels of oil equivalent per day. Mari through its integrated services division also provides E&P services such as 2D/3D seismic data acquisition, seismic data processing, gravity and magnetic surveys, drilling and mud logging services. Mari and its wholly owned subsidiary (Mari Mining (Pvt) Limited) have acquired three exploration licenses in Chaghi area of Balochistan for mineral mining where exploration activities are initiated. Few more applications are also being pursued for mineral mining exploration licenses int the area.

The Company boasts a robust ownership structure, with Fauji Foundation holding a 40% stake. The Government of Pakistan and Oil & Gas Development Company Limited (OGDCL) each maintain a 20% share, while the remaining 20% is publicly traded on the Pakistan Stock Exchange, distributed among corporate and individual investors.

Mari's ownership structure underscores its strong institutional and sovereign patronage ensuring long term strategic stability. Since the Company’s inception, its shareholders have remained consistent—a testament to their shared vision and alignment with the Company’s objectives. The Company's sustained success is largely attributed to its stable and committed ownership, which continues to drive its growth and innovation and has enabled it to diversify across various segments of the energy value chain.

The Company’s key stakeholders form a dynamic partnership that leverages their combined expertise and resources, empowering Mari to drive sustainable growth, foster innovation, and contribute to Pakistan's energy sector development. Fauji Foundation (FF) exemplifies exceptional business acumen through its strategic investments across diversified sectors, including agriculture, infrastructure, energy, food, and financial services. This broad portfolio not only funds extensive welfare and social initiatives but also underscores FF’s robust financial foundation, visionary leadership, and adept management. The Foundation's strategic approach to investments and its long-term vision significantly contribute to Mari’s stability and ability to pursue its strategic objectives.

The Government of Pakistan (GoP) plays a pivotal role by ensuring policy alignment and national support, fostering a conducive environment for ensuring stability in the energy sector hence allowing Mari to meet its strategic objectives. Oil & Gas Development Company Limited (OGDCL), as Pakistan’s leading exploration and production (E&P) company, significantly augments Mari’s capabilities with its technical expertise and industry leadership. With a commanding market share—46% in crude oil production, 28% in natural gas, and 37% in LPG—OGDCL provides unmatched operational strength.

The financial strength of Fauji Foundation (FF) as the largest shareholder, coupled with its management right, along with GoP and OGDCL as key shareholders of Mari, constitutes a critical pillar supporting the Company’s success and growth trajectory. Mari benefits from substantial hydrocarbon reserves, a robust equity position, cash reserves by positioning itself with enhanced operational freedom and flexibility. This financial strength supports strategic investments in adjacent sectors such as mining, renewables and technology, aligning with the company's long-term growth objectives and diversification strategies.

The Board of Directors (BoD) of the Company comprises eleven members, including one executive director being the Chief Executive Officer (CEO) of Mari. The composition of the Board reflects the Company’s shareholding structure, ensuring balanced representation and alignment with stakeholder interests.

Fauji Foundation (FF) is represented by four directors, while the Government of Pakistan (GoP) and Oil & Gas Development Company Limited (OGDCL) are each represented by two directors. Additionally, in line with the Code of Corporate Governance the Board has three independent directors, including a female director.

The members of board of director bring valuable experience from their respective fields, which enables strategic oversight and strong governance for the Company. The Board has been instrumental in driving the Company’s growth and progress, implementing initiatives that emphasize sustainability and innovation across the Company. Lt Gen (Retd) Anwar Ali Hyder: As Chairman of Fauji Group companies, including Mari, and the Managing Director & CEO of Fauji Foundation since April 2024, Lt Gen Anwar Ali Hyder, HI(M) (Retd), brings a wealth of experience in strategic planning, organization, and administration. His distinguished career includes serving as the Principal Staff Officer to the Chief of Army Staff in the role of Adjutant General of Pakistan. He has also contributed to national economic initiatives as a member of the Apex Committee of the Special Investment Facilitation Council (SIFC). His exceptional leadership and expertise play a crucial role in shaping Mari's strategic vision. His dedication to service has been recognized with the Chief of Army Staff Commendation Card and the esteemed Hilal-e-Imtiaz (Military) awarded by the President of Pakistan.

