Interview with Syed Faran Rizvi, CEO Foundation Securities
Profile:
Syed Faran Rizvi is a seasoned capital markets professional with over 16 years of experience in Pakistan’s brokerage industry. He currently serves as CEO of Foundation Securities and previously held the position of Country Head Sales at JS Global Capital Ltd. A highly respected market professional, Faran has won the CFA Society Pakistan Best Equity Trader Award six times, including this year.
PAGE: What is your take on the recent developments in the oil & gas industry?
Syed Faran Rizvi: Previously, RLNG supplies led to the curtailment of domestic oil and gas production. However, amid tensions in the Middle East, domestic E&P companies are now bridging the supply gap. Discoveries made over the past couple of years are bearing fruit, supporting production levels.
Historically, the absence of new block auctions during FY14–FY21 coincided with declining oil and gas production and depleting reserves. Subsequently, seven onshore and one offshore bidding rounds offered 124 and 40 blocks, respectively, with 52 onshore and 23 offshore blocks awarded to various E&P companies.
Pakistan’s exploration success rate is higher than the global average, although discoveries tend to be smaller. The awarded onshore blocks include areas with significant geological potential and attractive risk–reward profiles. These areas could yield larger discoveries over the longer term. However, security challenges and inadequate infrastructure remain key constraints, often delaying exploration activities and the achievement of production targets. On the offshore front, seismic data acquisition is underway, with the first exploratory drilling potentially taking place in the latter part of CY28.
Meanwhile, rising gas circular debt in the past constrained OGDCL’s and PPL’s ability to expand exploration activities and undertake workovers at mature fields. Recent progress in addressing these constraints has created greater room for investment in exploration and production enhancement.
A key measure of E&P performance is the reserve replacement ratio (RRR), which assesses reserve additions relative to production. New discoveries and upward revisions to existing reserves support this ratio, while bringing fields into production strengthens the production profile.
On the reform front, the amended policy permits the sale of up to 35% of eligible gas volumes to licensed third parties, subject to stipulated conditions. This offers an opportunity to diversify buyers and improve cash collections, although the benefits depend on contract execution, infrastructure access and payment performance.
PAGE: What is your perspective on oil prices in the wake of the US-Iran war?
Syed Faran Rizvi: We expect oil prices to remain volatile, with our base-case range at USD 85–90/bbl. The key swing factor is the Strait of Hormuz and, more broadly, the availability of physical crude supplies. Any disruption to tanker traffic or regional exports could push prices materially higher, while de-escalation and normalization of flows could quickly unwind the geopolitical premium. Beyond the conflict, OPEC+ supply response and global demand will determine how sustainable higher prices are. For Pakistan, prolonged elevated oil prices would increase the import bill, add to inflationary pressures and strengthen the case for a higher-for-longer interest-rate environment. Therefore, while our base case remains USD 85–90/bbl, we expect oil to stay highly headline-driven until there is greater clarity on the conflict and regional supply flows.
PAGE: Flows of diesel and other refined fuels remain constrained due to the conflict. What is your take?
Syed Faran Rizvi: Fuel imports remain constrained amid the ongoing Middle East conflict; however, domestic supplies have remained broadly stable. PSO remains the primary importer of HSD, with imports currently limited, while the government is encouraging local refineries to increase production and pursue upgrades aimed at reducing import dependence. Despite the conflict continuing for around seven months, Pakistan has not experienced any material disruption in refined-product availability. We therefore expect supplies to remain uninterrupted in the near term, supported by domestic refining, inventories and continued import arrangements. A prolonged disruption to regional shipping routes remains the key risk, potentially raising freight and procurement costs and tightening domestic availability.
PAGE: How would you comment on Pakistan’s proven oil and gas reserves?
Syed Faran Rizvi: According to the latest PPIS data published in June 2026, Pakistan’s oil and gas reserves stood at 276.44 million barrels and 20.6 Tcf, up 15% and 9% YoY, respectively. This increase was driven by additions from new fields and reserve revisions at existing fields including Baragzai, Bettani, Bitrism East, Dhok Sultan-3, Chakar, Hatim-Faiz, Bilitang, Bobi Deep, Shams, Ghazij, Spinwam. As a result, oil/gas reserves life of the industry went down/up from 15/19 years in Dec’25 to 12/21years in Jun’26. However, Pakistan’s oil and gas reserves each account for less than 1% of their respective global totals.
Pakistan’s macroeconomic outlook has improved, supported by progress under the IMF program, stronger foreign exchange reserves and healthy remittance inflows. However, the Middle East conflict has introduced renewed uncertainty through elevated oil prices and their implications for inflation, interest rates and external balances. Strong FX reserves and remittance inflows provide a buffer, and we do not foresee immediate material pressure on the Pakistani Rupee. Nevertheless, persistently high oil prices could increase the import bill and add to inflationary pressures. Consequently, we do not expect a material decline in interest rates in the near term. If the conflict persists, the balance of risk could shift towards a higher-for-longer rate environment, while renewed monetary tightening cannot be ruled out under a more severe scenario.
Stock Market Performance Overview:
Higher interest rates could limit the scope for a broad-based market re-rating by increasing the attractiveness of fixed-income instruments. Domestic flows should nevertheless remain supportive as long as macroeconomic stability is maintained, particularly after foreign investors have cumulatively sold around US$3.3bn over the past decade. However, significantly higher rates or domestic political uncertainty could weaken local participation.
The environment also favors greater sector selectivity. E&Ps remain relatively well positioned under elevated oil prices, benefiting from higher realized crude prices, improved cash recoveries and continued exploration activity. Banks could benefit from higher-for-longer rates through stronger spreads, particularly those with sizeable low-cost deposits, although prolonged high rates could eventually constrain credit growth.
We also remain constructive on fertilizers, given sustainable earnings, healthy margins and attractive dividends, while cement offers medium-term upside from recovering demand, pricing discipline and energy optimization.
Cement and steel need stronger construction and industrial demand. Key triggers for the cement sector include – (1) pent up demand post COVID, (2) robust margins, (3) strong pricing discipline, (4) fuel/energy optimisation
Overall, an easing of Middle East tensions and normalization of oil prices would improve the inflation and interest-rate outlook and support market valuations. Conversely, a prolonged conflict would increase the importance of earnings delivery, dividend yields and sector selection, with E&Ps, selected banks and defensive high-dividend sectors relatively better positioned.