MIRA
INFORM REPORT
|
Report Date : |
04.01.2014 |
IDENTIFICATION DETAILS
|
Name : |
PAKISTAN PETROLEUM LTD. |
|
|
|
|
Registered Office : |
P.I.D.C. House, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
30.06.2013 |
|
|
|
|
Date of Incorporation : |
05.06.1950 |
|
|
|
|
Legal Form : |
Public Parent Company |
|
|
|
|
Line of Business : |
engaged in the exploration,
prospection, development and production of oil and natural gas resources. |
|
|
|
|
No. of Employees : |
2,699 |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
No Complaints |
|
|
|
|
Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2013
|
Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
|
Pakistan |
B2 |
B2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
pakistan ECONOMIC OVERVIEW
Decades of internal political
disputes and low levels of foreign investment have led to slow growth and
underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of
output and two-fifths of employment. Textiles account for most of Pakistan's
export earnings, and Pakistan's failure to expand a viable export base for
other manufactures has left the country vulnerable to shifts in world demand.
Official unemployment is under 6%, but this fails to capture the true picture,
because much of the economy is informal and underemployment remains high. Over
the past few years, low growth and high inflation, led by a spurt in food
prices, have increased the amount of poverty - the UN Human Development Report
estimated poverty in 2011 at almost 50% of the population. Inflation has
worsened the situation, climbing from 7.7% in 2007 to almost 12% for 2011,
before declining to 10% in 2012. As a result of political and economic
instability, the Pakistani rupee has depreciated more than 40% since 2007. The
government agreed to an International Monetary Fund Standby Arrangement in
November 2008 in response to a balance of payments crisis. Although the economy
has stabilized since the crisis, it has failed to recover. Foreign investment
has not returned, due to investor concerns related to governance, energy,
security, and a slow-down in the global economy. Remittances from overseas
workers, averaging about $1 billion a month since March 2011, remain a bright
spot for Pakistan. However, after a small current account surplus in fiscal
year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit
in fiscal year 2012, spurred by higher prices for imported oil and lower prices
for exported cotton. Pakistan remains stuck in a low-income, low-growth trap,
with growth averaging about 3% per year from 2008 to 2012. Pakistan must
address long standing issues related to government revenues and energy
production in order to spur the amount of economic growth that will be necessary
to employ its growing and rapidly urbanizing population, more than half of
which is under 22. Other long term challenges include expanding investment in
education and healthcare, adapting to the effects of climate change and natural
disasters, and reducing dependence on foreign donors.
|
Source : CIA |
Company
name & address
Pakistan Petroleum Ltd.
P.I.D.C. House
Dr. Ziauddin Ahmed Road, P. O. Box 3942
Karachi, 75530
Pakistan
Tel:
92-21-35651480
Fax:
92-21-35680005
Synthesis
Employees:
2,699
Company Type:
Public Parent
Corporate Family: 3
Companies
Traded: Karachi
Stock Exchange: PPL
Incorporation Date: 05-Jun-1950
Auditor: Ernst & Young Ford
Rhodes Sidat Hyder
Financials in: USD
(Millions)
Fiscal Year End: 30-Jun-2013
Reporting Currency: Pakistan
Rupee
Annual Sales:
1,062.3 1
Net Income:
435.2
Total Assets: 2,199.1 2
Market Value: 3,905.3
(06-Dec-2013)
Business
Description
Pakistan
Petroleum Limited (PPL) is a Pakistan-based company engaged in the exploration,
prospection, development and production of oil and natural gas resources. The
Company operates six producing fields across Pakistan at Sui, Kandhkot, Adhi,
Mazarani, Chachar and Hala, and has working interest in twelve partner-operated
producing assets. These include Sui, Kandhkot, Adhi, Mazarani, Chachar,
Qadirpur, Sawan, Miano, Block 22 (Hasan, Sadiq and Khanpur), Manzalai, Makori
and Latif, among others. During the fiscal year ended June 30, 2011, the
Company produced 364,948 million cubic feet of natural gas; 3,111,148 1,664,126
barrels of crude oil, and 20,869 metric tons of liquefied petroleum gas (LPG).
For the fiscal year ended 30 June 2013, Pakistan Petroleum Ltd. revenues
increased 7% to PKR102.8B. Net income applicable to common stockholders increased
3% to PKR42.12B. Revenues reflect Sales increase of 4% to PKR124.45B. Net
income was partially offset by Other Operating Income decrease of 96% to
PKR168.3M (income), Exploration increase of 79% to PKR6.83B (expense). Dividend
per share increased from PKR7.67 to PKR8.75.
