This action might not be possible to undo. Are you sure you want to continue?
OIL & GAS DEVELOPMENT COMPANY LIMITED
Date of Submission
february 28, 2009
SCHEME OF THE REPORT
1-Chapter 1 Chapter 1 covers the background of the study, purpose, scope, limitations, merits, methodology and scheme of the study. 2-Chapter 2 Chapter 2 covers the oil industry in Pakistan, history of OGDCL and the organizational structure comprehensively.
3-Chapter 3 In chapter 3, the organizational structure and its structure is discussed comprehensively. More attention is given to the different departments working in and under OGDCL and how these departments operate.
4-Chapter 4 This chapter also presents functions, projects, product line, mission and objectives, Product and services offered, as well. 5-Chapter 5 This chapter focuses on finance department of OGDCL. It explains the administration and Finance department and its practices in the organization in detail. 6-Chapter 6 This chapter is all about SWOT analysis in which strength, weaknesses, opportunities and threats are discussed. 7-Chapter 7 In chapter 6, problems of OGDCL are identified and then on these bases some suggestions are given keeping in view the current situation of the organization. The effort is directed for efficient performance
CHAPTER –1 INTRODUCTION
Prior to OGDCL's emergence, exploration activities in the country were carried out by Pakistan Petroleum Ltd. (PPL) and Pakistan Oilfields Ltd. (POL). In 1952, PPL discovered a giant gas field at Sui in Balochistan. This discovery generated immense interest in exploration and five major foreign oil companies entered into concession agreements with the Government. During the 1950s, these companies carried out extensive geological and geophysical surveys and drilled 47 exploratory wells. As a result, a few small gas fields were discovered. Despite these gas discoveries, exploration activity after having reached its peak in mid-1950s, declined in the late fifties. Private Companies whose main objective was to earn profit were not interested in developing the gas discoveries especially when infrastructure and demand for gas was non-existent. With exploration activity at its lowest ebb several foreign exploration contracting companies terminated their operation and either reduced or relinquished land holdings in 1961.
Establishment of OGDC:
To review exploration in the energy sector the Government of Pakistan signed a long-term loan Agreement on 04 March 1961 with the USSR, whereby Pakistan received 27 million Rubles to finance equipment and services of Soviet experts for exploration. Pursuant to the Agreement, OGDC was created under an Ordinance dated 20th September 1961. The Corporation was charged with responsibility to undertake a well thought out and systematic exploratory programs and to plan and promote Pakistan's oil and gas prospects. As an instrument of policy in the oil and gas sector, the Corporation followed the Government instructions in matters of exploration and development. The day to day management was however, vested in a five-member Board of Directors appointed by the Government. In the initial stages the financial resources were arranged by the GOP as the OGDC lacked the ways and means to raise the risk capital. The first 10 to 15 years were devoted to development of manpower and building of infrastructure to undertake much larger exploration programmes.
1.2 Initial Successes:
A number of donor agencies such as the World Bank, Canadian International Development Agency (CIDA) and the Asian Development Bank provided the impetus through assistance for major development projects in the form of loans and grants. OGDC's concerted efforts were very successful as they resulted in a number of major oil and gas discoveries between 1968 and 1982. Two oil field was discovered in 1968 which paved the way for further exploratory work in the North. During the period 1970-75, the Company reformed the strategy for updating its equipment base and undertook a very aggressive work programme. This resulted in discovery of a number of oil and gas fields in the Eighties, thus giving the Company a measure of financial independence. These include the Thora, Sono, Lashari, Bobi, Tando Alam & Dhodak oil/condensate fields and Pirkoh, Uch, Loti, Nandpur and Panjpir gas fields which are commercial discoveries that testify to the professional capabilities of the Corporation. 1.3 PGCL:
A wholly owned subsidiary, the Pirkoh Gas Company (Private) Limited (PGCL) was established in 1982 to undertake development of Pirkoh gas field located in Dera Bugti Agency in Balochistan with Asian Development Bank assistance.
Transition to a self financing entity Noting the Company's success, due to major oil and gas discoveries in the eighties, the Government in July 1989, off-loaded the Company from the Federal Budget and allowed it to manage its activities with self generated funds. The financial year 1989-90, was OGDC's first year of self-financing. It was a great challenge for OGDC. The obvious initial target during the first year of self-financing was to generate sufficient resources to maintain the momentum of exploration and development at a pace envisaged in the Public Sector Development Programme (PSDP) as well as to meet its debt servicing obligations. OGDC not only generated enough internal funds to meet its debt obligations but also invested enough resources in exploration and development to increase the country's reserves and production.
Conversion into Public Limited Company Prior to 23 October 1997, OGDCL was a statutory Corporation, and was known as OGDC (Oil & Gas Development Corporation). It has been incorporated as a Public Limited Company w.e.f. 23 October 1997 and is now known as OGDCL (Oil & Gas Development Company Ltd.). Initial Public Offering Government of Pakistan disinvested part of its shareholding in the company in 2003. Initially 2.5% of the equity with an additional green-shoe option upto 2.5% of equity was offered to the general public. The said Offer received an overwhelming response from the general public and was recorded as a landmark transaction in the history of Pakistan's capital markets. GDR In December 2006, the Government of Pakistan divested a further 10% of its holding in the company. The Company is now listed on the London Stock Exchange since on December 06, 2006.
OIL AND GAS TRAINING INSTITUTE (OGTI) The oil and gas development company limited (OGDCL) was set up in 1961 in the public
sector under the ministry of petroleum and natural resources. 1.4.1 Aims and Objectives Of OGTI The aims and objectives of OGTI are to identify the training needs of the industry, offer practical training programme to professional of the petroleum industry, provide training advice and guidance to OGDC and to help established standards for training which will meet the performance needs in the field and on the job. OGTI is dedicated to: Establish courses and in-house training programmes which will meet the specific needs of OGDC and the Pakistan petroleum industry.
Designing training material that recognizes the capabilities and specific needs of newly hired employees and those who change their job assignment. Providing refresher and upgrade training for industry personnel in cost effective manner.
In-house basic training programmes are being designed and developed to provide a base level of training which employees require to function in their jobs . OGDC recruits men from all across Pakistan. The universities and technical schools do not provide the full range of subject matter necessary for a graduate entering the petroleum industry. It is OGTI’S intention to ensure that the individual has an opportunity to obtain this training within his first two years with OGDC . In addition to basic training courses , OGTI will Organizes in-house technology update seminars . 1.5 BACKGROUND OF THE STUDY Oil industry is a lifeline for an economy. It is a world of oil exploration, oil refining and oil marketing. Pakistan understands the importance of this industry for its economic uplift. Therefore the government of Pakistan established OGDCL in 1961. OGDCL is the leading firm providing 23% of total consumption, saving Pakistan from imports and contributing to economy by paying different charges to the government. 1.6 PURPOSE OF THE STUDY This report is based on study carried out for the fulfillment of the degree requirement of the Master in business administration at the GOMAL UNIVERSITY . The purpose of the study is to do practical work in field and apply the knowledge of classroom lectures to the real life situations.
