OGDCL

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. This chapter also presents functions, projects, product line, mission and objectives as well.

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 focuses on human resource department of OGDCL. It explains the administration and personnel department and its practices in the organization in detail.

5-Chapter 5

This chapter is all about SWOT analysis in which strength, weaknesses, opportunities and threats are discussed.

6-Chapter 6

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'semergence, 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.

1.1 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 gasfields 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.

1.4OIL 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.

1.4.1Aims 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 .

1.5BACKGROUND 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 COMSAT Institute of information technology. 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 Personnel and Human Resource Department. 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, promotion criteria and all such matters. 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.

2.3 CORE VALUES
  • Merit
  • Integrity
  • Team Work
  • Safety
  • Dedication
  • Innovation

2.4OBJECTIVES

  1. Developing E & P Work Flow Models for Data Integration and connectivity.
  1. Conduct geoscientific, algorithms and systems architecture research leading to the development of robust, interactive and user-friendly geosciences applications software that are tightly integrated into the workflow environment.
  2. Detailed testing of the developed applications to achieve the highest performance.
  3. Detailed testing of the developed applications to achieve the highest performance.
  4. Training and systems support to the end - users.

2.5Historical Background of the Company

2.5.1Establishment

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.

2.5.2Development

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.

2.5.3Name & Address of Company

Oil and Gas Development Company Limited (OGDCL). House, Jinnah Avenue, Blue Area, Islamabad, Pakistan.

Telephone: 051-9209701

Fax No:051-9209708

2.5.4Name of Chief Executive

Mr. Najam Khan Hydar (Managing Director).

2.6Product line

In the product line of OGDCL, the following are its products by which it is earning profits:

  1. Crude Oil.
  2. Gas.
  3. LPG.
  4. Sulphur.
  5. Gasoline/High and Low Speed Diesel.
  6. Kerosene Oil.
  7. Naphtha.
  8. Solvent Oil.

2.7FUNCTION OF OIL AND GAS DEVELOPMENT COMPANY

The main functions of the Corporation are:-

  1. To plan, organize and implement programmes of exploration of development of oil and as resources.
  2. To carry out geological, geophysical and other surveys for the exploration of oil and gas.
  3. To carry out drilling and other prospecting operations to prove and estimate the reserves of oil and gas.
  4. To produce, refine and sale oil and gas
  1. To perform other functions as the Federal Government may from time to time assign to the Corporation.

2.8PROJETS

2.8.1QADIR 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.

2.8.2CHANDA 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.

2.8.3BOBI 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

2.8.4DHODAK 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 projects will result in substantial enhancement of production of oil, gas, LPG and sulpher.

Mega Projects

Projects / Completion / Estimated Cost / Prod Capacity
Chanda
Development
Project / January, 2007 / $ 9 Million / LPG: 25 MTD
Gas: 8.5 MMscfd
Dakhni Expansion Project / February, 2009 / Rs.1803 Million / Oil.: 720 BPD
Gas: 12MMscfd
LPG: 12 MTD
Sulphur: 80 MTD
Qadirpur Compression Project / September, 2008
December, 2007 / $ 160 Million / a). To maintain plateau of gas production 650 MMscfd
b). Additional 100 MMscfd gas
Dhodak Expansion Project / A Bid to be invited afresh / $ 50 Million / Oil.: 4000 BPD
Gas: 64 MMscfd
LPG: 258 MTD
Uch-II Development Project / March, 2009
(As conveyed by PPIB) / $ 250 Million / Gas: 200 MMscfd
TAY Development Project / A Bid to be invited afresh / $ 54.1 Million / Oil.: 2500 BPD
Gas: 28 MMscfd
LPG: 85MTD
Sinjhoro / A Bid to be invited afresh / $ 89 Million / Oil.: 2940 BPD
Gas: 25 MMscfd
LPG: 224 MTD

Chapter 3

ORGANIZATIONAL STRUCTURE

3.1MAIN 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:

1.OGDCL Head Office, Jinnah AvenueIslamabad.

