OGDCL: Technology, Innovation and Sustainability Under One Roof

Oil and gas both are indeed the engines of the world economy. The pre-eminence of oil has run in parallel with the enormous economic advances made in the 20th century. This is still on in the 21st century. According to a few pieces of research it is estimated that industrial production grew by around 50 times during the last century and that four-fifths of this development happened in the second half of the century. This happened during the reconstruction period after the Second World War. Oil is indeed a dominating factor around the globe. The exploration of oil and gas is an imperative factor as well. While realizing this need Oil & Gas Development Company Limited (OGDCL) was established which is now the largest Exploration & Production (E&P) Company in Pakistan. Previously before the emergence of OGDCL, exploration activities in the country were carried out by Pakistan Petroleum Ltd.

(PPL) and Pakistan Oilfields Ltd. (POL). With the discovery of a huge gas field at Sui in Balochistan back in 1952 PPL, the interest in such exploration expanded. Fortunately, five major foreign oil companies signed agreements with the Government in this regard. These foreign companies started their work in Pakistan and further carried out wide-ranging geological and geophysical surveys. They drilled 47 exploratory wells. As a result, a few small gas fields were discovered. Unfortunately, even after these explorations, activities regarding further exploration met a decline.

The Private sector Companies were not interested in developing the gas discoveries in a situation when infrastructure and demand for gas were non-existent. They were merely working for their profit and interests. Seeing this attitude and lack of interest several foreign exploration contracting companies concluded their operation or either reduced or relinquished land holdings in 1961. OGDCL was created under an Ordinance in 1961, as a Public Sector Corporation and was converted from a statutory Corporation into a Public Limited Company on 23rd October 1997.

Currently, the Government of Pakistan is holding 74.97% of the total equity in the Company. OGDCL is listed on all three stock Exchanges of Pakistan as well as on the London Stock Exchange. This organization has a history full of success stories. Being an instrument to devise policy in the oil and gas sector, OGDCL emulated the given instructions in all exploration and development related activities. The organization was comprised of a five-member Board of Directors. In the beginning Government of Pakistan was responsible to arrange finances for the organization. One can easily access that the first decade after the emergence of OGDCL was fully devoted to the growth of manpower and construction of infrastructure so to undertake all the exploration related activities. It wasn’t an easy task. The principal aim of the organization is to enlarge and accelerate onshore exploration and development activities. While having a look of the initial successful initiatives by OGDCL, one can see that how the international donor agencies such as the World Bank, Canadian International Development Agency (CIDA) and the Asian Development Bank assisted in form of grants and loans for key development projects.

A number of oil and gas discoveries were also taken place between 1968 and 1982. The toot oil field was discovered in 1968 which cemented the way for additional exploratory work. OGDCL transformed its strategy and started updating it’s during the period of 1970-75. They further initiated the programs with regards to training and development. Enhancement of skills was always high on the agenda. All these development started showing positive results in the 1980’s with the discovery of various oil and gas fields. These include the Thora, Sono, Lashari, Bobi, Tando Alam & Dhodak oil/condensate fields and Pirkoh, Uch, Loti, Nandpur and Panjpir gas fields. The organization also achieved financial independence during this period. The professional commitments and capabilities also emerged as few of the success factors during this era. Due to which in July 1989 the Government relieved of the Company from the Federal Budget and permitted it to administer its activities with self-generated funds. It was the biggest achievement for the organization and its employees as well as for the country. During the initial stage of financial independence, the challenge was to create sufficient capital as well as to maintain a momentum compatible with the Public Sector Development Programme (PSDP). Therefore, the organization not only produced sufficient internal funds to meet its debt compulsions but further invested in exploration and development to augment the country’s reserves and production. Once it became a public limited company, in 2003 Government of Pakistan disinvested part of its shareholding in the Company.