1.7 SCOPE OF THE STUDY The scope of my work is focused on the working of FINANCE DEPORTMENT Review Section of this report not only explains department’s working but also flow of work activities among the sections. During the internship it, the observation was focused on internal managerial matters of OGDCL, i.e. work environment, organization structure, decision-making process, Finacial metter This research facilitates in SWOT Analysis.
1.8 LIMITATION OF THE STUDY No matter how efficiently a study is conducted, it cannot be perfect in all respects. This study was conducted in accordance with the objectives of the study; the study may not include broad explanations of facts and figures due to the nature of the study. Second: limitation, which affects the study, is the availability of required data was problem all the documents and files are kept strictly under lock and key due to their confidential nature. Third: the problem of short time period also
makes the analysis restricted as one cannot properly understand and thus analyze all the operations of an organization just in eight weeks. 1.9 MERITS OF THE STUDY The study done will benefit the finance students in particular and all type of Management students in general, because the analysis section of this report comprehensively encompasses all respects of OGDCL. Furthermore, OGDCL Head office Islamabad may also benefit from the recommendations made at the end of the report. 1.10 METHODOLOGY OF STUDY The data collected for analysis and review includes both primary and secondary data. The methods used for collecting primary and secondary data are as follows: 1.10.1 Primary Data Data collected for the first time is called primary data. The methods used to collect such data include: • • Personal observations and Interview with organization’s employees.
1.10.2 Secondary Data The data collected earlier by someone else and which has gone through mathematical and statistical techniques after its collection, is called secondary data. Methods used to collect secondary data include: • • • • • • OGDCL annual reports OGDCL brochures Internship reports on OGDCL Journal and Newspaper Internet
CHAPTER –2 PRESENT STATUS OF THE COMPANY
2.1 VISION STATEMENT To be a leading, regional Pakistani E & P Company, recognized for its people, partnerships and performance. 2.2 MISSION STATEMENT Our mission is to become a competitive, dynamic and growing E & P Company, rapidly enhancing our reserves through world class workforce, best management practices and technology and maximizing returns to all stakeholders by capturing high value business opportunities within the country and abroad, while being a responsible corporate citizen.
OGDCL Goals & Core Values Core Values Merit Integrity Team Work Safety Dedication Innovation Goals 1.ÿFinancial 2.ÿTo reduce cost and time over runs to improve financial results 3.ÿTo maximize profits by investing surplus funds in profitable avenues 4.ÿTo make investment decisions by ranking projects on the basis of best economic 5.ÿindicators 6.ÿGrowth and superior return to all stakeholders 7.ÿDouble the value of the company in next five years. 8.ÿCustomers 9.ÿImprove the quality of service to make it faster and more transparent 10.ÿQuality, dependability, responsible corporate citizen 11.ÿReliable and efficient company 12.ÿTo provide most reliable supplies to the customers through cost effective means 13.ÿLearning & growth 14.ÿTo set up task forces with representation from all relevant departments to 15.ÿimprove internal business decision making and strategic planning 16.ÿExcel in exploration, development and commercialization 17.ÿAvailability of updated information to the shareholders and customers 18.ÿTo use most effective business practices and formulate a framework of synergic 19.ÿorganization with the change in culture
HISTORICAL DEVELOPMENT OF THE COMPANY Establishment The Oil & Gas Development Company Limited (OGDCL) was created under an Ordinance in
1961, to undertake comprehensive exploratory programme and promote Pakistan’s oil and gas prospects. In 1997, it was converted into a Public Limited Company and is now governed by the Companies Ordinance 1984. 2.5.2 Development With a balanced, efficient and competitive structure, OGDCL explores and exploits indigenous resources for optimum production of oil and gas, besides seeking opportunities abroad. OGDCL has the largest acreage position in Pakistan and currently operates 17 exploration concessions and holds non –operated working interest in another 7 exploration concessions. In addition OGDCL has 35 Mining and Development & Production Leases, which are operated by it besides having working interest ownership in 28 non-operated Mining and Development & Production Leases, OGDCL has an extensive database. Services of the Company’s highly qualified and skilled expertise in the fields of geology and geophysics are frequently availed y the local and foreign oil companies. It also leases out its drilling rigs to the private sector and carries out seismic surveys and data processing on contract for these companies on extremely competitive rates. OGDCL now holds the largest shares of oil and gas reserves in the country, i.e. 48% of total oil and 37% of total gas reserves. Its percentage share of the total oil and gas production in Pakistan is 34% and 28% respectively. On the basis of its activities since inception, the company has until June 30, 2003 and made 59 discoveries with a success ratio of 1:3. OGDCL’s updated estimates for remaining recoverable oil and gas reserves as on 1st July, 2003, stood at 9.228 billion standard cubic feet (BSCF) of gas and 164.25 million barrels of oil including company’s share in non – operated Joint Ventures. During the last 42 years OGDCL has grown into a technically and commercially viable organization. 2.5.3 Name & Address of Company Oil and Gas Development Company Limited (OGDCL). House, Jinnah Avenue, Blue Area, Islamabad, Pakistan. Telephone: Fax No: 051-9209701 051-9209708
Business Development Initiatives have been taken to enhance OGDCL's business canvas. OGDCL will avail opportunities, to acquire overseas acreage by buying stakes in existing viable producing fields. OGDCL is also looking into the possibility of E&P opportunities and joint venture collaborations outside Pakistan, which would include swap of assets for reserves acquisition with percentage of working interest in international market. OGDCL with an aggressive business development strategy provides an enabling environment for foreign participation (either as a JV partner or on a stand-alone basis). The Company is also aiming at fast-track development of its current and future projects at an aggressive pace without compromising quality and transparency Share Price Quote OGDCL's ordinary shares are listed in Pakistan on the Karachi, Lahore and the Islamabad Stock Exchanges under the ticker code OGDC. OGDCL also has global depositary shares listed on the London Stock Exchange under the ticker code OGDC.
London Stock Exchange
Karachi Stock Exchange
DISCLAIMER: The above links to sites of other parties are provided for your convenience. OGDCL neither reviews and monitors nor has any responsibility for the contents of these sites, and the fact that OGDCL has provided a link to these sites is not to be interpreted as an endorsement of, or acceptance of responsibility for their contents.
Chapter 3 ORGANIZATIONAL STRUCTURE
MAIN OFFICES OGDCL Head Office is situated at Jinnah Avenue, Blue Area Islamabad and Regional
Offices are located in Karachi and Multan. Besides this OGDCL has its Liaison Offices in Hyderabad, Sukkhur, and Quetta for operational activities. The overall organizational structure / organogram is as under A Board of Directors comprising twelve Directors, all of whom are nominated by the Ministry of Petroleum and Natural Resources, is responsible for policy related issues. The autonomous Board is headed by a non-executive Chairman and there is a Managing Director/Chief Executive Officer. Following are the main offices located throughout Pakistan:
OGDCL Head Office, Jinnah Avenue Islamabad.
Pirkoh Gas Company Private Limited, Islamabad.
