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Report Date : |
03.11.2014 |
IDENTIFICATION DETAILS
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Name : |
PAKISTAN PETROLEUM LIMITED |
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Registered Office : |
PIDC House, Dr. Ziauddin Ahmed Road, P.O.
Box 3942, Karachi 75530 |
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Country : |
Pakistan |
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Date of Incorporation : |
1950 |
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Com. Reg. No.: |
0000378 |
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Legal Form : |
Listed Company |
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Line of Business : |
Subject is engaged in exploration,
prospecting, development and production of oil and natural gas resources |
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No of Employees : |
2,685 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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) |
|
Pakistan |
B2 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
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.
|
Source
: CIA |
PAKISTAN PETROLEUM
LIMITED
|
Registered
Address |
|
PIDC House, Dr. Ziauddin Ahmed Road, P.O.
Box 3942, Karachi 75530, Pakistan |
|
Tel # |
92 (21) 111-568-568 |
|
Fax # |
92 (21) 35680005,
35682125 |
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Website |
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Address |
House No. 12, Street 72, F-8/3, Islamabad,
Pakistan. |
|
Tel # |
92 (51) 2260770, 2250870 |
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Fax # |
92 (51) 2261466 |
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a. |
Nature of Business |
Engaged in exploration, prospecting,
development and production of oil and natural gas resources |
|
b. |
Year Established |
1950 |
|
c. |
Registration # |
0000378 |
|
M/s Ernst & Young Ford Rhodes Sidat
Hyder (Chartered Accountants) |
|
Pakistan Petroleum Limited (PPL) was incorporated in Pakistan in 1950. During the year the Government of Pakistan (GOP) disinvested its equity equivalent to 15% of the paid-up share capital of the Company through an initial public offering. The Company was listed on all the three stock exchanges of Pakistan. |
|
Names |
Designation |
|
Mr. Waqar A. Malik Mr. Arshad Mirza Mr. Aftab Nabi Mr. Asif Baigmohamed Mr. Imtiaz Hussain Zaidi Mr. Muhammad Ashraf Iqbal Baluch Mr. Nadeem Mumtaz Qureshi Mr. Osman Khalid Waheed Mr. Saeedullah Shah Mr. Shahbaz Yasin Malik |
Chairman Chief Executive Officer / Managing Director Director Director Director Director Director Director Director Director |
|
Categories |
Percentage (%) |
|
Directors, CEO and their spouse and minor
children Associated Companies, Undertakings and
related parties NIT & ICP Banks, Development Financial Institutions, Non-Banking
Financial Institutions Insurance Companies Modarabas & Mutual Funds Government of Pakistan Privatization Commission of Pakistan General Public Others |
--- 7.41 0.15 1.07 0.43 0.98 67.51 3.55 4.12 14.78 |
Pakistan Petroleum
Provident Fund Trust Company (Pvt) Limited, Pakistan.
Engaged in exploration, prospecting,
development and production of oil and natural gas resources
2,685
Product Unit Actual Production for
the year
(Group’s
share)
Natural
Gas MMCF 316,567
Crude Oil BBL 3,824,743
NGL / Condensate BBL
861,074
LPG M.Ton 27,343
·
Allied
Bank Limited, Pakistan.
·
Askari
Bank Limited, Pakistan.
·
Bank
Alfalah Limited, Pakistan.
·
Bank
Al-Habib Limited, Pakistan.
·
Citibank
N.A., Pakistan.
·
Deutsche
Bank AG, Pakistan.
·
Faysal
Bank Limited, Pakistan.
·
Habib
Bank Limited, Pakistan.
·
Habib
Metropolitan Bank Limited, Pakistan.
·
MCB
Bank Limited, Pakistan.
·
National
Bank of Pakistan.
·
NIB
Bank Limited, Pakistan.
·
Standard
Chartered Bank, Pakistan.
·
United
Bank Limited, Pakistan.
Extremely Sound
The Company’s exploration
and development activities continued during the year with vigour and
dedication. The Company remained aligned with its aggressive exploration
programme, in line with its strategy to accelerate hydrocarbon exploration in
order to meet the country’s growing energy needs. Company achieved impressive
financial results during 2013-14, with profit after tax increasing to Rs 51.4
billion, up by 22.5 percent over last year, translating into an EPS of Rs
26.08. The increase in profits is largely due to combined effect of net
increase in oil sales volumes and depreciation of Pakistani Rupee against US
Dollar. The Company has clearly come far over the past few years and in the
process developed a strong capital and asset base that adequately supports its exploration
and development initiatives. The Company’s recent exploration efforts resulted
in gas / condensate discovery from Sharf X-1 well in PPL operated Gambat South
Block and a tight gas discovery from Naushahro Firoz X-1 well in PPL operated
Naushahro Firoz Block. An oil discovery was also made from Ghauri X-1 well, in
partner operated Ghauri Block. Presently PPL’s share in the country’s total
natural gas production stands at around 21%. PPL continues to strive for
enhancing its hydrocarbon reserves and optimising production in order to
maintain its position as the premier exploration and production Company of the
country. During the year, 11 new exploration blocks were granted to PPL in
which fast track exploration activities are already underway. With extensive
increase in the size of its exploration and production portfolio, the operating
environment in the Company has become increasingly demanding with added
emphasis on safe operating procedures. The Company recognizes safety as the key
component of operational excellence and gives utmost importance to training of
employees and contractors to enhance safety awareness by actively incorporating
industry best practices in the overall operating setup.
The sales revenue
of Rs 119.8 billion for the year was higher by 17% compared to Rs 102.3 billion
of previous year, resulting in increased profitability of Rs 51.4 billion for
the year as compared to Rs 41.9 billion during the previous year. Sales revenue
during the current year has increased
due to the combined effect of net increase in oil sales volumes, decrease in
gas sales volumes and depreciation of Pakistani Rupee against US Dollar.
Increase in gas sales volumes from Adhi, Hala, Tal, Nashpa and Latif fields,
oil sales volumes from Hala, Tal and Nashpa fields, and commencement of
production from Kirthar, Sukhpur and Ghauri fields, were partially offset by
decrease in gas sales volumes from Sui, Kandhkot, Sawan and Gambat fields, and
decrease in oil sales from Adhi field. The Earnings per Share of the Company
for the year stood at Rs 26.08 against EPS of Rs 21.28 for 2012-13 Field
expenditures during the year increased by 7% as compared to the previous year
mainly due to 2D and 3D seismic data acquisition cost in Gambat South, Zamzama
South, Kotri, Malir, Nashpa and Jati blocks and increase in depreciation and
amortisation charges due to capitalisation of new wells during the current
year. Other operating income of Rs 6.4 billion was earned mainly due to mark-up
on placements of term deposits with Banks, Treasury Bills and profits on
investments in PIBs and Mutual Funds.
The Company
operates in a challenging environment with a degree of uncertainty inherent in
the E&P business which may adversely affect its operations and
profitability. The Company has tailored its business strategies accordingly to
effectively address the risks and has taken concrete steps for identification
of potential risks, their evaluation and prioritisation so that timely and appropriate
actions can be taken to keep the risk level within tolerable limits. The
Company is also committed for implementing Enterprise Risk Management best
practices in line with the framework proposed by the Committee of Sponsoring
Organisations of the Treadway Commission (COSO). In compliance with Public
Sector Companies (Corporate Governance) Rules 2013, a separate Board Risk
Management Committee has been setup to advise the Board on Company’s overall
risk appetite, tolerance and strategy and oversee current risk exposures of the
Company and future risk strategy. The Committee shall also review risk
assessment processes and Company’s ability to identify and manage new risk
types.
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 103.20 |
|
UK Pound |
1 |
Rs. 166.25 |
|
Euro |
1 |
Rs. 131.15 |
Subject Company is well known and directors are resourceful and experienced
businessmen. Payments to creditors are reported as normal. Company can be
considered for normal business dealings at usual trade terms and conditions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.41 |
|
|
1 |
Rs.98.06 |
|
Euro |
1 |
Rs.77.19 |
INFORMATION DETAILS
|
Analysis Done by
: |
KAR |
|
|
|
|
Report Prepared
by : |
TPT |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
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 |
|
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 |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
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 |
|
<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.