The Macro environment of Mari Petroleum

Demographics
Provisional results of Pakistan's 2017 national census estimate the country's total population to
be 207,774,000; the population growth rate is 1.43%. Most of the population lies between the
age group of 25 to 54. Ethnic groups consist of Punjabi 44.7%, Pashtun (Pathan) 15.4%, Sindhi
14.1%, Sariaki 8.4%, Muhajirs 7.6%, Balochi 3.6%, other 6.3%

Languages spoken are Punjabi 48%, Sindhi 12%, Saraiki (a Punjabi variant) 10%, Pashto
(alternate name, Pashtu) 8%, Urdu (official) 8%, Balochi 3%, Hindko 2%, Brahui 1%, English
(official; lingua franca of Pakistani elite and most government ministries), Burushaski, and other
8%

Religions Muslim (official) 96.4% (Sunni 85-90%, Shia 10-15%), other includes Christian and
Hindu which account for 3.6%

Our company is an exploration and production company our customers are other businesses
which provide service to the end consumer so the personals that we deal with are mostly aged.

Mari Petroleum Company Limited (MPCL) is operating seven oil & gas/condensate fields
which are Mari Field, Daharki, Zarghun Gas & Condensate Field, Sujawal Gas & Condensate
Field, Koonj Gas field, Ghauri Oil Field, Halini Oil Field and Kalabagh Gas & Condensate Field
in all four provinces of Pakistan. Daily gas production of MPCL from its operated fields stands
at around 680 MMSCFD of gas & 2400 Bbls of oil/condensate per day.

Economic Environment

The recovery in global oil price continued in 2017-18 as the glut in global oil supply gradually
disappeared as a result of production adjustments from OPEC and non-OPEC nations under the
‘Declaration of Cooperation’. Oil price which averaged around $50 per barrel in 2016-17
touched $70 per barrel in 2017-18. The price is expected to remain stable during next 2-3 years
due to increase in oil demand resulting from a strong world economy (mostly developing
countries) and growth in demand for petrochemicals (mostly in USA, China and other developed
countries). On the supply side, most of the increase in supply is expected to come from non-
OPEC countries led by the US. Despite oil price stability, investment in the upstream sector has
so far shown only modest signs of recovery from the lows of 2015-17.
In Pakistan, upstream sector remained quite active during the year although the much-awaited
bidding round for new blocks remained elusive as before. 29 oil and gas exploration and
production companies are working in Pakistan, out of which 11 are local Mari being one of them.
There have been quite a few discoveries of both oil and gas during the year but reserves
replenishment remains quite low. The Country has mainly remained dependent on imports since
independence.

Indigenous crude oil meets only 15 percent of the Country’s total requirement, while 85 percent
requirement is met through imports of crude oil and refined petroleum products. The indigenous
and imported crude is refined by six major and two small refineries in the Country.

The downward trajectory of the Country’s recoverable oil and gas reserves amid declining
production volumes from maturing fields, projects a weaker outlook for indigenous oil and gas
production in coming years. Most of the unexplored hydrocarbon potential in the Country
remains in the frontier areas of KPK and Balochistan which are now opening out to cautious
operations.

Key Sources of Uncertainty

The uncertainty in E&P operations emanates from multiple sources. Key sources of uncertainty
for MPCL are as following:

 Crude oil price volatility

 Inherent risks in E&P business
 Security situation in areas of Company operations particularly in KPK and Balochistan
 Changes in Government policies concerning energy, petroleum and fertiliser sectors
 Regulatory issues
 Human errors and negligence
 Natural disasters and extreme weather conditions

Sociocultural
Society’s culture and way of doing things impact the culture of an organization in an
environment. Shared beliefs and attitudes of the population play a great role in how marketers at
Mari will understand the customers of a given market and how they design the marketing
message for Major Integrated Oil & Gas industry consumers.

Mari Petroleum is an ISO certified Company for Quality, Environment, Information Security,
Occupational Health & Safety and has achieved Advanced Level in ISO Certification for Social
Responsibility.

The Company plays a pivotal role in ensuring food security of Pakistan as around 80% urea
production in the Country is based on MPCL supplied gas. The Company also supplies gas for
power generation and domestic consumers.
Furthermore MPCL runs various education programs as education is an important facet of
corporate social activity. Mari has also indulged in health care activities such as free health
camps and enthusiastically takes part in providing clean water supply positively effecting
people’s lives everywhere is goes.

Natural
Geographic position influences the activity of MARI Petroleum Company Limited because it
defines the distances between exploitation, refiners and customers. Climate influences the
difficulty of oil exploitation in time of the cold season in north climates, or hot seasons of desert
climate, demand for oil grown in winter because of low speed traffic or energy consumption. On
the other hand petroleum industry influences the natural environment because of pollution and
capacity of changing from natural to artificial. Pollution is represented by fuel emission from
uses of auto vehicles, airplanes, ships and emissions from refineries.

Technological
In MARI Petroleum Company Limited, the technologies are used for exploration, transport, in
refineries, in storage, in researching and development etc. Secondary technologies and
techniques are also used in environment protection, worker’s protection, in improving the
efficiency of the management by using of new software and hardware systems. Other than that,
technologies represented by the complementary products influence the demand for oil by
developing technologies that will reduce the consumption of oil products or replaced them with
other a substitutable product. The complementary products are represented by auto vehicles,
airplanes, ships, petrochemicals (plastics, synthetic fibers, synthetic rubber, detergents, paints,
adhesives, aerosols, insecticides and pharmaceuticals), energy, agricultural product or other
industrial products.

Political
Prices of all types of fuel oil are regulated and set by the Government of Punjab, except the
lubricants. If there is any major PKR devaluation, then the oil prices are also adjusted
accordingly. The legal factors also impose laws and regulations for pollution, social protection,
work protection, subsidies, and the taxes (like the excise rates for fuels and oil price or taxes).