Industry
Industry Petroleum and
Natural Gas Extraction
ANZSIC 2006:
0700 - Oil and Gas Extraction
ISIC Rev 4:
06 - Extraction of crude petroleum and natural gas
NACE Rev 2:
06 - Extraction of crude petroleum and natural gas
NAICS 2012:
211111 - Crude Petroleum and Natural Gas Extraction
UK SIC 2007:
06 - Extraction of crude petroleum and natural gas
US SIC 1987:
1311 - Crude Petroleum and Natural Gas
Key
Executives
|
Name |
Title |
|
Asim Murtaza Khan |
Managing Director and Chief Executive Officer |
|
Kamran Wahab Khan |
General Manager - Finance & CFO |
|
M. Yaqub |
General Manager - Business Development |
|
M. Mubbasshar Siddiqui |
Company Secretary |
|
Anwar Hussain Mirza |
General Manager Information Technology |
Financial Summary
|
Stock Snapshot
|
1 - Profit & Loss Item Exchange Rate: USD 1 =
PKR 96.7645
2 - Balance Sheet Item Exchange Rate: USD 1 = PKR
98.97933
Corporate
Overview
Location
P.I.D.C. House
Dr. Ziauddin
Ahmed Road, P. O. Box 3942
Karachi, 75530
Pakistan
Tel: 92-21-35651480
Fax: 92-21-35680005
Quote Symbol -
Exchange
PPL - Karachi Stock Exchange
Sales PKR(mil): 102,797.2
Assets PKR(mil): 217,670.1
Employees: 2,699
Fiscal Year End: 30-Jun-2013
Industry: Oil and Gas Operations
Incorporation
Date: 05-Jun-1950
Company Type: Public Parent
Quoted Status: Quoted
Managing Director and Chief Executive Officer:
Asim Murtaza Khan
Industry Codes
ANZSIC 2006
Codes:
0700 - Oil
and Gas Extraction
ISIC Rev 4 Codes:
06 - Extraction
of crude petroleum and natural gas
0620 - Extraction
of natural gas
NACE Rev 2 Codes:
06 - Extraction
of crude petroleum and natural gas
0620 - Extraction
of natural gas
NAICS 2012 Codes:
211111 - Crude
Petroleum and Natural Gas Extraction
211112 - Natural
Gas Liquid Extraction
US SIC 1987:
1311 - Crude
Petroleum and Natural Gas
1321 - Natural
Gas Liquids
UK SIC 2007:
06 - Extraction
of crude petroleum and natural gas
0620 - Extraction
of natural gas
Business Description
Pakistan Petroleum
Limited (PPL) is a Pakistan-based company engaged in the exploration,
prospection, development and production of oil and natural gas resources. The
Company operates six producing fields across Pakistan at Sui, Kandhkot, Adhi,
Mazarani, Chachar and Hala, and has working interest in twelve partner-operated
producing assets. These include Sui, Kandhkot, Adhi, Mazarani, Chachar,
Qadirpur, Sawan, Miano, Block 22 (Hasan, Sadiq and Khanpur), Manzalai, Makori
and Latif, among others. During the fiscal year ended June 30, 2011, the
Company produced 364,948 million cubic feet of natural gas; 3,111,148 1,664,126
barrels of crude oil, and 20,869 metric tons of liquefied petroleum gas (LPG).
For the fiscal year ended 30 June 2013, Pakistan Petroleum Ltd. revenues
increased 7% to PKR102.8B. Net income applicable to common stockholders
increased 3% to PKR42.12B. Revenues reflect Sales increase of 4% to PKR124.45B.
Net income was partially offset by Other Operating Income decrease of 96% to
PKR168.3M (income), Exploration increase of 79% to PKR6.83B (expense). Dividend
per share increased from PKR7.67 to PKR8.75.