The Board comprises a distinguished group of seasoned professionals with expertise spanning a broad spectrum of industries, including energy, oil and gas, finance, governance, and public administration. These leaders bring unparalleled knowledge in fiscal and macroeconomic policy, energy sector development, corporate governance, strategic leadership, mergers and acquisitions, operational excellence, and technical innovation.

Board members hold prominent positions in reputable organizations and actively contribute to Mari’s governance by serving on key committees, such as Audit, HR&R, Technical, Investment, and ESG. Their collective experience and diverse perspectives provide robust oversight, strategic guidance, and innovative solutions, driving Mari’s growth, operational efficiency, and long-term sustainability in the energy sector and beyond.

Mari has established a governance structure founded on tiered oversight and aligned with industry best practices. In compliance with the Code of Corporate Governance, the Board of Directors (BoD) plays a pivotal role in providing strategic direction while ensuring the implementation of rigorous risk management and internal control systems. To further enhance governance, the BoD has established five specialized committees: the Audit Committee, Human Resource & Remuneration Committee (HR&R), Technical Committee, Investment Committee, and Environmental, Social, and Governance (ESG) Committee. These committees are instrumental in reviewing key matters and providing recommendations to the BOD to support sound and effective governance. In FY24, the BoD convened six meetings whereas the Audit Committee and HR&R Committee each held eight meetings, while the Technical Committee met five times, and the Investment and ESG Committees convened twice.

To ensure continuous improvement, the Board undergoes an annual performance evaluation conducted by external consultants. In response to the assessment, the Board takes appropriate actions, including revising policies, if required. Furthermore, the Board has implemented an Enterprise Risk Management (ERM) Policy, which provides a robust framework for identifying, assessing, and managing risks. This policy establishes minimum standards and practices within the Company's defined risk appetite, to ensure proactive risk management and informed decision-making.

As a publicly listed company, Mari’s board is committed to maintaining the highest standards of transparency, accountability, and ethical conduct. To ensure effective communication with stakeholders, the Company prepares timely financial statements with all necessary disclosures in compliance with Pakistan Stock Exchange (PSX) Rules and Securities & Exchange Commission (SECP) Regulations. M/s A.F. Ferguson & Co., Chartered Accountants, serve as the Company’s external auditors.

The Company operates with a comprehensive and streamlined organizational structure, encompassing several key divisions/departments which are led by senior, highly qualified professionals. These divisions are supported by experienced teams to ensure seamless operations. In addition to key technical departments, most of the support departments also report directly to the Managing Director/Chief Executive Officer (MD/CEO), which ensures streamlined decision-making, enhances agility, and fosters greater alignment with the Company’s strategic objectives.

Mr. Faheem Haider serves as the Chief Executive Officer (CEO) and Managing Director (MD) of the Company since August 2020. With over 32 years of international experience in the oil and gas industry, Mr. Haider has held various technical and leadership positions with prominent companies, including Union Texas Petroleum, OMV Pakistan Exploration GmbH, Helix RDS Limited UK, BG Group Plc UK, and Neptune Energy Group UK (formerly known as Engie E&P International).

Mr. Haider is also the Managing Director / CEO of Mari Mining Co and Mari Technologies Co and the Chaiman of the Board of Sky 47 Limited. He also represents Mari on PIOL board.

Rest of the management team comprises of seasoned professionals having significant international and local experience in the oil and gas industry. In the recent past the company has been able to attract talent in key operational areas to further strengthen its technical and operational teams. Management team has also implemented international best practices to run the business in a sustainable manner.

Mari ensures the efficient operations of its activities through the clear segregation of duties, well-defined reporting lines, and a structured hierarchical framework, all of which support informed decision-making. The Board of Directors and Management maintain a proactive stance on risk management, engaging in regular discussions to address emerging risks.