Initially, 2.5% of the equity with an additional green-shoe option up to 2.5% of equity was offered to the general public. This offer received an overwhelming response from the general public. This was also a milestone deal in the history of Pakistan’s capital markets. OGDCL is also privileged to be the top corporate tax-paying entity of 2018. While mentioning the operational highlights of the company, it is pertinent to mention that in 2019, the company discovered Chanda-1, Mela-5 & Mangrio-1. The Average Net Crude Oil Production remained 40,810 Barrels per day; Average Net Saleable Gas Production was 1,014 MMcf per day, Average Net LPG Production was 802 Tons per day and 2D Seismic Survey was 1,324 Line km. Total 16 Wells were Spud whereas 13 was injected. In 2019, the financial status of the company remained stable. Total Assets of the company remained 766.6 billion and Sales Revenue were 261.5 billion. Total Profit for the Year 2019 was 118.4 billion whereas the Earnings per Share remained 27.53 Rupee. The contribution by the company to National Exchequer was 159.9 billion. As of 30 June 2019, OGDCL’s exploration acreage stood at 77,543 sq. km, which shows it the largest exploration company in Pakistan. Exploration portfolio of the company expands across all four provinces of Pakistan. OGDCL currently owned forty-three JV exploration licenses. Moreover, the Company possesses a working interest in six blocks controlled by other E&P companies. Cooperation and engagement is another important activity to enhance the development of the sector. OGDCL fully understands this importance.

The purpose of OGDCL’s stakeholder engagement is to ensure productivity and professionalism. This attitude and engagement further pave the way to build effective relations with all stakeholders that include Ministries, Divisions and Directorates of Federal and Provincial Governments, JV partners, customers, suppliers, employees as well as local communities. While emulating a pragmatic approach the Company strives to offer an appropriate response to stakeholders regarding their concerns on vital issues. Corporate relations are of great importance once you are communicating for such engagement and corporate communication is the key to build such terms with the stakeholders. OGDCL not only protect its business image but also come up as a socially responsible corporate organization.

E&P sector in Pakistan is regulated by the Ministry of Energy, whereby OGDCL fully follows its commands relating to gas pricing, crude oil and gas allotment to refineries and gas distribution companies, dispensation management, etc. OGDCL being the market leader in this particular sector of Pakistan is putting all efforts to enlarge oil and gas production. The company is devoted to keeping a pace for exploration of new oil and gas fields, fast-track expansion of revealed fields and execution of enhanced engineering design and reproduction capabilities to enhance the energy supply needs of the country. There is also an utter purpose to exploit more economically sustainable growth opportunities. Such opportunities can be really beneficial for the development of local resources as well as in developing an environment to uphold and augment oil and gas output in the coming years.

While having a look at the future perspectives of the organization one can clearly see that with such an ambitious approach OGDCL is committed to bridging the gap of energy demand and supply in Pakistan. The company is prepared to expand its exploration, growth and production operations to further carry out upstream augmentation as well as to develop profit margins in the future. OGDCL is also looking forward to preserving and reinforce its competitive position. All this is possible by managing operational costs, preserving capital elasticity and exercising watchfulness on operational and capital expenditures.

In quest of its strategic objectives, the focus is on exploration which is an essence of E&P operations. The company is also committed to investing in seismic data acquisition, processing/re-processing of seismic data and drilling operations to boost oil and gas assets and increase production. With regards to production activities, OGDCL is utilizing modern technology and newest reservoir management practices. Besides this, the company is more focused on the delivery of ongoing development projects. This is the only way through which production can further grow and consequently strong cash flows in the future can be generated. There is another aspect of corporate social responsibility which is pertinent to enhance a connection with the communities. The company is engaged in activities altering the lives of communities especially in the operational areas of the OGDCL. The main focus of the company is not only on the interventions in these areas, but also to bring smiles on the faces of the people of these areas so they can live a better life. This is an evident example of CSR focused approach in the Country. In 2018, under the umbrella of OGDCL National Talent Hunt Program, an amount of Rs 114.896 million has been approved by the board. Under these scholarships 300 students from Gilgit Baltistan, KPK, Punjab, Baluchistan and Sindh were accommodated. Hopefully, by following the previous approach and with the indulgence of new commitments, OGDCL will continue to change and expand the Exploration & Production sector in the country.



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About Saima Zaman 40 Articles
Writer is the Assistant Editor ‘Mélange int’l Magazine’, ‘The Asian Telegraph’ & Project Coordinator (COPAIR); a degree holder in communication & media sciences.