More Business Descriptions
Exploration,
prospecting, development and production of oil and natural gas
Oil & Gas
Exploration & Refinement
Pakistan Petroleum
Limited (PPL) is an independent energy company that carries out exploration,
prospecting, development and production of oil and natural gas resources. It
operates six producing fields in Sui, Kandhkot, Adhi, Mazarani, Chachar and
Hala. The company contributes nearly 20% of the country’s total natural gas
supplies besides producing crude oil, natural gas liquid and liquefied
petroleum gas. It owns and operates 33 exploration blocks, of which 17 areas
are operated by the company and 16 areas are operated by its joint venture
partners. PPL operates producing fields in Balochistan, Sindh and the Punjab,
namely, Sui Gas Field, Kandhkot Gas Field, Adhi Field, Mazarani Gas Field,
Chachar Gas Field, and Hala Field. As a major production facility, Sui Gas Field
(SGF) hosts the country’s largest gas compressor station and a purification
plant. The proven reserves amounted to 11,690 Bcf in this field and the average
daily production of the natural gas and condensate stood at 521 MMscf and 38
bbls respectively for the year 2011. The company has 82 producing wells in this
field. In 2012, the volume of gas sales from the Sui gas field was 170,805
MMscf, as compared to 177,574 MMscf in the previous year. The company owns a
100% working interest in the Kandhkot gas field. The gas from this field is
supplied mainly to WAPDA’s Guddu thermal power station and SNGPL, while a
small quantity is also supplied to SSGCL for Kandhkot town. In 2012, the volume
of gas sold from the Kandhkot gas field amounted to 68,578 MMscf as compared to
54,933 MMscf in the previous year. The company operates 25 producing wells in
this field with average daily production of the natural gas and condensate at
193 MMscf and 24 bbls respectively in 2012. The company has 39% working
interest in Adhi field, that has a average daily production of around 36 MMscf
gas; 120 tons LPG; 1,705 bbl NGL; and 4,606 bbl crude oil for the fiscal 2012.
The company has 11 producing wells in this field. In 2011, the total sales
volume from Adhi field amounted to 13,507 MMscf; 1,875 bbls; and 45,728 tons of
natural gas, NGL and crude oil, and LPG. In Mazarani gas field, the company
owns an 87.5% working interest. For the fiscal ended June 2012, the average
daily production of the natural gas and condensate amounts to 9.5 MMscf and
37.5 bbls respectively. It operates three producing wells in this field. PPL
has 75% of working interest in the Chachar gas field. In 2012, the total
volumes of gas sold amounts to 1,912 MMscf, as compared to 2,202 MMscf in the
previous year. The company has four producing wells in Chachar gas field and
its average daily production stood at 5.6 MMscf gas in 2011-2012. The company
has 65% of working interest in the Hala gas field. For the fiscal year ended
June 2012, the company's average production stood at 5 Mmscf of gas, 267 bbl of
condensate and 16 metric tons of LPG. The company operates one producing well
in this field. PPL has 87.5% of working interest in Mazarani gas field.
Mazarani gas field comprises Gas Processing Plant and 75 Km long gas
transmission pipeline to Sui Southern Gas Company Limited’s (SSGCL) Indus
Right bank transmission system. In 2012, the total volume of gas sold to SSGCL
was 3,390 MMscf as compared to 3,836 MMscf as against the previous year 2011.
By the end of fiscal 2012, the production is around 8 MMscfd gas daily and 30
Barrels daily of condensate.In 2012, the total volumes of gas sold amounts to
1,912 MMscf, as compared to 2,202 MMscf in the previous year. The company has
four producing wells in Chachar gas field and its average daily production
stood at 5.6 MMscf gas in 2012. The company has 65% of working interest in the
Hala gas field. For the fiscal year ended June 2012, the company's average
production stood at 5 Mmscf of gas, 267 bbl of condensate and 16 metric tons of
LPG. The company operates one production well in this field. For the fiscal
2012, the company produced 364,948 mmcf of natural gas; 3,111,148 bbls of crude
oil and natural gas liquid (NGL); and 20,869 tons of LPG. It also recorded net
natural gas, oil and NGL, and LPG reserves of 2,853,611mmcf; 36,519 bbls; and
314,015 tons, respectively. In 2012, the company's daily production stood at
997 mmscf of natural gas, 8,500 bbls of oil and NGL; and 57 million tons of
LPG. In 2012, the company owned and operated 212 natural gas producing wells
and 29 oil and NGL producing wells. By September, 2012, PPL’s proven
recoverable reserves were 2.704 trillion cubic feet (Tcf) of natural gas,
41.613 million barrels (MMbbl) of oil/ NGL and 368,420 tons (tons) of LPG.The
company also engages in the mining, grinding and marketing of Barytes from
Gunga (near Khuzdar) and other minerals from Balochistan province through its
joint venture partnership firm, Bolan Mining Enterprises (BME), with the
provincial government of Balochistan. BME has two grinding mills: one with a
production capacity of 50,000 tons annually and the other newly established
mill in 2011 with a capacity of 100,000 tons annually. Other than PPL, the
company supplies barytes to several companies in Pakistan, Oil and Gas
Development Company Limited, Pakistan Oil Fields Limited, Scomi Oiltools
(formerly known as KMC Oiltools), M-I SWACO (Pakistan) and Baker Hughes
Incorporated. Furthermore, BME engages in iron ore exploration with mining
lease over an area of 13,660 acres in Dilband. BME has two mining licenses,
which is valid till 2026, in the northwest of Nokkundi for mining of iron ore.
Finally, BME also holds an exploration license for lead and zinc, covering an
area of 177,597 acres, in Khuzdar. In July 2012, the company stepped forward
secure contract as operator to explore hydrocarbon in Block 8, Iraq, spanning
an area of 6000 square kilometers in the Diyala and Wasit governorates. In
June, the company announced the acquisition of 100% shares of MND Exploration
& Production Ltd.
Pakistan
Petroleum Limited (PPL) is an upstream energy company. It undertakes
exploration, prospecting, development and production of crude oil and natural
gas resources. The company produces crude oil, natural gas liquid and liquefied
petroleum gas. It owns 33 exploration blocks, out of which 17 areas are
operated by the company and 16 areas are operated by its joint venture
partners. The company operates six producing fields in Sui, Kandhkot, Adhi,
Mazarani, Chachar and Hala – the first two wholly owned by PPL – and has
working interest in 13 partner-operated producing assets. Its major clients
include Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited
and Water and Power Development Authority. In addition, the company engages in
mining, grinding and marketing of Barytes from Gunga (Khuzdar) and other
minerals from the province of Balochistan through its joint venture project,
Bolan Mining Enterprises (BME), with the provincial Government of Balochistan.
PPL is headquartered in Karachi, Pakistan.The company reported revenues of
(Pakistan Rupee) PKR 102,797.17 million during the fiscal year ended June 2013,
an increase of 6.83% over 2012. The operating profit of the company was PKR
59,462.25 million during the fiscal year 2013, an increase of 2.93% over 2012.
The net profit of the company was PKR 42,115.25 million during the fiscal year
2013, an increase of 2.80% over 2012.
Oil and Gas
Extraction
|
|||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
Strategic
Initiatives
Key Organizational Changes
Finally, BME also
holds an exploration license for lead and zinc, covering an area of 177,597 acres,
in Khuzdar. In July 2012, the company stepped forward secure contract as
operator to explore hydrocarbon in Block 8, Iraq, spanning an area of 6000
square kilometers in the Diyala and Wasit governorates. In June, the company
announced the acquisition of 100% shares of MND Exploration & Production
Ltd.GlobalData uses a range of research techniques to gather and verify its
information and analysis. These include primary research, in-house knowledge
and expertise, proprietary databases, and secondary sources such as company
websites, annual reports, SEC filings and press releases. Disclaimer: No part
of this publication may be reproduced, stored in a retrieval system or
transmitted in any form by any means, electronic, mechanical, photocopying,
recording or otherwise, without the prior permission of the publisher,
GlobalData.
The company can
look for exploration and production opportunities in these regions to replace
these depleting oil and gas reserves with new and can maintain continuous oil
and gas production in the future.Acquisition of Seismic DataPPL is continuously
focusing on acquisition of new exploration and reserve to replenish its
depleting reserves and to enhance its existing exploration and production
capacity. The company focuses on acquisition of oil and gas exploration
opportunities both domestically and internationally which can significantly
expand the company’s exploration and production portfolio. It is planning to
acquire about 20,000 line km and 14,000 sq km 2D and 3D seismic, drilling of
about 100 exploratory and 230 development wells over the 10 years. These
acquisitions will help the company to expand its existing service areas, as
well as expansion in other service areas. Acquisition will also help the
company in procuring new technology, increasing customer base and
revenues.Limited Geographical PresencePPL’s operations are principally
limited to oil and natural gas rich regions in the Pakistan.
PPL can expand
its oil and gas asset base in Pakistan and Yemen. The company can look for
exploration and production opportunities in these regions to replace these
depleting oil and gas reserves with new and can maintain continuous oil and gas
production in the future.acquisition of Seismic DataPPL is continuously
focusing on acquisition of new exploration and reserve to replenish its
depleting reserves and to enhance its existing exploration and production
capacity. The company focuses on acquisition of oil and gas exploration
opportunities both domestically and internationally which can significantly
expand the company’s exploration and production portfolio. It is planning to
acquire about 20,000 line km and 14,000 sq km 2D and 3D seismic, drilling of
about 100 exploratory and 230 development wells over the 10 years. These acquisitions
will help the company to expand its existing service areas, as well as
expansion in other service areas.
In May 2012, the
company obtained an onshore exploration gas license in Block 8 from Government
of Iraq under its IV petroleum licensing round. New block 8 is located within
the east central part of Iraq, covering an area of 6,000 sq km. Besides, the
company has plans to acquire MND Exploration and Production Limited, an oil and
gas exploration and production company, with assets established in Pakistan and
Yemen. Presently, MND has assets in Pakistan with 7.9% interest in Sawan gas
field, 40% interest each in Harnai and Ziarat blocks, and 50% stake in Barkhan
block. It also has 20% interest in exploration licence Block 3 in Yemen.
It also has 20%
interest in exploration licence Block 3 in Yemen. PPL can expand its oil and
gas asset base in Pakistan and Yemen. The company can look for exploration and
production opportunities in these regions to replace these depleting oil and
gas reserves with new and can maintain continuous oil and gas production in the
future.acquisition of Seismic DataPPL is continuously focusing on acquisition
of new exploration and reserve to replenish its depleting reserves and to
enhance its existing exploration and production capacity. The company focuses
on acquisition of oil and gas exploration opportunities both domestically and
internationally which can significantly expand the company’s exploration and
production portfolio. It is planning to acquire about 20,000 line km and 14,000
sq km 2D and 3D seismic, drilling of about 100 exploratory and 230 development
wells over the 10 years.
|
|
Helpful |
Harmful |
|
Internal Origin |
Strengths |
Weaknesses |
|
External Origin |
Opportunities |
Threats |
Overview
Pakistan
Petroleum Limited (PPL) is engaged in the exploration, prospecting, development
and production of oil and natural gas resources. The company’s exploration
portfolio consists of 35 exploration blocks, out of which 19 areas are PPL
operated and 16 areas, including three offshore blocks are partner operated.
The company's expanding operating margin is supported by asset base and joint
ventures for efficient utilization of resources. Increasing trade accounts
receivable and declining market share are cause of concern for the company to
look upon. Nevertheless, it can utilize opportunity from growing demand for
energy coupled with strategic expansion initiatives to expand asset portfolio.
However, it faces threat from political instability in Pakistan which may
affect the demand and prices of the oil and gas in the country and thereby affect
the company’s performance.
Strengths
Strategic Joint Ventures
PPL has entered
into numerous strategic joint venture and contracts with various oil and gas
companies both domestically and internationally which has significantly
increased its total production portfolio. Its major joint venture includes
50:50 joint ventures with the provincial Government of Balochistan (GOB) to
form Bolan Mining Enterprises (BME). BME is engaged in the development, mining,
grinding and marketing of barites mineral deposits found near Khuzdar and other
minerals in the province of Balochistan. This joint venture has given the
company access to proven reserves of 1.50 million tons of oil well drilling
grade barites from Gunga mine. The company’s other joint ventures include
50:50 joint venture with OMV in Yemen and with Eni for various oil and gas
blocks in the country. Besides, the company has other joint ventures such as,
POL joint venture, OGDCL joint venture and Government Holdings (Private)
Limited (GHPL) joint venture. These joint ventures have significantly increased
the company’s total production portfolio and geographical presence.
Efficient Asset Base
PPL's strong oil
and gas asset base which supports it to improve revenue growth in the future
and insulate it from future uncertainties. The company operates six oil and gas
producing assets spread across Pakistan, namely, in Sui and Kandhkot, fully
owned by PPL; Adhi, Mazarani, Chachar and Hala and has working interest in
thirteen partner-operated assets. The company has 35 exploration blocks in
total. The company operates 19 exploration blocks of the total and the
remaining 16 are operated by joint venture partners including three offshore
blocks and one block in Yemen. The company has 100% share in eight of the blocks
located at Jungshahi, Kotri, Kotri North, Zamzama South, Naushahro Firoz,
Kharan West, Kharan, Kharan East, and Dera Ismail Khan. Besides, the company
has presence internationally, the block in Yemen in partnership with OMV and
further evaluating opportunities in the Middle East, Central Asia and Africa.
This substancial asset base gives the company a competitive edge over its
peers.
Strong Operating Performance
PPL recorded
strong operating performance despite a challenging business environment across
the globe. The company reported 23% increase in total revenue in 2012 to PKR
96.2 billion as compared to the previous year. In fiscal 2012, profit before
tax increased to PKR 64.5 billion representing 33% growth and profit after tax
increased to PKR 40.9 billion for 2012, registering a growth of 30% from the
previous year's profit. Though the operating margin declined marginally in 2012
to 60% as against 61% in 2011, otherwise the company has strong positive
results as depicted in all its profitability ratios. The reason for the
increase in profitability during the fiscal year as against the previous year
is mainly attributable to net increase in oil and gas sales volumes, impact of
increasing international oil prices and depreciation of Pakistani Rupee against
US Dollar. The company's return on equity (ROE) was 32% at the end of fiscal
year 2012, compared to 33% in 2011, registering a marginal fall from the
previous year. Its return on capital employed (ROCE) was 43% in fiscal year
ended 2012, compared to 46% in 2011, registering a marginal decline of 300
basis points. Also, its total assets turnover, fixed asset turnover, current
ratio and quick ratio were 0.65, 1.89, 4.38 and 4.16, respectively in 2012 as
against 0.68, 1.78, 3.15 and 2.81 in 2011. Increasing profitability ratios
indicate the company’s sturdy performance and its ability to deliver returns
expected by its shareholders. Increasing margins due decreased operating cost
reflect strong operational efficiency of the company.
Weaknesses
Increasing Accounts Receivable
Increasing
accounts receivable affect the company’s competitiveness and profitability.
Its total long term receivable increased to PKR 71.80 m in 2012 from PKR 11.17m
during 2011, showing a tremendous increase of 543% over the period, majorly
coming from National Highway Authority. Of the total receivable, it recorded
trade debts include overdue amount of PKR 28,092 million in 2012, as against
PKR 14,034 million in 2011, majorly overdue from the State controlled entity
(GENCO-II, SSGCL and SNGPL) and PKR 4,916 million in 2012, compared to PKR
2,638 million in 2011, overdue receivable from petroleum refineries (ARL, Byco,
Pak-Arab Refinery Limited, National Refinery Limited and Pakistan Refinery
Limited). The company entered into several factoring agreements with customers,
mainly through third party credit providers on short 90 to 180 day terms.
However, it recorded increased inventories to PKR 3,467.55m in 2012 from PKR
2,272.951m in 2011. Such increasing doubtful debts, along with accounts
receivable, reflect inefficient credit management by the company. In the
backdrop of growing economic recession, the probability of defaults by
creditors increased, which may impact the overall financial position as well as
profitability of the company.
Declining Market Share in Sector
The company’s
declining market share indicates its weak performance over the period, which
would affect its market share in the sector. The company's compound annual growth
rate (CAGR) for revenue was 18.56% during 2007-2012. This was below the
Independent Exploration & Production sector average of 33.15%. A lower than
sector average revenue CAGR may indicate that the company has underperformed
the average sector growth and lost market share over the last four years. The
company's underperformance could be attributed to a weak competitive position
or inferior products and services offering or lack of innovative products and
services.
Opportunities
Increasing Energy Demand
Growing world
economy, population and industrialization has increased the energy demand
across the world which has resulted in the increase in the demand of natural
gas across the world. According to International Energy Association (IEA)
overall global energy demand will grow about 1.6% annually to 2030 this will
significantly increase the demand of oil and gas across the world. Currently,
total oil consumption across the world is around 84 million barrels a day while
oil supply hovers around 82 million barrels a day which lead to oil deficit in
the world. Demand of oil and gas in Pakistan has increased rapidly during the
last couple of years due to the significant growth of the Pakistan economy.
Increase in the demand of oil and gas across the world principally in Pakistan
may increase the sales of the company’s products. It also provides the
company opportunity to further increase its customer base and market presence.
Expansion to New Areas
The company’s oil
and gas exploration portfolio is principally limited to Pakistan only which has
limited oil and gas reserves. Due to rapid increase in exploration and
production activity in Pakistan there has significant decline in the total oil
and gas reserves in the recent years. Regions such as Persian Gulf and Middle
East, Russia and the Caspian and North and West Africa have large oil and gas
reserves. In May 2012, the company obtained an onshore exploration gas license
in Block 8 from Government of Iraq under its IV petroleum licensing round. New
block 8 is located within the east central part of Iraq, covering an area of
6,000 sq km. Besides, the company has plans to acquire MND Exploration and
Production Limited, an oil and gas exploration and production company, with
assets established in Pakistan and Yemen. Presently, MND has assets in Pakistan
with 7.9% interest in Sawan gas field, 40% interest each in Harnai and Ziarat
blocks, and 50% stake in Barkhan block. It also has 20% interest in exploration
licence Block 3 in Yemen. PPL can expand its oil and gas asset base in Pakistan
and Yemen. The company can look for exploration and production opportunities in
these regions to replace these depleting oil and gas reserves with new and can
maintain continuous oil and gas production in the future.
Acquisition of Seismic Data
PPL is
continuously focusing on acquisition of new exploration and reserve to
replenish its depleting reserves and to enhance its existing exploration and
production capacity. The company focuses on acquisition of oil and gas
exploration opportunities both domestically and internationally which can
significantly expand the company’s exploration and production portfolio. It
is planning to acquire about 20,000 line km and 14,000 sq km 2D and 3D seismic,
drilling of about 100 exploratory and 230 development wells over the 10 years.
These acquisitions will help the company to expand its existing service areas,
as well as expansion in other service areas. Acquisition will also help the
company in procuring new technology, increasing customer base and revenues.
Threats
Limited Geographical Presence
PPL’s
operations are principally limited to oil and natural gas rich regions in the
Pakistan. Even through in the recent years the company has expanded its oil and
gas portfolio in international oil and gas locations such as Yemen, still most
of its oil and gas production come from Pakistan only. Its oil and gas
marketing and distribution are limited to Pakistani customers only. The
company’s limited geographical presence exposes it to various risks such as
weather condition in the region and political or regulatory condition in the
region. It also limits the availability of customers and various resources.
Laws and Regulations
PPL operations are subject to various laws and
regulations both in Pakistan and in foreign. Its operations are subject to laws
and regulations related to the exploration for and the development, production
and transportation of oil and natural gas. The company is also subject to environment
laws and regulation pertaining to health, safety and emission of pollutants.
Its operations in Balochistan is effected by the security conditions there,
which has disrupting its operations and restraining its’ exploration efforts.
Currently these laws and regulation does not have much impact on the
company’s operations but if there are any significant changes in these laws
and regulations or new law and regulation is introduced then that can adversely
affect the company’s operations.
Political Instability
Pakistan Petroleum Limited (PPL) is engaged in the
exploration, prospecting, development and production of oil and natural gas
resources. The company’s exploration portfolio consists of 35 exploration
blocks, out of which eight areas are PPL operated and 16 areas, including three
offshore blocks are partner operated. The company's expanding operating margin
and efficient uses of its available resources led to increase confidence in the
investors in the market. Continuation of Political instability in Pakistan may
affect the demand and prices of the oil and gas in the country and thereby
affect the company’s performance.
|
Corporate Family |
Corporate
Structure News: |
|
|
Pakistan
Petroleum Ltd. |
|
Pakistan Petroleum Ltd. |
|
|
|
|
|
Company
Name |
Company
Type |
Location |
Country |
Industry |
Sales |
Employees |
|
|
Pakistan Petroleum Ltd. |
Parent |
Karachi |
Pakistan |
Petroleum and Natural Gas Extraction |
1,062.3 |
2,699 |
|
|
Tullow Pakistan (Developments)
Limited |
Subsidiary |
Islamabad |
Pakistan |
Support Activities for Mining |
|
50 |
|
|
Ppl Europe E&P Ltd. |
Subsidiary |
London |
United Kingdom |
Petroleum and Natural Gas Extraction |