The Company’s Enterprise Risk Management Program is aligned with the ISO 31000:2018 Risk Management Guidelines. It also adheres to the Institute of Internal Auditors (IIA) "Three Lines of Defense" model, providing comprehensive risk assurance at all organizational levels.

Key Risk Indicators (KRIs) are developed in accordance with the Company’s Risk Appetite Statements and are consistently monitored to identify potential breaches. Any breaches are promptly reported to the Board along with a detailed mitigation plan, ensuring effective governance and reinforcing the Company’s organizational resilience.

Mari emphasizes collaboration across its technical and functional departments, which facilitates the selection and implementation of advanced information systems. The Exploration and Reservoir departments utilize industry-leading Geological and Geophysical (G&G) interpretation and reservoir modeling software.

To streamline its core business processes and optimize performance and productivity, the Company has automated and integrated its key workflows using the latest ERP solutions. The ERP software is designed to manage and integrate functions across core business modules, including finance, human resources, supply chain, information technology and other key areas within a single system. This integration ensures seamless data flow and operational efficiency across the organization.

Keeping in view the significance of management’s support towards the success of an ERP project, Mari follows a systematic approach towards building use cases and conducting feasibility analysis for incorporating new and improved modules within its ERP toolkit. Management actively supports the effective implementation and continuous refinement of the ERP system, ensuring alignment with the Company's strategic objectives.

The adoption of the latest ERP features and functionality is undertaken by the Company after thorough testing, skills development, user training and through a comprehensive change management process to mitigate the risks generally associated with ERP projects.

The Company has internally developed and relies of state-of-the-art Dashboards that are deployed as tools for the management to monitor the key business data to have transparency and visibility.

Mari has developed a robust Internal Control Framework with the following objectives: (i) enhancing the efficiency and effectiveness of operations, (ii) ensuring the reliability of internal and external reporting, (iii) ensuring compliance with applicable laws, regulations, and policies, and (iv) safeguarding the Company’s assets. Regular risk-based internal and external audits are conducted at all Mari locations to assess compliance and evaluate the effectiveness of the internal control procedures.

The outlook for Pakistan’s upstream oil and gas sector remains challenging; however, ongoing efforts to enhance exploration, production, and infrastructure development are critical to ensuring energy security and mitigating the impacts of global market volatility. Recent data reflects a positive shift, with Pakistan’s crude oil reserves increasing by 26% and gas reserves by 2% as of June 30, 2024, reversing a long-standing trend of depletion. This improvement is primarily attributed to new discoveries and revisions of existing reserves, with Mari and OGDCL playing pivotal roles.

For FY24, Pakistan’s total gas production amounted to 1,140,636 MMSCF, while oil and condensate production reached 25,811,880 barrels. Despite these encouraging developments, the sector continues to face a medium to low business risk profile, reflecting a balance between resource potential and operational challenges. While the sector benefits from steady domestic demand and its strategic importance, it also faces significant risks, including reserve depletion, exposure to circular debt, and the complexities of developing unconventional and offshore resources.

The accumulation of circular debt within the energy supply chain has exacerbated financial challenges, hindering the operational efficiency and investment capacity of exploration and production companies. Delayed payments and liquidity constraints remain substantial obstacles.

Nonetheless, opportunities exist in the potential discovery of offshore oil and gas reserves within Pakistan's territorial waters. Additionally, the government has introduced policies aimed at incentivizing the exploration of tight gas and unconventional resources.

At the same time, certain improvements recently introduced in the Petroleum Policy 2012 will have long-term positive impact for the sector in general and for Mari, in specific. Success in exploration efforts in frontier zone would attract better pricing aimed to compensate for higher cost of exploration and operating cost. The provision of renewal of leases till commercial production would promote prudent investment decisions leading to long-term sustainability of the sector. The government’s decision of upward revision in consumer gas prices has provided a sigh of relief for upstream sector by reducing the further built-up of circular debt resulting in improved cash flows and better financial planning.

Mari holds a prominent position in the market as the largest gas producer in Pakistan, commanding a 29% share of the country’s total gas production. As of June 30, 2024, the Company also possesses the second-largest reserves & resource base in Pakistan, with 816 MMBOE, and achieved an exceptional reserve replacement ratio of 423% during FY24. Mari’s net daily production averages approximately 108,000 barrels of oil equivalent (BOE) [production capacity is 120,000 boepd]. With a Reserves-to-Production Ratio of 17 years, the highest in the industry, Mari demonstrates a robust and sustainable resource base. The Company’s expertise in reservoir management and leveraging advanced technologies such as horizontal drilling, integrated field modelling, artificial lift and use of smart technologies, enables it to optimize output from its mature fields. Mari’s strong operational efficiency and financial performance further solidifies its strategic role as a key supplier of natural gas in Pakistan. The gas produced by the Company supports critical sectors thereby ensuring energy and food security of the Country.

During FY24, the Company achieved a 7% increase in hydrocarbon production, reaching 39.01 MMBOE. This growth was driven by successful operational activities, capacity enhancements, and production from newly discovered reservoirs. Consequently, the Company reported its highest ever net sales of PKR 181.83 billion, compared to PKR 145.77 billion in FY23, reflecting impressive growth of approximately 25%. This increase was primarily attributable to enhanced production levels and improved selling prices throughout the year. USD denominated portion of the revenue supports the company against impact of rupee devaluation.

The management of the Company successfully implemented cost optimization measures across all operations, maintaining a production cost of approx. USD 2 per barrel of oil equivalent—the lowest in the industry in Pakistan. A similar upward trend was observed in the net profit margins, which improved to 42.5% in FY24, compared to 38.5% in FY23.

The Company’s strong overall performance, coupled with income generated from its investment portfolio, contributed to supplementary income which enabled Mari to achieve its highest-ever net profit of PKR 77 billion in FY24.

Mari's sustainability is strengthened by proactive management initiatives, notably the Government’s approval of a five-year extension to the Mari lease period, which now extends the Company’s development and production rights in the lease area until 2029 and subsequently as per amendments in rules the extension will be allowed till economic life of field. This extension enables Mari to focus on optimizing recovery from the field, ensuring long-term operational continuity and resource development. By executing its exploration plans and enhancing production from existing fields, the Company is well-positioned to maintain a steady growth trajectory.

The management is committed to achieving the Company’s long-term vision and growth objectives through three key pillars: (i) strengthening the core business, (ii) diversifying beyond oil and gas, and (iii) establishing national leadership in Environmental, Social, and Governance (ESG) initiatives.

Exploration remains a priority for Mari, with ongoing activities targeting both current and prospective blocks. The aim is to discover additional hydrocarbon resources to further strengthen the Company's reserves base and ensure long-term resource development. Additionally, Mari continues to evaluate and enhance the production capacity of its explored and producing fields, focusing on improving the recovery factors and accelerating production. Mari’s participation in a consortium of leading Pakistani national E&P companies to explore an offshore oil and gas block in Abu Dhabi marks a significant expansion into the international market. This is the first such opportunity for Pakistani E&P companies in the region, underscoring Mari’s growing global footprint.

Mari’s diversification strategy reflects its forward-looking approach to growth and sustainability, with key developments in several strategic areas:

Mining Sector: Mari’s entry into the near core mineral mining sector is a significant step towards diversifying its portfolio and seize new growth opportunities, complementing its traditional exploration and production activities.

Sustainable CO? Management: Mari is the frontline company in mitigating GHG emissions, especially methane abatement & CO? management. Being a signatory of the Oil & Gas Decarbonization Charter (OGDC), it has aligned its sustainability strategy with the global efforts to address climate change. The company is actively working on developing the first CCS project in the country

Clean Energy and Green Hydrogen: Mari is making strides in the clean energy space by positioning itself at the forefront of the transition to cleaner energy sources such as green hydrogen. The company, in collaboration with leading national & international players is exploring this potential area for business expansion to supports global decarbonization efforts and diversifying Mari’s energy mix.