OGDCL Regional Office, Shafi Chamber, Karachi
OGDCL Regional Office, Multan
OGDCL Liaison Office, Quetta
OGDCL Liaison Office, Sukkur
OGDCL West Wharf Office, Karachi
OGDCL Base Store, Islamabad
OGDCL Base Store, Khadiji, Karachi
OGDCL Base Store, Korangi OGDCL Base Store, Kot Addu
OGDCL Base Store, Kot Sarang
Medical Centers, Islamabad, Rawalpindi & Karachi
OGDCL Workshops, Islamabad
Oil & Gas Training Institute, Islamabad.
3.2 MAIN DEPARTMENTS
Human Resource Department
4. Security Department
Legal / Regulation Department
Finance & Accounts Department
E&P Departments 1. Exploration Department
Technical Services Department 1. Drilling Department
Data Logging Department
Mud Engineering Department
4. Well Services Department
Geological Well Supervision Department
Wire line Logging Department Geological Department,Data Processing Department
Major Oil & Gas Fields
Tando Alam Bobi Dhodak Fimkassar Lashari Missa Keswal Thora Sadqal
Toot Chanda Daru Kunnar Loti Nandpur Qadirpur Sono
Uch Chak Naurang Dakhni Kal Missan Pasakhi Rajian
3.3 Organizational Structure
Chairman Board of Directors Manag ing Director Company Secretary Chief Staff Off icer
E.D (Admin) GM (Admin) Manag er (Admin) Chief (Admin) Dy . Chief (Admin) Sr. Admin Off icers Admn Off icers Admn Section
E.D (Finance/ Accounts) General Manag ers Manag ers
E.D (Exploration) General Manag ers Manag ers
E.D (Drilling) General Manag ers Manag ers
E.D (Corporate Aff air) General Manag ers Manag ers
Chief Account Off icers
Chief Engineers Principle Engineers Senior Engineers Junior Engineers Exploration Staff / Sections
Chief Engineers Principle Engineers Senior Engineers Junior Engineers Drilling Staff / Sections
Chiefs (Corporate) Dy . Chief s (Corporate) Senior Corporate Off icers Junior Corporate Off icers Corporate Staff / Sections
Senior Account Off icers Account Off icers Finance/ Account Sections
BOARD OF DIRECTORS
COMMENTS ON THE ORGANIZATIONAL STRUCTURE
All policy related issues are dealt by the board of Directors that is headed by a non-executive Chairman and a full time Managing director. The general direction, policies and affairs of the Company vests in a Board of Directors, which consists of 01 Chairman, 10 Directors and 01 Managing Director (MD). MD is responsible for operational and other activities. The OGDCL has been re-organized during the last few years; it now operates much purely as Oil Company does. Emphasis is on Professional Competence and getting things done. OGDCL can broadly be divided in to following three companies: Corporate Exploration & Production (E& P ) Technical Services The whole organization has been streamlined on the functional basis and it has emerged as an efficient unit, while speed and competence are its Hall Mark. It is now divided into separate departments and each department is in a position to work independent business unit. For effective operational activities, different Executive Directors performs following activities in consultation with General Managers, who are assisted by the concerned Departmental Managers:
The Executive Director Exploration: Supervises all the geophysical and geological and exploration activities and is assisted by different Manager. Executive Director Drilling: when a potential oil or gas field has been identified through seismic surveys, it is then drilled to assess the quality and quantity of the deposits. This process is achieved through drilling. ED (Drilling) is responsible for all the drilling activities carried out by OGDCL in the country.
Executive Director Admin: Responsible for management of personnel. The administration department manages all the activities from recruitment to training and development.
Executive Director Corporate Affairs: Looked after the activities of planning of different development programme and monitor the implementation of that program. It coordinates with all the department of OGDCL and prepares a strategic plan for the activities of OGDCL. This department also liaison between OGDCL different Ministries.
NO OF EMPLOYEES
DOMICILE AND GROUP-WISE SUMMARY OF OVERALL OFFICIALS PAY GROUP MeritPUNJAB DOMICILE SINDH URBAN RURAL TOTAL NWFP BALUC- FATA HISTAN MANAGEMENT CADRE AK TOTAL IN THE GROUP
M-1 EG IX EG VIII
0 0 4
0 2 3
0 1 0
0 0 1
0 1 11
1 0 0
0 1 0
0 0 0
0 0 0
1 4 9
EG VII EG VI EG V EG IV EG III EG II EG I TRAINEES TOTAL
3 12 19 28 28 22 15 12 143
37 102 116 109 178 204 132 69 952
6 18 36 29 57 17 28 13 205
1 13 49 36 46 39 47 20 252
7 31 85 65 103 56 75 33 457
11 31 28 34 28 38 18 15 205
1 10 11 6 9 7 7 11 63
1 4 10 14 7 8 3 8 55
0 5 5 6 3 3 2 6 30
60 195 274 262 356 338 252 154 1905
PAY GROUP MeritPUNJAB
DOMICILE SINDH URBAN RURAL TOTAL NWFP BALUC- FATA HISTAN AK
TOTAL IN THE GROUP
NON EXECUTIVE CADRE
16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 TRAINEE TOTAL
2 2 0 0 15 0 4 3 5 0 3 0 0 0 0 0 6 40
163 106 253 4 623 1 148 425 164 93 670 99 264 198 324 1392 27 4954
49 12 58 2 59 0 24 45 35 11 94 19 28 39 70 103 1 649
14 25 109 0 60 0 56 67 95 16 166 9 79 31 220 705 2 1654
63 37 167 2 119 0 80 112 130 27 260 28 107 70 290 808 3 2303
22 20 58 1 113 0 34 79 30 5 102 23 30 25 41 136 8 727
2 0 7 0 14 0 6 20 11 8 50 5 63 29 128 566 8 917
1 0 6 0 5 0 2 2 2 0 7 0 0 2 1 2 0 30
5 5 13 0 31 0 12 12 9 3 17 13 17 26 14 45 1 223
258 170 504 7 920 1 286 653 351 136 1109 168 481 350 798 2949 53 9194
FUNCTION OF OIL AND GAS DEVELOPMENT COMPANY
The main functions of the Corporation are:a. To plan, organize and implement programmes of exploration of development of oil and as resources. b. To carry out geological, geophysical and other surveys for the exploration of oil and gas. c. To carry out drilling and other prospecting operations to prove and estimate the reserves of oil and gas. d. To produce, refine and sale oil and gas
e. To perform other functions as the Federal Government may from time to time assign to the Corporation.
