oil and gas development company

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Strategic Plan Of OGDCL

Oil and Gas development Company

Company History

Establishment of OGDC

To revive exploration in the energy sector the Government of Pakistan signed a long-term loanAgreement 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 Governmentinstructions 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 andmeans 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.

Initial Successes

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 formajor 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 & Dhodakoil/condensate fields and Pirkoh, Uch, Loti, Nandpur and Panjpir gas fields which are

commercial discoveries that testify to the professional capabilities of the Corporation.

Transition to a self financing entity

Noting the Company's success, due to major oil and gas discoveries in the eighties, the

Government in July 1989, off-loaded the Company from the Federal .The financial year 1989-90,was OGDC's first year of self-financing. It was a great challenge for OGDC. The obvious initial

target during the first year of self-financing was to generate sufficient resources to maintain the

momentum of exploration and development at a pace envisaged in the Public SectorDevelopment Programme (PSDP) as well as to meet its debt servicing obligations. OGDC not



only generated enough internal funds to meet its debt obligations but also invested enough

resources in exploration and development to increase the country's reserves and production.

Conversion into Public Limited Company

Prior to 23 October 1997, OGDCL was a statutory Corporation, and was known as OGDC (Oil& Gas Development Corporation). It has been incorporated as a Public Limited Company w.e.f.23 October 1997 and is now known as OGDCL (Oil & Gas Development Company Ltd.).

Initial Public Offering

Government of Pakistan disinvested part of its shareholding in the company in 2003. Initially

2.5% of the equity with an additional green-shoe option upto 2.5% of equity was offered to the

general public. The said Offer received an overwhelming response from the general public and

was recorded as a landmark transaction in the history of Pakistan’s capital markets.

GDR

In December 2006, the Government of Pakistan divested a further 10% of its holding in the

company. The Company is now listed on the London Stock Exchange since on December 06,

2006.

OGDCL Vision

To be a leading multinational Exploration and Production Company.

OGDCL Mission

To become the leading provider of oil and gas to the country by increasing exploration and

production both domestically and internationally, utilizing all options including strategic

alliances.

To continuously realign ourselves to meet the expectations of our stakeholders through best

management practices, the use of latest technology, and innovation for sustainable growth, while being socially responsible.

Business strategyAs the leading exploration and production company in Pakistan, OGDCL’s primary objective is

to enhance its reserves and production profile and ultimately maximize value for shareholders.In order to achieve this goal, the Company seeks to execute the following strategies:

Accelerate Production Growth: by continuing to accelerate production growth through



utilizing cutting edge technologies, allowing the Company to utilize its significant reserves base and capitalize on the strong economic growth and accelerating energy demand inPakistan.

Exploit Exploration Opportunities: by building the Company’s future reserves portfoliothrough its large onshore exploration acreage. During the fiscal year 2008-09 target of

drilling is 52 wells.

Maintain Low Cost Operations: OGDCL’s operating environment, namely the

geographic concentration of its reserves base within Pakistan, will be a major factor in

allowing it to control its low cost structure. Within Pakistan, the Company’s leading

position also enables it to access economies of scale across its significant reserves base andoperations.

Pursue Selective International Expansion: while domestic expansion remains OGDCL’score focus, the Company intends to grow and diversify its portfolio through selectiveinternational expansion in the medium to long-term.

Implementing International Best Practice: by ensuring an efficient organizational

structure and business processes that are focused on core production. As part of our

restructuring plan, OGDCL has established an in-house technical services division, thePetroserv Directorate, which separates technical support services from core E&P activities.

OGDCL Goals & Core Values

Core Values

Merit

Integrity

Team Work

Safety

Dedication

Innovation

Goals

Financial



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Build strategic reserves for future growth/expansion

Growth and superior returns to all stakeholders

Double the value of the company in the next five years.

Make investment decisions by ranking projects on the basis of best economic indicators

Maximize profits by investing surplus funds in profitable avenues

Reduce cost and time overruns to improve performance results.

Customers

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Continuously improve quality of service and responsiveness to maintain a satisfied

customer base.

Improve reliability and efficiency of supply to the customer

Be a responsible corporate citizen

Learning & growth

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Motivate our work force, and enhance their technical, managerial and business skills

through modern HR practices.

Acquire, learn and apply state-of-the-art technology.

Emphasize organizational learning and research through effective use of knowledge

management systems.

Fill the competency gap within the organization by attracting and retaining best

professionals.Attain full autonomy in financial and decision making matters.

Internal Processing Goals

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Evolve consensus through consultative process inter-linking activities of all departments

Excel in exploration, development and commercialization

Be transparent in all business transactions

Synergize through effective business practices and teamwork

Have well-defined SOP’s with specific ownerships and accountabilities Improve internal business decision making and strategic planning through state-of-the-art

MIS

Improve internal controls

Periodic business process reengineering.

oil and gas development company

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