Energy Infrastructure and Advanced Technologies: Mari is investing in energy infrastructure and advanced technologies to enhance operational efficiency and create new business opportunities in the energy space. The establishment of Mari Technologies Limited is a key step in embracing the digital transformation of the energy and mining industries. This subsidiary will focus on cutting-edge technologies such as data centers, cloud computing, artificial intelligence, and solutions related to petroleum and mining, reflecting Mari’s commitment to technological innovation.

ESG has always been at the core of Mari’s business operations: The Board has recently approved the Company’s ESG Policy & set-up the dedicated Committee to steer the sustainability initiatives. After publishing its first ever ESG report in 2022-23, an integrated annual report was published during FY 2023-24. The company management is committed to deliver strong ESG performance across the entire business value chain to foster long-term shared value for all stakeholders. The Company’s ESG focus goes beyond applying mitigation measures by setting forth an ambitious mission in alignment with UN SDGs, seeking continuous improvement in its operations to achieve Net Zero, Sustainable Development and an Inclusive Society. Renaming: The proposed renaming of MPCL to Mari Energies Limited reflects the Company’s expanding horizons and its strategic positioning for future growth in an increasingly competitive and evolving world. By aligning with sustainability goals, we aim to enhance our outreach to potential business partners, consumers and stakeholders who prioritize responsible practices.

This fresh, dynamic, and distinctive approach not only strengthens Mari’s brand value but also instills a sense of pride and motivation among the shareholders, employees, and broader stakeholders.

This rebranding reflects the Company's broader focus beyond traditional exploration and production activities, emphasizing its commitment to energy solutions and technological advancements and drives collective progress and fosters a culture of innovation and excellence.

As of June 30, 2024, Mari's trade receivables amounted to PKR 81,073 million as compared to PKR 61,676 million in the previous year mainly due to circular debt. The Company continues to effectively manage its working capital needs primarily through internally generated cash. As of June 30, 2024, the Company maintained a healthy bank balance and short-term investments totaling PKR 74.89 billion.

Regarding circular debt, as of June 30, 2024, the Company’s share reached PKR 72.9 billion, with PKR 62.2 billion currently overdue. Ongoing discussions are taking place with public sector gas utility companies to resolve this issue especially the introduction of escrow account mechanism for ultimate supply of gas to dedicated bulk consumers. More importantly, as the Company relies on internal cash generation rather than bank borrowings to meet its obligations, Mari’s working capital cycle remains manageable.

Company's liquidity needs are efficiently met through internally generated cash flows, primarily from hydrocarbon sales and income from deposits, with minimal reliance on external sources, thereby keeping borrowing costs low. In FY24, Mari generated Rs. 100,443 million from operating activities, which was strategically utilized for exploration and development activities, capital expenditures, and dividend payments.

Mari’s financial strength is underscored by its exceptional cash flows reflected by enhanced cash generation and a low-leverage capital structure. Additionally, free cash flow from operations grew to PKR 54.79 billion in FY24, a substantial increase from PKR 19.45 billion in FY23. This impressive growth demonstrates the Company’s operational efficiency, capacity to fund future growth initiatives, and ability to manage debt obligations effectively, further solidifying its strong financial standing. To maintain effective liquidity management, the Company consistently monitors its cash inflows, outflows, and future projections before making financial decisions. This proactive approach provides clear insights into future liquidity requirements, enabling Mari to address potential gaps through strategic and operational adjustments or financing arrangements.

The Company maintains a minimal reliance on external financing, with outstanding borrowings totaling PKR 743 million only as of June 30, 2024. With an equity base of PKR 225 billion and strong cash flows, Mari has fortified its financial stability. Looking ahead, the management intends to remain largely debt-free, reinforcing its commitment to maintaining a solid financial position, minimizing risk, and ensuring sustainable growth without the need for external borrowings. This approach underscores the Company’s strategic focus on financial prudence and long-term resilience.