ACKNOWLEDGEMENT

All the praises and thanks for ALLAH almighty who is entire source of knowledge and

wisdom to mankind and whose uniqueness gave me enough courage, knowledge and

ability to accomplish this research report.

I am thankful to our prestigious institution QASMS and my honorable supervisor Ms.

Perkha Khan.

I am also thankful to Manager P&P OGTI, G.M Finance, the entire FOs, Senior

Administrators of Finance department and whole the staff of organization who gave me

their precious time and behaved me not as intern but as a colleague. I really acknowledge

all for great efforts, guidance, and supervision and their positive attitude and behavior

during whole period of my internship at OGDCL, Islamabad.

i
 EXECUTIVE SUMMARY

Actually I made untiring efforts for writing this internship report and in this report I have

reflected my insights, working experience and knowledge which I got working as

Finance Internee at OGDCL during six weeks internship program in the department of

Finance and Accounts. The objective of the internship program was to enhance

understanding of academic theoretical knowledge by application in the internship setting

and to apply academic knowledge in practical setting of the organization and to gain

practical exposure and experience related to area of interest. I have divided this report in

four Chapters. In the first chapter, I have described introduction, history/ background of

company, organizational structure and Departments e.g. how it was formed, its present

situation & future prospects of the company. In the second chapter, I have discussed

about personal Learning and Experience which I learned and observed during whole

period of internship. In chapter 3rd I have given SWOT Analysis of the Finance

department, what I gained the practical exposure and observed functional activities which

were being applied in OGDCL, therefore I could be able to produce the analysis of

strengths, weaknesses, opportunities and threats and all these factors have been discussed

and analyzed by me in this report. Finally in the chapter 4 th I have given the conclusion of

this report which gives brief ending overview of the organization. I have given the

recommendations and suggestions for the improvement of the demerits and drawbacks of

the company which I observed and learned during my internship period.

ii
 LIST OFABBREVIATIONS

Acronym Definition Acronym Definition

OGDCL Oil and Gas COO Chief Operating

Development officer
Company Limited
OGTI Oil and Gas PLC Private Limited
Training Institute Company
MD Managing Director CSR Corporate Social
responsibility
ED Executive Director SCM Supply Chain
Management
CFO Chief Financial JV Joint Venture
Officer
E&P Exploration and HRM Human Resource
Production Management
LC Letter of Credit LPO Local Purchase
Order

iii
 TABLE OF CONTENTS

Contents Page No
Acknowledgement……………………………………………………………….……i
Executive Summary……………………………………………………………….….ii
List of Abbreviations………………………………………………………………....iii
Table of contents………………………………………………………………….…..iv
Chapter 1
Introduction of the company………..……………………………………………………5
Company Background…………………………... .………………………………….. 5-6
Establishment of OGDC……………...………………………………………………..6
Conversion into PLC……….……………………………………….………………....6-7
Vision, Mission and Core Values….…………………………………………………..7-8
Company’s Goals………………………………………………………...…………....8-9
Departments……….………………………………………………………………..10-12
Structure of Finance Department………………………………………………………12
Products Offered………………………………………...……………...…………..12-14
Chapter 2
Learning and Experience…..……………………..…………………………………….15
Sections…………………………………………………………………………………16
Personal working and Learning Experience of 1st Week………………………...…16-17
Personal working and Learning Experience of 2nd week……………………...…...18-19
Personal working and Learning Experience of 3rd week……………………....…...19-20
Personal working and Learning Experience of 4th week……………………...…....20-21
Personal working and Learning Experience of 5th week……………………….......….21
Personal working and Learning Experience of 6th week……………………...….........22
Chapter 3
SWOT Analysis of the organization.………………….…………………...……….23-28
Chapter 4
Conclusion………………………………………………………………………..…….29
Recommendations……………………………………………………………….….30-31
References...……………………………………………………………………………32
Annexure……………………………………………………………………………33-36

iv
 CHAPTER : 1

INTRODUCTION

1. INTRODUCTION OF OGDCL:

OGDCL is the country’s leading E&P company. The company is the local market leader

in terms of its assets. Its production is broadcasted on the three stock exchanges in

Pakistan as well as on London stock exchange since 2006. OGDCL is ready to take on

the challenges of the E&P industry with its well equipped Vision and Mission, Business

and Strategic Plan, a debt-free balance sheet and strong cash reserves. [ CITATION OGD

\l 1033 ]

1.1.

COMPANY BACKGROUND :

Before OGDCL was formed, the exploration and production activities and the processes

in the country was carried out by Pakistan Petroleum Ltd. (PPL) and Pakistan Oil Fields

Ltd. (POL). PPL discovered a major gas field at Sui in Balochistan in the year 1952. This

discovery led to the entrance of five major foreign oil companies into concession

agreements with the Government. During the 1950s, these foreign companies carried out

various geological and geophysical surveys and drilled 47 exploratory wells which led to

v
the discovery of various small gas fields in the region all over Pakistan. Despite of these

discoveries, the oil exploration activities declined in the late 50s. It seemed as if the

objective of the private companies was not being met, since the demand for gas was non-

existent. With exploration activities at the lowest, many foreign companies terminated

their contracts in 1961. [ CITATION OGD \l 1033 ]

1.1.1.

ESTABILISHMENT OF OGDC :

To revive the exploration in the energy sector in Pakistan , the Government of Pakistan

signed a loan agreement with the USSR in 1961. This led Pakistan to receive 27 million

Rublesto finance equipment and services of Soviet experts for exploration. After this

agreement, the OGDC was created under an Ordinance dated 20th September, 1961. The

company was bestowed with the task to undertake a systematic exploratory program in

the country to promote Pakistan’s oil and gas prospects. The company followed the

Government’s instructions in matters of exploration and development. The company’s

management lied among the five member Board of Directors, that were selected by the

Government, During the early years, the company was financed by the GOP.

[ CITATION OGD \l 1033 ]

1.1.2.

vi
CONVERSION INTO PLC :

OGDCL had been a statutory corporation uptil 23rd October, 1997. It was known as

OGDC ( Oil and Gas Corporation ) at that time. It was after 23 rd October, 1997 that the

company had been upgraded as the Public Limited Company and became known as

OGDCL i.e. Oil and Gas Corporation Limited.[ CITATION OGD \l 1033 ]

1.2.

OBJECTIVES OF THE COMPANY:

1.2.1.

VISION :

“ To be a leading multinational Exploration and Production company.”

[ CITATION htt2 \l 1033 ]

1.2.2.

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.”

vii
[ CITATION htt2 \l 1033 ]

1.2.3.

CORE VALUES :

 Merits

 Teamwork

 Dedication

 Integrity

 Safety

 Innovative

[ CITATION htt2 \l 1033 ]

1.2.4.

COMPANY’S GOALS :

1) FINANCIAL GOALS:

 Develop strategies for future expansion of the financial reserves.

 Stakeholders should be satisfied by providing them with superior returns.

 The company should double its value proposition after every five years..

 Profits should be maximized by investing excess funds at profitable

ventures.

viii
  Cost should be reduced for efficient maintenance of performance results.

2. LEARNING AND GROWTH :

 Motivate the workforce through modern Human Resource practices to

better their technical and managerial skills.

 Acquire the state of art technology.

 Productive use of management styles to emphasize organizational

learning and research.

 Attract and retain best professionals to fill the competency gap.

 Attain and practice full independence for decision making matters..

3. CUSTOMER INSIGHT:

 Be a responsible corporation by practicing CSR.

 Satisfy the customers through improvements in the quality of the service.

4. INTERNAL PROCESSES:

 To manage and control internal processes.

 Periodic changing and upgradation of business processes.

 Promote effective business practices and team work.

ix
1.3.

DEPARTMENTS :

1.3.1.

E&P DEPARTMENTS :

 Exploration Prospect Generation

 Production

 Exploration Studies and Research

 Process Department

1.3.2.

CORPORATE DEPARTMENTS :

 Administration

 Medical

 Human Resource Department

 Corporate affairs

x
  Personal

 Aviation

 Security

 Finance and Accounts

 Legal

 OGTI

 Communication

 G&R Lab

 Supply Chain Management

 Secretariat

 Material Management

 Internal Audit

 System Support

1.3.3.

TECHNICAL SERVICES DEPARTMENT :

 Drilling

 Stimulation

 Engineering / Workshops

 Geological / Geophysics

xi
  Mud Engineering

 Seismic Data Processing

 Well Services Department

 Logistics

 Cementation

 Data Logging [ CITATION OGD \l 1033 ]

1.4.

STRUCTURE OF F&A DEPARTMENT :

OGDCL’s Finance and Accounts department plays the role of backbone for the company

who is dealing with all the finance and accounts related aspects. OGDCL has hired highly

qualified accountants in the finance and accounts department such as CA’s, CMA’s,

MBA’s and M.Com. This department is under the direct administrative control of the

Executive Director Finance. The ED Finance is assisted by the General Manager

(Finance), General Manager (Accounts) & General Manager (Treasury ) for the efficient

controlling of the financial activities of the Company. Then there are Chiefs, Deputy

Chiefs, Senior Accountants, Accountants, Assistant Accountants and the Staff.

1.5.

PRODUCTS OFFERED :

1.5.1.

xii
CRUDE OIL :

Crude oil is a raw oil that is a mixture of a number of elements such as Gas and

Petroleum Liquids that is extracted out of the grounds by oil wells.

Major production oilfields of the company are: Dhakni, Dhodak, Bobi, Tandoalam,

Chanda, Toot and Rajian.

1.5.2.

GAS :

The major gas fields of OGDCL are: Dhakni, Dhodak, Qadirpur, Nandpur, Panjpir,

Pirkoh and Uch.

1.5.3.

LIQUIFIED PETROLEUM GAS (LPG) :

The major LPG producing fields of the company are: Dhakni, Dhodak, Sadqal, Kunner

and Bobi.

1.5.4.

SULPHUR :

xiii
A yellow element from petroleum products that is used in the manufacture of fertilizers

and the pharmaceuticals.

The Sulphur is produced at the following oil fields: Dhakni near Attock.

xiv
 CHAPTER : 2

LEARNING & EXPERIENCE

I applied in OGDCL for my summer internship because it has always been my dream

to work in this organization. OGDCL is one of the leading oil and gas company of the

country with a wide and extensive system of Finance and Accounts Department. In

addition, the departments in OGDCL are further divided into sections that are

specifically concerned with their particular tasks and assignments.

This division makes it easy for the internee to understand the system properly in a

better way by having a close conscience of the ongoing activities of the company. I

was attached with six different sections of the F&A department during my internship

tenure.

Following are the main intentions of my internship in OGDCL :

 To fulfill the course requirement of my degree BSBA from QAU.

 To understand the organizational behavior and culture of the Company.

 For applying the theoretical concepts for practical purposes.

 To get the knowledge of accounting operations, projects and asset

maintenance.

xv
I started my internship at OGDCL, Head Office Islamabad on 27 th June, 2019. The period

of my internship was 6 weeks i.e. from 27th June till 9th August, 2019.

2.1.

SECTIONS :

I was attached with the following sections during my internship :

 Payable

 Tax

 Import

 Final Accounts

 JV Accounts

 Sales

2.1.1

WEEK 1

PAYABLE SECTION :

xvi
On the very 1st day of my internship, I was attached with Mr. Altaf Hussain of payable

section. He guided me that payable section is concerned with the payment of LPO and

IPO submitted by the Procurement Department to the different suppliers/contractors

when the payment receipts are confirmed or advance payment is to be made to the

suppliers or contractors against the delivery of the materials as per term and condition

already mentioned in the contracts. Penalty is charged in case of late receival of the order

as per delivery period. First of all, budget for the required items are confirmed from the

concerned department. All these transactions are then recorded in Oracle system. After

which vouchers are printed out of the oracle. After confirmation of the vouchers, these

are forwarded to the bank section for preparation of cheques. These cheques are then

forwarded to the concerned parties at their addresses mentioned on the contract.

2.1.1.2.

TASKS PERFORMED

 I’ve made payment vouchers after calculating the amount payable using the rates

already given.

 I was made to go through a case study to better understand the job and working

procedures of the Payable Section’s officers.

 I wrote a reply to an email to the supplier in order to remove a misunderstanding

that was caused due to a payment issue.

 I attached different files together.

xvii
2.1.2

WEEK 2

TAX SECTION :

I was attached with Mr. Arsalan Shaukat – Deputy Chief (Tax). Tax is basically a kind of

involuntary fee that is imposed by Governments on the individuals and corporations and

is considered a form of revenue for the Govt.. OGDCL is the country’s leading tax payer

organization. The job of tax department is actually the computation of corporate Tax in

accordance with the Income Tax ordinance 2001. The relevant tax entries in the record .

Provisions of information about taxation to tax Audits carried out by income tax

department.

2.1.2.1

TASKS PERFORMED:

 In Tax Section, I got to learn closely that what is tax and what is the purpose of

tax. The Supervisor, discussed FBR tax rate, and made us go through some tax

cases.

 OGDCL is basically using ORACLE software for tax calculations, they showed

how do that calculate tax.

xviii
  Entry of withholding tax statements with respect to salary withholding tax in

Oracle System.

 In Insurance section, the instructor made us go through different insurance cases

of the company. Deceased person cases.

2.1.3

WEEK 3

IMPORTS SECTION :

I was attached with Mr. Saeed Ahmad Qaiser - Senior accountant Import section. He told

me that Import Section deals with the payment of foreign trade against the letter of credit

(LC). It is this section that make letter of credit. They establish letter of credits against

local purchase order (LPO) as well for procurement of purchases internationally, as

requested by the Supply Chain Management (SCM) department.

2.1.3.1

TASKS PERFORMED

 I learnt the making of letter of credit (LC) , and went through already made LCs.

 I’ve made a record of existing LCs.

xix
  I was taught that how a file transfers from one department to another for

verification.

 I examined the LPO and FPO files, and then learnt how the payments are made in

these cases.

 I was instructed on how to reply audit queries regarding service invoices.

2.1.4

WEEK 4

FINAL ACCOUNTS SECTION :

I was attached with Mr. Nasir Nawaz of Final Accounts. This section is concerned with the

preparation of financial reports of the company. This section also provides required financial

information to other departments. They also prepare variance analysis of the records.

2.1.4.1.

TASKS PERFORMED :

 In depth examination of the Financial Report 2017-18.

 Then I was briefed about the main software Oracle upon which all the working of

the company is being done.

 I was made to understand what is variance analysis. i.e. the difference between the

current financial values and the past years’ values.

xx
  He further made me to do accounting entries.

2.1.5

WEEK 5

JV ACCOUNTS SECTION :

I was attached with Mr. M. Nawaz Khan – Chief Accountant (JV).

Joint Venture is basically the partnership between two or more parties. OGDCL runs its

operations either as company owned or as joint venture (JV).

The JV Accounts deal with the accounting of those oil fields that are operated as Joint Ventures.

2.1.5.1.

TASKS PERFORMED:

 The instructor further explained that Joint Ventures are of two types:

1.       JV in which the company is the operator.

2.       The one in which the company OGDCL is non-operator.

 The instructor then explained the procedure of how JV's operates and how the budget is

approved.

 I was made to go through different Joint Venture contracts to understand how does it all

work.

xxi
2.1.6

WEEK 6

SALES SECTION :

In the Sales Section, I was attached with Mr. Nayyer Ali Zaidi – Deputy Chief Accountant Sales

section.

Sales Section is responsible to record sales revenue of the company. Sales revenue is generated

from the sales of products, such as: Natural Gas, Crude Oil, LPG and Sulphur. All sales of

OGDCL are on credit bases and the period of the contract varies for different segments.

2.1.6.1.

TASKS PERFORMED:

 He firstly explain the procedure of sales of natural gas and its billing and invoices

preparation methods of different OGDCL Oil Fields.

 I was instructed on how to use ORACLE for the preparation of billing receipts and

invoices.

 The instructor made me go through some basic terms that were used in the contracts and

assignments of Sales Section.