PROJETS QADIR PUR DEVELOPMENT PROJECT Qadirpur gas field, one of the large fields in the country was discovered in 1990. It is located
in the central Indus basin, south of kandhkot and Sui gas field. In accordance with the consolidated revised development plan dated 30 November, 2002 phase-II “revamp project” was commissioned on 23 January 2004 to process MMscfd of gas. Under this plan pretreatment memguard unit and new membrane elements were installed and drilling of one well was completed. Phase-III of this project was commissioned on 20 march 2004, by installation of two additional membrane skids and drilling of two wells. Due to this expansion the capacity of plan has increased to process gas up to 500 MM. 2.8.2 CHANDA DEVELOPMENT PROJECT Chanda oil field, the over discovery in NWFP, was brought on to stream and it started giving production from 17 July, 2004, and is currently producing 3,500 barrels of oil and 13 MMscf of gas per day. Chanda LPG plant will also be installed by October 2004 were 25-40 M.tons of LPG will be produced. The
third well at Chanda field is planned to be in third quarter of 2004-2005.This will increased the production of field to 5,300 sbarells of oil and 19 MMscf of gas per day. 2.8.3 BOBI DEVELOPMENT PROJECT First phase of the bobi development project has also been commissioned in June 2004 and is producing 1,050 barells of stabilized condensate per day. Phase-II of the project is expected to be streamlined in October 2004. On its completion, the field will produce about 2,800 barrels of oil per day and 125 M.tons of LGP Satellite fields namely Mithrao and chak dim will 2.8.4 DHODAK PLANT ENHANCEMENT AND DAKHNI EXPANSION Dhodak plant enhancement and dakhni expansion projects are also in progress and are expected to be completed by some time completion, the enhancement of production of oil, gas, LPG and sulpher. projects will result in substantial
Projects Chanda Development Project Dakhni Expansion Project
Completion January, 2007
Estimated Cost $ 9 Million
Prod Capacity LPG: 25 MTD Gas: 8.5 MMscfd Oil.: 720 BPD
Gas: 12MMscfd LPG: 12 MTD Sulphur: 80 MTD a). To maintain plateau of gas
Qadirpur Compression Project
September, 2008 December, 2007
$ 160 Million
production 650 MMscfd b). Additional 100 MMscfd gas
Dhodak Expansion Project Uch-II Development Project TAY Development Project
A Bid to be invited afresh March, 2009 (As conveyed by PPIB) A Bid to be invited afresh
Oil.: 4000 BPD $ 50 Million Gas: 64 MMscfd LPG: 258 MTD
$ 250 Million Gas: 200 MMscfd Oil.: 2500 BPD $ 54.1 Million Gas: 28 MMscfd LPG: 85MTD Oil.: 2940 BPD $ 89 Million Gas: 25 MMscfd LPG: 224 MTD
A Bid to be invited afresh
1.4. Products and Services Offered
Business Volume Exploration, Development, Reserves and Production Being largest E & P Company in Pakistan:
OGDCL holds 115 million barrels of oil and 10.5 trillion cubic feet (TCF) of gas as remaining recoverable reserves. These constitute 46% of total oil and 30% of total gas reserves of the Country. OGDCL is the highest oil and gas producing Company in Pakistan and it produced 47% of crude oil and 23% of Gas in 2004 2004-05. Average daily production of the Company including share in operated and non non-operated joint ventures is 39,130 barrels of oil, 919 MMcf of Gas and 334 Tons of LPG. OGDCL’s current concession portfolio comprises of 25 concessions and a reconnaissance permit covering an area of 59,968.6 sq. kms which constitute 30% of total exploration area granted to various E&P companies in Pakistan. The Company also holds non Company nonoperated working interest in another three exploration concessions, which are operated by other JV partners. OGDCL has 39 Development and Production / Mining Leases which are operated by it besides working interest ownership in 29 non non-operated leases. OGDCL’s major oil and gas fields are located at Kunnar, Paskhi, Bobi, Tando Alam, Thora, Lashari, Sono, Fimkassar, Kal, Sadqal, Rajian, Missakesswal, Dhodak, Dakhni, Chanda, Chak Naurang, Qadirpur, Uch, Pirkoh, Loti, Nandpur / Punjpir and Hundi/Sari.
OGDCL so far has drilled 198 exploratory wells and 246 development wells and has made 60 oil and gas discoveries.
The main product lines of the company are as under:
1.4.1. Crude Oil
Crude oil is the mixture of petroleum liquids and gases (including impurities such as sulphur) that is pumped out of the ground by oil wells. Main production Oilfields of the company are Dakhni, Dhodak, Bobi, Tandoalam, Chanda, Toot & Rajian.
A mixture of hydrocarbon compounds and small quantities of various non hydrocarbons existing in the non-hydrocarbons gaseous phase or in solution with crude oil in natural underground reservoirs. The major gas fields of the company are Dakhni, Dhodak, Qadirpur, Nandpur, Pan Panjpir, Pirkoh and Uch.
1.4.3. Liquefied Petroleum Gas (LPG)
A mixture of hydrocarbons found in natural gas and produced from crude oil, used principally as a feedstock for the chemical industry, home heating fuel, and motor vehicle fuel. The major fields of the company having LPG production facilities are Dakhni, Dhodak, Sadkal, Kunner and Bobi.
Naphtha is a group of various volatile flammable liquid hydrocarbon mixtures used primarily as feedstocks in refineries and petrochemical industry. It is also used in solvent applications. Naphtha is the residual product of the company and is extracted from various oil / gas fields.
1.4.5. Solvent Oil
A simple or complex liquid mixture of hydrocarbons that can be refined to yield gasoline, kerosene, d diesel fuel, and various other products. This product is extracted from various oil fields of the company.
1.4.6. Kerosene Oil
Kerosene oil has been distilled from petroleum, and generally used as a fuel for lighting etc. This residual product is extracted from various oil fields of the company.
1.4.7. High Speed Diesel Oil
It is the hydrocarbon Oil suitable for use as fuel in Compression Ignition Engines; extracted from various oil fields of the company.
A yellow mineral extracted from petroleum for making fertilizers, pharmaceuticals and other products. The petroleum sulphur is produced at the Dakhni oil & Gas field near Jand, Attock
Crude Oil Gas LPG Sulphur White Petroleum Products
Thousands Barrels MMcf M.Tons M.Tons Thousands Barrels
8,535 217,927 77,402 16,670 998
8,705 245,537 93,136 23,234 989
9,413 274,006 90,304 15,889 859
9,941 277,408 101,322 18,917 890
13,045 329,385 120,063 25,884 885
12,956 336,059 128,654 22,006 959
PRODUCTION OF CRUDE OIL
S.No. 1 2 3 4 5 6 7 8 9 10 Name of Company OGDCL BP-Pakistan POL PPL OPI BHP Eni MOL OMV Petronas TOTAL Barrels per day 31,370 16,559 10,324 3,645 1,880 1,714 330 153 98 22 66,095
PRODUCTION OF CRUDE OIL (Barrels per Day)
6% 16% 3% 3% 0% 47%
OGDCL OPI OMV
BP-Pakistan BHP Petronas
PRODUCTION OF NATURAL GAS
S.No. 1 2 3 4 5 6 7 8 9 10 OGDCL PPL OMV MGCL Eni BHP BP-Pakistan OPI POL Others TOTAL
Name of Company
MMCFD 856 799 554 445 389 258 230 66 42 46 3,685
PRODUCTION OF GAS (MMCFD)
6% 2% 7% 11% 12% 15% OGDCL Eni POL PPL BHP Others OMV BP-Pakistan MGCL OPI 22% 1% 1% 23%
140000 120000 100000 80000 60000 40000 20000 0 2002-03 2003-04 04 2004-05 2005-06 2006-07 2007-08
30000 25000 20000 15000 10000 5000 0 2004-05 2005-06 2006-07 2007-08 2002-03 2003-04 2004
White pertoulem products (Barrels)
1200 1000 800 600 400 200 0 2002-03 2003-04 2004 2004-05 2005-06 2006-07 2007-08
2.1. Internship Duration & Rationale for Selection
Since my area of specialization is “Finance”, the organization I have chosen for internship is “Oil and Gas Development Company Limited (OGDCL)” a major Oil & Gas Company of Pakistan having Head Office in Islamabad. I have done internship in this organization for 6 weeks in Finance Department. The company is engaged in Exploration, Drilling and Production of Oil & Gas resources through out Pakistan. through-out Consisting of 13 Technical Departments and 17 Serving Departments, it is the major Oil and Gas Company in Pakistan. The company has achieved all time high net sales revenue of Rs. 51.294 billion during 2005 2006, representing 14% growth over last year. 2005-2006, The report covers the overall operations of the company with specific emphasis on its Finance & Accounts Department. It also discusses financial growth in profitability of the nce company due to new discoveries of Oil & Gas reservoirs in Sindh & Panjab areas and the use of latest technology in exploration, drilling and production operations of the company.
STRUCTURE OF THE FINANCE DEPARTMENT TURE
Finance & Accounts Department plays a vital role in the organizational structure. OGDCL has acquired the services of highly qualified professionals like CAs, CMAs, MBAs and M. com for its Finance and Accounts Department. The Executive Director (Finance), heads the Finance & Accounts Department. GM (Finance), GM (Accounts) and GM (Treasury) and Managers assist the Executive Director (Finance) for effective and efficient controlling of OGDCL financial activities. Different sections of Finance department are headed by Sectional In charges who reports to ions In-charges Managers. The main role and function of ED, GMs, and Managers are as under:
Executive Director Finance
Dy Chief Accountant
Jr. Accounts Assistant
EXECUTIVE DIRECTOR (Finance)
Director Finance is a member of Board of Directors and represents the Finance and Accounts Department.
G M - Finance/Accounts/Treasury
General Managers reports to DF and is responsible for overall activities of Finance & Accounts Department. The overall structure of the Finance Department and the relevant category of professionals is given on next page.
Managers - Finance/Accounts/Budget & Accounts/Joint venture
Managers reports to GMs and is responsible for smooth running of their respective sections.
Sectional Incharge reports to respective Manager and is responsible for specific job/assignments of their section only. They assisted by Deputy Chiefs, Senior Accountants, Accountants and assistants.
STRUCTURE OF FINANCE AND ACCOUNTS DEPARTMENT
Manager (Finance) reports to GM (Finance). Following section reports to Manager (Finance). Imports section Bank / Cash section Sales Section
MANAGER (Budget & Accounts)
Manager (Budget & Accounts) reports to GM (Finance). The work of Budget & Accounts is distributed between six sections.
Budget and AFE Section Final Accounts MR section EDP Management and Training
MANAGER (Stores & Fixed Assets) Manager (Stores & Fixed assets) reports to GM (Finance). He looks After the whole inventories, fixed assets and material in transit of the Organization. Following sections are the part and parcel of this Segment: Local Stores Foreign Stores Material in Transit Fixed Assets Petrol, oil & lubricants Reconciliation MANAGER (JV Accounts) Manager (JV Accounts) reports to GM (Finance). He manages the Joint Ventures of OGDCL and Other exploration Companies which are broadly divided into the following two divisions: Operated Joint Venture Non Operated Joint Venture
MANAGER (Accounts) Manager (Accounts) reports to GM (Accounts). Following sections are supervised by Manager (Accounts): Payroll Accounts Payable Field Imprest
1. IMPORT SECTION 2. Bank section 3. Sales Section 4. Payroll section 5. Accounts payable section 6. Employee’s advance section 7. Field Imprest Section 8. Final account section
Number of Employees working in Finance Department
Total employees working in the Finance & Accounts Department are 254, out of which there are 74 Officers and 180 staff members.
FUNCTIONS OF›FINANCE› DEPTT. OF PERSONNEL DEPT
finace dept plays a vital role in ogdcl. finance dept has divided into main different section
1. Import section 2. Bank section 3. Sales Section 4. Payroll section 5. Accounts payable section 6. Employee’s advance section 7. Field Imprest Section 8. Final account section
9. Joint venture
10. Budget and AFE Section
where each and every dept is responsible to do it own work. and each section of finance dept are conected each other through computer system. they use ORACLE computer software. through which they record and transmit the data to each other and to uper managment.
ADVANCE SECTION In this section they work on computer based ORACLE soft ware system typically they prepare the records /transaction of loan/advances and also prepare the record of the recovery of loan. along with interest majorly they approve loan /advance of 1) purchase of conveyance 2) passages/ marriages 3) house building/ hiring these facilities are granted regular/permanent employees with accordance to their job nature and time period and they also provide other loans like travel loan, petty cash loan for(purchase of different things),hotel stay, etc expenditure but these loan are recovered(compensated) earlier as soon as possible after availing the loan/advance the loan are being compensated in PAYBLE and BANK section. The proper record are being kept via manually and on computer ORACLE SW so chance of error is very minimum RECOVERY OF LOAN Recovery of loan based upon the nature of loan which is given to employee. in some clauses they charge interest and some time not. CASE= there is case of death of an employee, died in July 2008 who had availed the facility of loan Rs 54,624 in June 2005 he had been charged monthly 921.40 to June 2008. so in the net figures 30,034.2 and 24,580 balance along with the interest 11,338 (total 35918.80) is remaining for the recovery of balance. and now the lumsum amount will be deducted from his pension/compensation
WHEN THE ORGANIZATION DONOT CHARGE INTEREST they don not charge interest when an employee do not getting interest on GP fund and other balances OGDCL give the the facilities of interest to an employee who avail or not. HOUSE BUILDIND LOAN there are 180 installment of loan for staff (1-16)scale employee and 150 installment for officers(OG) 17 and above. the organization will not lend any type of house building loan when the time of job is remaining less then 5 years there is no prefixed amount house building loan is sum of 60 basic pay for officers and 100 basic pay for staff. HOUSE HIRING(package) CEILING OGDCL extend/lend the loan t employee for house hiring in shape of cash payment. As per employee deed/contract. there is contract b/w employee and OGDCL. if the OGDCl give accommodation facilities to an employee. So OGDC extended the loan in advance to employee as per contract (in clause of ceiling) after all cash will be compensated in PAYBLE and BANK section. In ceiling they pay a lumsum payment to employee at once or partially but in week. OR per month which will be added in his/her salary. If the rent becomes higher after some tome the OGDCL will not be responsible for that. There is contract committee which prefix the amount of ceiling according to the 1) nature of job 2) scale of an employee 3) place of accommodation
HOUSE RENT(package) as per employee deeds/contract. If the OGDCL give the house rent facility to an employee. there is three parties 1) employee 2) owner of house 3) OGDCL Contract committee Contact committee or Administration dept will make contract with the owner of house and fix the house hiring rent. In this contract the contract is made b/w OGDCL contract committee and owner of house. this contract will not be concerned with employee. employee will be free. Some time The Organization pay lumsum amount and sum time per month but according to contract This contract is made for 2/3 year maximum. Any how The ADVANCE section also treat This function/contract also. CONVEYANCE LOAN OGDCl also give the facility of conveyance loan to permanent/regular employees. there is 60 installments of conveyance for staff and officer both. If the employee job time is remaining is less then 5 year then he can not apply for conveyance/house building loan. the amount of conveyance loan is prefixed which is of 100,000 Rs MARRIAGE LOAN OGDCl also give the facility of marriage loan to any regular employee or those employees who are on contract(staff only) with OGDCL . there is 40 installment for marriage loan. And the amount of marriage loan is 25,000, which is prefixed.
FORMULAEE FOR THE RECOVERY OF LOAN HOUSE BUILDING LOAN FOR OG/OFFICER = Total amount / 150 =$amount of installments FOR STAFF HOUSE HIRING FOR OG/OFFICER = Total amount / 2*12(months) =$amount of installments FOR STAFF = Total amount /3*12(months) =$amount of installments = Total amount / 180 =$amount of installments
COVEYANCE LOAN FOR (OG/STAFF) MARRIAGE LOAN FOR (JUST FOR STAFF) = Total amount / 40 =$amount of installments = Total amount / 60 =$amount of installments
Function and Responsibility of Imprest section Imprest section plays vital and impotent roll in Fiancé and Account section of OGDCL. To Control manage and transfer of funds to field and location Replenishment of head office impret Payment of land compensation to all field/land owners Checking punching and posting of field imprest data in Oracle Financial sys and reconciliation and there of. The main functions and responsibilities of Imprest section are as under FIELD REMITTANCE Field remittances means transfer of funds from Head Office Islamabad to Various (52) fields/parties/ location against the following "ÿAuthorized Imprest 1.ÿ1st fort night 2.ÿ2nd fort night "ÿPayroll 1.ÿwages/salaries 2.ÿbonus 3.ÿarrears 4.ÿadhoc/ advance wages "ÿAdditional funds 1.ÿprojects cost 2.ÿland compensation 3.ÿhiring vehicles 4.ÿHO approvals 5.ÿmedical bills 6.ÿunion agreement (arrear of DA, H2s allowance, EWA etc)
Head Office Imprest Total head office imprests are 29 Most of the depts. / section are holding petty cash imprest, to meet their day to day requirements, on replenishment bases, and Personals are processing the cases under the OGDCL rules Action / Activities 1.ÿchecking of imprest files along with relevant documents 2.ÿpreparation of cash / bank payment vouchers 3.ÿmaintaining of imprest control register 4.ÿmonthly reconciliation of cash / bank imprest account 5.ÿadjustments / rectification ,if any required 6.ÿvariance analysis if any Field imprest Responsibilities of account representatives at fields / locations "ÿpreparation of bank receipt voucher "ÿcash withdrawals from bank "ÿpayment of bills "ÿrelease of security deposit and in earnest money "ÿprocess conveyance loan "ÿrecording of unclaimed wages and allowances "ÿadjustments of advances "ÿdisbursement of cash "ÿpayment of unclaimed wages and land compensation "ÿadvance payment for purchase, travel and daily allowances "ÿcash payment for miscellaneous items "ÿrecord transaction on cash , bank, and advance book "ÿmaintain control register for 1.ÿhead office approvals 2.ÿutility bills 3.ÿland, Cop and Tree compensation 4.ÿpayment of projects in progress etc
"ÿbank Reconciliation statements "ÿpreparation of bank summery statement "ÿpreparation of cash summary, leave encashment and advances statement "ÿpreparation of report for accrued expenditure on quarterly basis "ÿpreparation of expenditure analysis report "ÿpunching, posting of imprest data in the system on daily basis "ÿdispatch of imprest data , along with required documents , to HO by 1st of each month
AXISTING ORGANOGRAM (BANK SECTION) Actg. manager (finance) Chief accuontant
Dy chief accountant
Assistant Accountant (Reconcilation NBP,
Sr. accountant (control issuence of cheques)
Accountant (REconcilatio,sale, FC,security A/cs)
Sr. Accountant (Control issuanc of cheques) Account assistant (Dividend)
Assistant accountant (Control signatures & delivery of cheques)
Jr.accountant (preparation of chuqes)
Jr. accountant (Control payment voucher)
(recieve voucher for payments)
Bank section Listing of activities 1. Arrange / manage funds to meet the daily operational requirements. 2. Prepare and control of cheques issue on receipt of payment vouchers. 3. Collect and deposit sales proceeds for crude, natural gas, LPG, sulphur. 4. Collect and deposit money received through drafts / cheques on account of tender documents, auction proceeds and other miscellaneous receipts. 5. Invest excess funds in short term and long term investment. 6. Encash short term and long term investment and maturity if required. 7. Transfer funds to fields, rigs, field's parties, Karachi regional office, 8.ÿwest wharf and imp port accounts. 9.ÿTransfer of funds between bank accounts as required. 10.ÿReconcile General Ledger with bank statement on a monthly basis. 11.ÿPrepare fund position statement on daily basis and submit it to 12.ÿmanagement on weekly basis. 13.ÿPrepare receipts and payments statements for each rupee bank ÿaccount on a monthly basis. 14.ÿMaintain dividend accounts. 15.ÿMaintain account for receipt of earnest money. 16.ÿRefund earnest money upon completion of project or contract. 17.ÿMake necessary arrangements for authentication, issuance and ÿencashment of bank guaranties on request of other departments. 18.ÿProvide funds to cash section as required.
19.ÿCalculate and control interest on deposits. 20.ÿMaintain OGDCL locker with bank. 21.ÿPayment of with holding tax. 22.ÿControl of payment / receipt vouchers and other record. 23.ÿPayment of security, performance bond and bank guarantee received in cash.
Sales section Purpose and objectives: Sales section in OGDCL has the following purposes. "ÿIt prepares the bills for the sales of products and services of OGDCL. "ÿIt collects the receipts generated by the sales. "ÿIt collects the government levies from the consumers and sends the accounts to the government of Pakistan. The government levies on the sales of OGDCL's offering are discussed later in the report. PRODUCTS AND SERVICES OGDCL deals in the following products and services. Later in the report the pricing mechanism of few products are also discussed. PRODUCTS "ÿKAROSENE "ÿSILVENT OIL "ÿHSD "ÿNaphta "ÿCrude oil "ÿLPG "ÿGas "ÿHi-Speed diesel SERVICES "ÿTelephone Dhodak "ÿAir Craft Services "ÿGrand R Labs "ÿ Water Supply
"ÿTelephone Dhakni "ÿSeismic Survey "ÿMaterial Transport Service "ÿCementation Service "ÿMud Logging Service REPORTS GENERATED BY SALES SECTION AND GOVERNMENT LEVIES Sales section generates the following reports 1.ÿINVOICES Invoices are made by the section using financial Oracle. The invoice by this section usually contains the following components. "ÿOGDCL letter head "ÿName, Address, e-mail, fax number, bank account number and national tax number of both the parties. "ÿDate of invoice. "ÿCredit period. "ÿDue date of payment. "ÿSales quantity. The invoice is signed by Chief (Sales/Financial planner). One copy of the invoice is sent to Accounts officer (DGCP), one is sent to Acting manager (Marketing Department OGDC), and another is retained for the office. 2.ÿEXCISE DUTY REPORTS Government levies Fields Excise Duty on sale of Gas at the rate of Rs. 5.09 / MMBTU of gas. The sales section keeps the comprehensive record of the Excise Duty on periodical basis.
Excise Duty on periodical basis. 3.ÿGST REPORTS Government levies GST at the rate of the total values added. Total value added implies the addition of excise duty and sales value. The sales section keeps the comprehensive recode of the GST on periodical basis. 4.ÿROYALTY REPORTS Government levies royalty at the rate of 12.5% of the total sales revenue. The sales section keeps the comprehensive record of the royalty on periodical basis. PROCESS FLOW IN THE SALES SECTION
The above diagram shows the process flow in the sales section of OGDCL.
The products from fields (Gas, Crude Oil, LPG etc) come to the consumer (SSGCL, SNPL etc) and the production report comes to the marketing department of OGDCL. The marketing department verifies the report and sends it to the sales section of Finance and Accounts Department. Sales section then sends the invoice to the consumer. The invoice to the consumer contains of following components. "ÿSales value "ÿExcise duty "ÿGST Consumer pays sales section through check. Excise Duty and GST becomes government revenue when sales section deposits GST and Excise Duty in the National Bank of Pakistan. PRICING MECHANISM OGDCL has different pricing polices for different products. The pricing policies are affected by the National and International regulatory authorities such as OGRA and OPAC. The pricing mechanism for different products is as under. 1.ÿGAS The price of GAS is set by OGRA (Oil & Gas regulatory authority) for a period of six months. These prices are revised in January and July. OGRA sets a certain amount against IMMBTU. For example, in 2004 OGDCL signed a "Chanda Gas Agreement" with SSGCL in which OGDCL was supposed to provide Gas to SSGCL at the rate of Rs. 178/MMBTU. 2.ÿSULPHURE OGDCL extracts Sulphur from Dakhni Field. After extraction sulphur is auctioned to the consumers. The minimum price at the auction is the price equal to the price of the nearest exporting country, which is India. The major consumers of sulphur are sugar mills and pharmaceutical mills and laboratories.
3.ÿCRUDE OIL Pricing of the crude oil is determined by "Oil Gram Plates". Oil gram plate is a manual which is published worldwide and mentions the prices of Crude oil of all exporting countries. OGDCL sets the price of Crude oil equal to the average price nearest exporting countries which are Dubai and Oman. CREDIT TERMS USSUALY SET BY SALES DEPARTMENT Credit terms differ from agreement to agreement but in most of the cases the credit terms are of such nature and format as discussed below. "ÿPayment for the Gas in respect of each seller members share as "ÿspecified in the sale invoice shall be made to each seller member "ÿdirectly in its designated bank account within 30 days from the date of the receipt of the sales invoice. Payment of the receipt of the sale invoice relating to excise duty and taxes shall be made within 10 days of the receipt of the sales invoice. "ÿIf the payment made by the buyer is received later then the last business day (I-e a day at which the banks in Islamabad operate) in the period specified above then shall bear late payment surcharges (LPS) from the date of payment at the purchase rate for the latest applicable 3 months Pakistan T-Bill rates, as announced by the state bank of Pakistan from time to time. If such bills rate ceases to be notified by the state bank of Pakistan, then any other such rate notified by the competent authority in place of three months T-Bill rates.
PRICING "ÿProduction reports received from fields. "ÿInvoices are prepared on monthly basis. "ÿSale + excise duty + sales Gan.
1. Import section is responsible to arrange and establish the letter of credit with regard to import the material both locale and foreign as requested by the procurement deportment 2. Confirm and earmark the source of fund for the establishments of letter of credit i.e cash foreign exchange and own resource 3.ÿCommunication with bank for amendment. extension and 4.ÿenhancement of LCs at the request of supply Chain management deportment 4. Maintain record of shipping advice to monitor consignment arrives 5. Process and forward negotiable document West Wharf office, Karachi and CM &CIDA Islamabad 6. Arrange the endorsement of shipping guaranties or airway bills for timely clearance of consignment at the request of supply chain management or the DCMMO Karachi 7. Maintain source wise record of letter of credit 8. Reply quires regarding demurrages 9. Prepare monthly statement of LCs, established out of various funds for onward submission to the budget section 10. Prepare weekly position of utilization of funds for onward transmission bank section 11. Reconciliation of Cash foreign exchange allocated by State Bank of Pakistan and monitor its proper utilization 12. Prepare vouchers for recording the expenditure and transfer of funds for reconciliation for bank account 13. Custodians of performance bonds and bank guaranties 14 Forward complete set of retired documents to store accounts dept for the reconciliation of material received with FRS on monthly basis
HIRING OF SERVICES 1. Establish, enhance, emend, and extend letter of credit for hiring of services, both local and foreign, as and win required by the supply chain mgt dept 2. 3. 4. 5. Verify, control, and process service invoices Reply audit quires regarding service invoices Submit monthly statement of payment to service contractor Calculate tax deduction to be withheld from foreign contractor's invoices after consultation with tax section 6. Booking of accruals of service invoices on monthly basis
MAIN FUNCTION OF IMPORT SECTION IMPORT OF MATERIALS 1ÿArrange establishment of letters of credit for import of equipment, spares and Chemicals etc for OGDCL fields /locations 2 3 Maintain complete record of LCs established and paid Manage and dispatch original shipping document to OGDCL West Wharf office
Karachi or CIDA. store for clearance of goods/ consignment 4 check the paid shipping documents with contract to maintain accuracy of
payments made against LCs LOCAL PROCUREMENT OF MATERIAL 1ÿArrange establishment of in land LCs for procurement of material locally against Local Purchase Order PAYMENT OF FORIEGN CONTRACTORS (SERVICES) 1ÿArrange establishment of invisible LCs for payment of services rendered by 2ÿcontractors at OGDCl different field/locations 3ÿMaintain complete record of LCs established and paid . 4ÿPayment to service contractors in hundred % Pakistani Rupees MANAGE CASH FORIEGN EXCHANGE ALLOCATION 1ÿArrange cash foreign exchange from ministry of Finance for Import of material and hiring of services on case to case basis with in the limit of approved budget for this purpose By GOP
CHAPTER –5 SWOT Analysis table for OGDCL
Highly Skilled Professionals Vast Experience Joint Ventures with Foreign Oil Companies Working in Pakistan Major oil & Gas Company of Pakistan High market cap and revenue
Political Influences Limited Customer Limited Marketing Opportunity
Inadequate Financing for offshore drilling
Expansion towards a multinational Company Expansion towards Exploration & drilling Activities Marketing Opportunity for LPG & Sulphur Off-shore drilling
Safety Issues / Tribal Issues
2.3 SWOT ANALYSIS
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of Strategic planning and helps managers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. Strengths and weaknesses are internal factors. STRENGTHS
Largest Oil and gas company in the Pakistan. Monopoly of the company and having confidence due to govt. support. Dynamic & Strong Financial Position due to the 45 years experience. A new, Exploration and innovative of Wells. Best location of business which is choosing after long process. Quality processes and procedures. uality Large number of field of oil and gas. Experienced and Technical Staff involving no. of expert Geologist. Confidence of the Customers. All other aspect of the company that adds value to the product or service.