2.Pirkoh Gas Company Private Limited, Islamabad.

3.OGDCL Regional Office, Shafi Chamber, Karachi

4.OGDCL Regional Office, Multan

5.OGDCL Liaison Office, Quetta

6.OGDCL Liaison Office, Sukkur

7.OGDCLWestWharf Office, Karachi

8.OGDCL Base Store, Islamabad

9.OGDCL Base Store, Khadiji, Karachi

10.OGDCL Base Store, Korangi

11.OGDCL Base Store, Kot Addu

12.OGDCL Base Store, Kot Sarang

13.MedicalCenters, Islamabad, RawalpindiKarachi

14.OGDCL Workshops, Islamabad

15.Oil & Gas Training Institute, Islamabad.

3.2 MAIN DEPARTMENTS

Corporate Department

  1. Administration Department
  1. Human Resource Department
  1. Personnel Department
  1. Security Department
  1. Legal / Regulation Department
  1. Communication Department
  1. Procurement Department
  1. Stores Department
  1. Finance & Accounts Department
  1. Audit Department

E&P Departments

  1. Exploration Department
  1. Exploitation Department
  1. Production Department
  1. Process Department

Technical Services Department

  1. Drilling Department
  1. Data Logging Department
  1. Mud Engineering Department
  2. Well Services Department
  1. Cementation Department
  1. Geological Well Supervision Department
  1. Engineering Department
  1. Wire line Logging Department
  1. Geological Department,Data Processing Department

3.3 Organizational Structure

BOARD OF DIRECTORS


/
Jalaluddin Qureshi /
/ /
/
/
Overview of Board of Directors
Arshad NasarChairman & CEO
  • Previously held various positions at Caltex / Chevron since 1968 including Country Head since 1998
  • Over 37 years of experience in Pakistan and overseas
  • Director on various Boards
  • Chairman of the Oil Companies’ Advisory Committee, President of the American Business Council

Al-Syed Abdul Qadir Jamaluddin Al-GillaniDirector
  • Elected for first term as MNA for the PML(Q) party
  • Member of the Parliamentary Committee on Water and various National Assembly Committees

Alman AslamDirector
  1. Currently manages his own investment banking business
  2. Previously employed at Citigroup with positions including Head of Corporate Finance CEEMEA

Jalaluddin Qureshi Director
  1. Currently serving as joint Secretary, Ministry of Finance.
  2. Associate Member and Fellow Member of Institute of Cost & Management Accounts of Pakistan.

Azam FaruqueDirector
  1. Currently CEO of Cherat Cement Co Ltd, a member company of the Ghulam Faruque Group of companies
  2. Previous positions: non-executive member of the Central Board of the State Bank, member of the National Emergency Economic Committee, etc

Asad UmarDirector
  1. President and CEO of Engro Chemical Pakistan Ltd
  2. On the Board of Directors for various companies including PSO and Pakistan Dairy Development Co.

Khalid RafiDirector
  1. Founding member of Si3, Chairman of Ferguson Associates
  2. Former Senior Partner of A.F. Ferguson (PwC)

Naeem Malik Director**
  • Director General of Petroleum Concessions (DGPC), Ministry of Petroleum & Natural Resources
  • Director on Boards of SNGPL, SSGCL, Pirkoh Gas Company, Mari Gas Company Limited, etc

Aslam KhaliqDirector
  1. Previously held several roles at Pakistan Tobacco (BAT Pakistan), former Chairman of Pakistan Tobacco
  2. On various Boards including Jahangir Siddiqui Capital Markets

Sikander Hayat JamaliDirector
  1. Chairman of the Balochistan Pakistan Red Crescent Society
  2. On the Board of Directors of the National Bank of Pakistan, Pakistan Reinsurance Company, etc
  3. Ex-secretary of the Minister of Education

Zahid MajidDirector
  • Sui Southern Gas Company Limited

3.4COMMENTS 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: