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Report Date : |
03.11.2014 |
IDENTIFICATION DETAILS
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Name : |
OIL & GAS DEVELOPMENT COMPANY LIMITED |
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Registered Office : |
OGDCL House,
Plot No.3, F-6/G-6, Blue Area, Jinnah Avenue, Islamabad |
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Country : |
Pakistan |
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Date of Incorporation : |
1961 |
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Com. Reg. No.: |
0038403 |
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Legal Form : |
Listed Company |
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Line of Business : |
Subject
undertake exploration and development of oil and gas resources, including
production and sale of oil and gas and related activities |
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No of Employees : |
9,928 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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 – June 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
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Pakistan |
B2 |
B1 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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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 was 6.6% in 2013, 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. 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 the following two years, 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 3.5% per year
from 2008 to 2013. 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.
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Source
: CIA |
OIL & GAS
DEVELOPMENT COMPANY LIMITED
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Registered Address |
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c |
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Tel # |
92 (51) 9209811, 18 (8 Lines) |
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Fax # |
92 (51) 9209804, 9209806 |
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Email |
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a. |
Nature of Business |
The Company was established to undertake
exploration and development of oil and gas resources, including production and
sale of oil and gas and related activities formerly carried on by Oil and Gas
Development Corporation, which was established in 1961 |
|
b. |
Year Established |
1961 |
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c. |
Registration # |
0038403 |
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Address |
Shafi Chambers, Club Road, Karachi,
Pakistan. |
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Tel # |
92 (21) 35681690, 35681687, 35684671,
35684674 |
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Fax # |
92 (21) 35684923 |
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A.F.Ferguson & Co. (Chartered Accountants) KPMG Taseer Hadi & Co. (Chartered Accountants) |
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Oil and Gas Development Company Limited
(OGDCL), “the Company”, was incorporated on 23 October 1997 under the
Companies Ordinance, 1984. The Company is listed on all the three stock
exchanges of Pakistan and its Global Depository Shares (1GDS = 10 ordinary
shares of the Company) are listed on the London Stock Exchange. |
|
Names |
Designation |
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Mr. Zahid Muzaffar Mr. Abid Saeed Mr. Saif Ullah Chattha Mr. Iskander Mohammed Khan Mr. Hamid Farooq Mr. Muhammad Ali Tabba Mr. Zafar Masud Prince Ahmed Omar Ahmedzai Sayed Shafqat Ali Shah Mr. Rehmat Salam Khattak Mr. Muhammad Yawar Irfan Khan Mr. Muhammad Rafi |
Chairman Director Director Director Director Director Director Director Director Director Director MD & CEO |
A. Subsidiary
(1) Pirkoh Gas Company (Pvt) Limited, (A 100% owned subsidiary)
The Company was established to undertake exploration and development of
oil and gas resources, including production and sale of oil and gas and related
activities formerly carried on by Oil and Gas Development Corporation, which
was established in 1961
|
Chanda, Tando Alam, Thora, Sono, Bobi, Pasaki, Lashari, Toot, Chak
Naurang, Fimkasar, Dakhni, Sadkal, Rajian, Missa Kiswal, Kal, Dhodak, Missan,
Loti, Qadirpur, Nandpur, Uch, Daru, Kunnar, Palli and Pirkoh. |
|
Jandran, Basal, Shakardarra, Hala, Kotra, Zin, Rakhni, Risaldar-B
Bitrisim, Siah Koh, Tando Allah Yar, Nim, Karamkhel, Sinjhoro, Gurgalot,
Khewari, Sohawa, Kharar, Sulaiman, Chak Naurang and Qadirpur. |
9,928
regular & contractual employees
|
Considering the nature of the Company’s
business, it is impracticable to provide the information regarding capacity |
Financial year 2013-14 emerged as the landmark in the history of OGDCL with
its Profit after Taxation increasing by 35.8% and reaching a new record level
of Rs 123.915 billion (2012-13: Rs 91.273 billion) translating into Earnings
per Share of Rs 28.81 (2012-13: Rs 21.22). The Company’s Sales Revenue exhibit
a growth of 15.1% surging to Rs 257.014 billion (2012-13: Rs 223.365 billion).
These improved results indicate sustainable business growth and financial
strength to undertake future exploration & development programs leading to
increased shareholder returns in the future OGDCL’s financial performance
witnessed during the year has been substantially driven by increase in oil and
gas production coupled with favorable exchange rate. In addition, increase in
realized prices of crude oil and gas averaging US$ 87.71/barrel and Rs
282.95/Mcf compared with US$ 83.40/barrel and Rs 265.88/Mcf respectively during
the preceding year, also contributed positively in the Company’s financial
growth. Furthermore, higher other income owing to increase in return on
investments and bank deposits is another significant factor adding to the
Company’s improved financial performance.
Being the leading E&P Company of Pakistan, OGDCL is making enormous
contribution towards the national exchequer on account of corporate tax,
royalty, general sales tax, excise duty and dividend. During the year 2013-14,
a sum of Rs 132.261 billion was contributed to the national exchequer. In
addition, the Company’s oil and gas production has significantly contributed
towards foreign exchange savings as import substitution. Moreover, OGDCL was
declared as top corporate tax payer by the Federal Board of Revenue (FBR) as it
paid the highest amount of tax in the “Companies’” category in the Tax Year
2013.
Keeping in view prevailing energy crisis in the Country, OGDCL, being a
state owned enterprise and market leader in E&P sector of Pakistan is
cognizant of its responsibility to play its part in meeting the growing energy
demands of oil and gas in the Country. In this pursuit, the Company on the
exploration front aims to create value by maintaining a mixed portfolio of
onshore exploration concessions in the established, promising and unexplored
areas while keeping a balance between accelerating exploration activities and
risk mitigation with acceptable drilling success ratio and focus on reserve
addition. As part of the Company’s work program relating to twenty nine (29)
new exploratory blocks, an extensive work program has been designed to tap
additional reserves and further enrich the portfolio. On the production front,
the Company is endeavoring to explore new possibilities in addition to
improving the existing hydrocarbon production by employing latest production
techniques accompanied with expediting connectivity of new exploratory and
development wells in the system. As a result of pursuing an aggressive
production enhancement strategy, the Company during the year witnessed
increased crude oil and gas production in comparison with the preceding year.
Additionally, with a quality pipeline of ongoing development projects,
significant surge in the production volumes is expected upon completion of
these projects supporting the Company’s growing trend of production in the
years to come. In addition to the above, OGDCL will continue to focus on
formulation of joint ventures with leading E&P companies both within the
Country and abroad to introduce new partners with complementary skills for
ensuring that ventures and projects are value driven. The Company also plans to
increase capital expenditures governed by strong financial discipline in the
coming years to seek production growth and improve future returns. Looking
forward, OGDCL based on its aggressive exploration strategy coupled with near
term completion of development projects and a strong financial position is well
positioned to deliver upstream growth and improved profit margins. With
operational and technical expertise in hand, the Company will continue to
undertake new development activities and accept new challenges for adding
reserves and optimizing production while keeping with the long held strategy of
creating and maximizing value for shareholders.
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(1) Allied Bank Limited, Pakistan. (2) Askari Bank Limited, Pakistan. (3) Bank Alfalah Limited, Pakistan. (4) Bank Al Habib Limited, Pakistan. (5) Barclays Bank PLC (6) Citibank N.A. (7) Deutsche Bank, Pakistan (8) Faysal Bank Limited, Pakistan. (9) Habib Bank Limited, Pakistan. (10) Habib Metropolitan Bank Limited, Pakistan. (11) HSBC Bank of Middle East, Pakistan. (12) MCB Bank Limited, Pakistan. (13) National Bank of Pakistan (14) NIB Bank Limited, Pakistan. (15) Soneri Bank Limited, Pakistan. (16) Standard Chartered Bank, Pakistan. (17) United Bank Limited, Pakistan. |
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. To revive 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 programme 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. 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. Toot 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.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.41 |
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|
1 |
Rs.98.06 |
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Euro |
1 |
Rs.77.19 |
INFORMATION DETAILS
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Analysis Done by
: |
KAR |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation
is considered normal. Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is calculated
from a composite of weighted scores obtained from each of the major sections of
this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment record
(10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.