OGDCL earns Rs 20.673 billion net profit

KARACHI (October 13 2003): The Oil & Gas Development Company Limited (OGDCL) earned a net profit of Rs 20.673 billion in the year ended on June 30, 2003, showing an increment of 23 percent compared with previous year because of higher sales and increase in number of discoveries.

The government had established the Oil and Gas Development Corporation as a statutory corporation in 1961 to undertake exploration and development of indigenous oil and gas resources in the country.

In 1997, the Corporation was converted into a public limited company (under the Companies Ordinance, 1984) and renamed Oil and Gas Development Company Limited with the government retaining 100 percent shareholding.

OGDCL has been operating on self-financing basis since 1989 and the Company achieved a financial landmark in FY2003 posting its highest ever profit after tax of Rs 20.7 billion with a net profit ratio of 46 percent, making it one of the most profitable companies in Pakistan.

OGDCL has the largest oil and gas asset portfolio in Pakistan, as outlined below:

OGDCL's portfolio of developed and producing fields comprises 35 operated fields and 15 non-operated interests. Its operated portfolio includes four major developed gas fields (Qadirpur, Uch, Pirkoh and Dhodak), in addition to a number of other sizeable oil and gas fields (Pasakhi, Kunnar, Fimkassar, Kal, Tando Adam, Sono, Nandipur/Panjpir, Sadqal, Loti, Chanda and others).

The asset portfolio also includes significant non-operated working interests in fields operated by other E&P companies including Adhi, Bhit, Miano, Kadanwari, Pindori and Badin.

As of June 30, 2003, the remaining proven plus probable reserves of OGDCL operated portfolio were 9.228 trillion cubic feet raw gas and 164.25 million barrels oil.

During FY2003, sales from OGDCL operated fields and non-operated interests averaged 817 million cubic feet per day gas and 25,800 barrel per day oil.

OGDCL has devoted significant investment to exploration activities over the past four decades, resulting in a number of major discoveries.

The Company continues to invest in exploration activities in order to sustain and improve its production performance.

This is evident from the Company's recent exploration successes and extensive current exploration program wherein it currently operates 17 exploration concessions and holds non-operated working interests in another 5 exploration concessions.

OGDCL asset portfolio has additional commercial potential due to the high reserves to production ratio and the relatively modest application of proven and/or advanced technology.

In addition, the current production rate of several OGDCL fields could be enhanced substantially through the application of modern technologies and field management techniques.

In particular, Qadirpur, Uch and Dhodak have the potential to produce at significantly higher levels than current production.

The Company management is cognisant of this potential and has initiated a number of development and expansion projects, which are currently under implementation. These projects are expected to improve the production of oil, gas and liquefied petroleum gas from various OGDCL fields, including Bobi, Qadirpur, Chanda, Dakhni and Dhodak.

The sale of OGDC would make the company the second largest on the country's stock exchange, after Pakistan Telecommunication Co, and will raise the market capitalisation by at least $2 billion to $20 billion, a dealer at the stock market said.

The company “has the potential to grow in terms of earnings and reserves,” he said.

The Karachi Stock Exchange, Pakistan's biggest bourse, approved the listing plans of Oil and Gas Development, Moin Fudda, managing director of the exchange, said.

Pakistan has also invited bids for the sale of 51 percent stake in the company next year. Merrill Lynch & Co and Pakistan-based Khadim Ali Shah Bukhari & Co are advising the government on the sale.

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