Lack of marketing expertise. Undifferentiated products or services (i.e. in relation to the competitors) Lack of coordination of operations. Government Influence. Untrained Staff. Slow promotion process which reduces the performance. Lack of Check and balance. Weak quality goods or services (can be only one of more than one)
Opportunities and threats are external factors. For example: OPPORTUNITIES
A developing market such as the Internet. Mergers, joint ventures or strategic alliances Moving into new market segments that offer improved profits A new international market A market vacated by an ineffective competitor. Large workshops for training and development. Support of the Ministry of P&NR (Petroleum and Natural Resources). Better Competitive Position.
A new competitor in the home market. Price wars with competitors. Fear of Privatization. Tuff Competition Globalization is the factor which brings the strong companies in Pakis Pakistan A competitor has a new, innovative product or service. Competitors have superior access to channels of distribution.
Future prospects of the organization
Currently OGDCL is operator in Nineteen Exploratory Blocks and working interest in nine non-operated blocks. In addition company has got 34 mining and D & PL leases. operated Targets have been based on risks and opportunities. Physical targets for the year 200 200-02 was envisage drilling of fourteen wells (nine exploratory and five development), 2950 as Km of seismic survey, production of 28,111 barrels per day, 730 MMcf per day gas, 313 metric tons per day pf LPG and 60 tons per days pf sulphur. To accelerate exploration activities by covering 3,200 km of seismic Survey and drilling of 12 exploratory wells with the clear objective of a net increase in oil and gas reserves. It is expected that
exploratory program will result in increase in OGDCL reservoir in oil and Gas and also to the country‘s reservoir. To develop the already discovered oil and gas fields with a view to enhance production and improve revenues of US$ 35 million per annum and 24,500 wells are being drilled on various points i.e. Sanjharo , Norijagir, Ghari, &, Chanda etc; from these points oil and gas are discoved to achieve the future targets. To modernize, replace and effectively maintain the drilling, seismic and processing equipment in order to keep the equipment in sound operating condition at all times. To develop OGDCL‘s human resources through transfer of technology and training. To rationalize stores and spares inventory to the optimum level. OGDCL is providing gas to IPPs like Uch power from Uch Gas Filed Project and from Nandpur / Panjpir to Fauji Kabirwala Power Limited. All these projects are contributing a lot of income to the OGDCL’s current revenues. Despite number of Joint ven ventures and competitors in the oil and gas sector, OGDCL has drilled different concessions independently as well as it has ventures with other company’s successfully. OGDCL Seismic Crews are busy in G&G Ranpathani, Sanghar and Zin etc. pathani, survey on different concession like Kharar, Basal, barrels of oil per day and 565,605 Mmcfd of gas is expected to be pr produced during 1999-2000. Exploratory 2000.
FUTURE GOALS & STRATEGY: OGDCL plans to drill 45 wells during current financial year (2005 06), to explore new (2005-06), drillable prospects. The Company has also started three new development projects – Tando Allah Yar, Sinjhoro and Uch II. The Company has placed great emphasis on fast Uch-II. track completion of these projects and on progressive project management concepts. ck
Quarterly comparison of actual verses budgeted expenditure is carried out to ascertain weakness and cost over over-runs. Timely payment to the vendor, supplier and contractors is effective tool for supplier image building of OGDCL. To achieve this, internal procedure should be well defined which will reduce time in these payments. To save time of the employees chasing their payments employee related payments shoul be excluded from the ambit of pre-audit. should All accountants should be given training on different accounting modules and chart of accounts. So that monopoly and dependence on few is eliminated. Rotation of duties should be made at regular interval to improve the overall improve work output and to keep the interest of the employee intact. Responsibility of clearing/correcting the entries should be fixed with the section generating the activities A professional Accountant should be assigned the job to the review of AFEs with the collaboration of technical professionals for proper and effective control to avoid cost over runs. For effective cost control, standardization of different stationery items and consumable is approved for purchasing in bulk from the manufa manufacturer directly. A good internal Control is a key to success for an organization, but in OGDCL there is a lack of internal control, which should be improved and implemented effectively.
The production of oil and gas is contributing a lot in reducing the country’s import bill. reducing Power generation by IPPs (Industrial Power Projects) in the country is a major source of energy. OGDCL’s Uch Gas field and Panjpir/ Nandpur Gas Fields are the two main fields, which have now started supplying Gas to power companies. This not only power meeting the requirement of the IPPS but also contributing a lot towards meeting the demand of electricity in the country. OGDCL’s contribution to the national exchequer in the form of royalty; excise duty, debt servicing, and taxes are a huge support as compared to the other state owned organizations. OGDCL entered into new JV agreements in various exploration Blocks with the foreign oil companies to boost up the efforts for increasing the Oil & gas demand of this country... Oil and gas Training Institute (OGTI) is providing training facilities and meeting il the requirements of highly trained, motivated, and improved human resources. OGTI designs and implements programme to develop and expand the technical and managerial skills of professional to meet the fast changing challenges to the company. A total of about 150 courses in service disciplines are conducted during every year. The quality of an organization is dependent on the quality of its work force. OGDCL has engaged top professionals in Geology, Drilling, Engineering, and production that are ofessionals working day & nights for the search of Oil & gas. Besides this, the corporate sector is equipped with professionals having qualification of CAs, MBAs, M.Coms, which support the technical wings. The time bound necessity is that all these professionals be given a l targets and their performance indicators be clearly defined. A good leadership and the motivation will surely boost-up the efforts and the collective efforts will result in a hug -up huge reservoir of Oil or Gas INSHALLAH.
1. Ministry of Petroleum and Natural Resource’s site. 2. www.ogdcl.com 3. www.google.com.pk 4. www.kse.com.pk 5. Pakistan industrial Reviews 6. Annual Reports of OGDCL 7. Business Recorder “ News Paper” 8. Observer Journals. 9. Interview of OGDCL MD.
All the praise is for Allah, the most merciful and beneficent, who blessed us with the knowledge, gave us the courage and allowed us to accomplish this task. We are especially indebted to our supervisors and teachers. Their inspiring guidance remarkable suggestions, constant encouragement, keen interest, constructive criticism, and friendly discussion enabled us to complete this report efficiently. Without their support and proper guidance, it would be almost impossible to accomplish this task successfully. We offer our heartiest tribute and cordial gratitude to present our thanks to General Manager OGDCL whose cooperation helped us to achieve our target. We have fortunate of having a very nice company of friends and seniors especially who cooperated with us in all matters relating to the report.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.