8.9 |
13 |
|
Competitors
Report
|
Company Name |
Location |
Employees |
Ownership |
|
Dewan Petroleum (Pvt) Limited |
Islamabad, Pakistan |
|
Private |
|
Mari Petroleum Company Ltd |
Islamabad, Pakistan |
371 |
Public |
|
Pakistan Oilfields Ltd. |
Rawalpindi, Pakistan |
808 |
Public |
|
Saif Energy Limited |
Islamabad, Pakistan |
1,000 |
Private |
Executive report
|
Board
of Directors |
|
|
|
|
|||||||
|
Director |
Director/Board Member |
|
|||||||
|
Board Member |
Director/Board Member |
|
|||||||
|
Non-Executive Director |
Director/Board Member |
|
|||||||
|
||||||||||
|
Non-Executive Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Non-Executive Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Non-Executive Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Director |
Director/Board Member |
|
|
||||||
|
Director |
Director/Board Member |
|
|
||||||
|
Director |
Director/Board Member |
|
|
||||||
|
Non-Executive Director |
Director/Board Member |
|
|
||||||
|
Board Member |
Director/Board Member |
|
|
||||||
|
Board Member |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Non-Executive Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Board Member |
Director/Board Member |
|
|
||||||
|
Non-Executive Director |
Director/Board Member |
|
|
||||||
|
||||||||||
|
Executives |
|
|
|
|
||||
|
Managing Director and Chief Executive
Officer |
Chief Executive Officer |
|
||||
|
|||||||
|
General Manager Exploration |
Division Head Executive |
|
|
|||
|
General Manager - Human Resources |
Division Head Executive |
|
|
|||
|
General Manager Production |
Division Head Executive |
|
|
|||
|
General Manager Production |
Division Head Executive |
|
|
|||
|
General Manager-Internal Audit |
Division Head Executive |
|
|
|||
|
General Manager - Finance & CFO |
Division Head Executive |
|
|
|||
|
|||||||
|
General Manager Corporate Services |
Division Head Executive |
|
|
|||
|
General Manager Information Technology |
Division Head Executive |
|
|
|||
|
General Manager Projects |
Division Head Executive |
|
|
|||
|
General Manager-Operations |
Division Head Executive |
|
|
|||
|
General Manager Commercial & Supply
Chain |
Division Head Executive |
|
|
|||
|
General Manager - Business Development |
Division Head Executive |
|
|
|||
|
Senior General Manager |
Division Head Executive |
|
|
|||
|
Chief Operating Officer, Deputy Managing
Director |
Managing Director |
|
|
|||
|
|||||||
|
Advisor to the CEO & MD |
Managing Director |
|
|
|||
|
|||||||
|
Company Secretary |
Company Secretary |
|
|
|||
|
|||||||
|
Head of Internal Audit |
Accounting Executive |
|
|
|||
Significant
Developments
Pakistan
Petroleum Ltd Announces Final Cash Dividend Aug 21, 2013
Pakistan
Petroleum Ltd announced a final cash dividend for the year ended 30 June, 2013
at PKR 5.50 per share (i.e. 55%) on Ordinary shares. This is in addition to an
interim dividend at PKR 5.00 per share (Le. 50%) on Ordinary and PKR 3.00 per
share (i.e. 30%) on Convertible Preference shares already paid to shareholders
in March, 2013. (iii) Bonus shares in proportion of 1 Ordinary share for every
5 Ordinary shares held (i.e. 20%). Requisite certificate from the auditors to
the effect that free reserves and surpluses retained after the issue of the
Bonus shares are not less than 25% of the increased capital, will be submitted
in due course.
Polskie Gornictwo
Naftowe i Gazownictwo SA Starts Gas Production in Pakistan with Pakistan
Petroleum Ltd Jun 26, 2013 reported that Polskie Gornictwo Naftowe i
Gazownictwo SA (PGNiG) has started gas production at its Kirthar concession in
the south of Pakistan, the Company's second overseas production site. According
to the Company, during test production the wells in Pakistan would provide
around 100 million cubic meters of gas per year. PGNiG holds a 70% stake in the
Kirthar licence, with the remainder belonging to Pakistan Petroleum Ltd.
Pakistan
Petroleum Ltd Announces Completion Of Transaction For Acquisition Of MND
Exploration And Production Ltd Mar 22, 2013
Pakistan
Petroleum Ltd announced that it has completed the acquisition of MND
exploration and production Ltd. Terms of the transaction were not disclosed.
Pakistan
Petroleum Ltd's Chairman Resigns Feb 27, 2013
Pakistan Petroleum Ltd announced that Mr.
Hidayatullah Pirzada has resigned as Chairman of the Board of the Company.
Pakistan Petroleum Ltd to Pay FY 2012-2013 Interim
Dividend Feb 04, 2013
Pakistan Petroleum Ltd announced that it is to pay
interim dividend for the year ending June 30, 2013 at PKR 5.00 per share (i.e.
50%) on fully paid ordinary share capital and PKR 3.00 per share (i.e. 30%) on
fully paid convertible preference share capital to members whose names appear
on the Register of Members at the close of business on March 13, 2013.