 I have calculated the GST (General Sales Tax) and WHT (With holding tax).

 I have prepared the billing receipts of Gas for different consumers.

xxii
 CHAPTER : 3

SWOT ANALYSIS

Now I’ve done a complete SWOT Analysis of the company OGDCL to get an insight and

an unbiased image of its key strengths and weaknesses and the potential opportunities in

the E&P sector and the threats it has from the competitors.

3.3.1.

STRENGTHS :

I. Top priority of the Government:

Government of Pakistan owns 74% shares of the company – therefore OGDCL

enjoys the status of the top priority of the government whenever a new license of

the exploration is issued.

xxiii
 II. A Highly self-sufficient company:

Now OGDCL is a self sufficient company, so it possesses highly cutting-edge and

up-to-date machinery and tools.

III. OGTI:

OGDCL has a separate well enough training institute to train its employees up to

the required mark in the form of OGTI.

IV. Merit Based Hiring :

The hiring of employees is truly based on the merit system, so only highly

competitive candidates can qualify for the organization.

V. One of the best Pay Packages :

Their pay packages are one of the top in the country and annual bonuses are

announced periodically to motivate the employees.

VI. Latest Professional Approach:

In the recent years, the company has adopted the latest professional approach by

using the up-to-date management information system that ensure online flow of

work.

VII. Corporate Social Responsibility:

xxiv
 OGDCL as the leading Exploration and Production Company of the country

totally understands its position and contributes towards the social causes. it has

opened various schools at the far flung areas and occasionally it set up various

free medical camps to ensure the health of the lower working class of the society.

VIII. Highly Profitable Entity:

OGDCL enjoys a status of a profitable corporation since its birth.

IX. Huge Financial Reserves:

It has huge financial reserves available.

3.3.2.

WEAKNESS OF THE ORGANIZATION:

I. Poor inventory management:

Poor inventory management system undermines OGDCL’s performance.

II. Lack of implementation:

Lack of implementation of rules and regulation.

III. Hierarchical Formalities:

xxv
 Too many hierarchical formalities and spaces in chain of command.

IV. Rigid Processes:

The processes are often too rigid which results in late decisions.

V. Political Influences:

Politics plays its role sometimes and these political influences sometimes halt the

decisions that might be beneficial for the company.

VI. Less practical Approach:

The workers do not adopt a practical approach to work sometimes as of security

element, because they know that no one can sack them from the organization.

VII. Free Rider Problem:

Annual bonuses are declared for the entire organization irrespective of their work

quality, which leads to a free rider problem.

3.3.3.

OPPORTUNITIES :

I. New Discoveries:

xxvi
 There are many oil and gas reserves that are yet to be discovered in Pakistan.

II. Inflation causes increase in Oil prices:

Inflation and increase in oil prices internationally has been noticed in recent years.

III. Increase in Demand:

Gas demand is highly increasing due to changing attitude of the people.

IV. Incentives by the Govt.:

Government is promoting the energy sector by giving incentives for doing better

projects.

V. No Competitors:

No tough competition faced by OGDCL in this sector, so exploration contracts

are most likely to be given to the OGDCL for the future mega projects.

3.3.4.

THREATS :

xxvii
 I. Government Decisions:

Being a Govt. owned organization, the Govt. has a lot of say in deciding its

investment decisions.

II. Changing Global Trends:

The changing global trends may change its performance.

III. Decrease in Oil Prices:

Decrease in oil prices would be threatening for OGDCL.

IV. Threat of Unproductive Oil Fields:

Threat of unproductive oil well is a great a big loss for the company.

xxviii
 CHAPTER : 4

4.1

CONCLUSION :

OGDCL has time and again improved its position as a public sector oil and gas company

to the country’s leading E&P corporation with its presence in all the provinces of the

Pakistan. Its shares are now listed on Islamabad, Lahore and Karachi stock exchanges of

Pakistan as well as on London Stock exchange. The analysis of the company’s financial

statements shows that it is highly self sufficient and that it has high tendency to pay its

debts. The sales of the company are enormous which leads to attain its objective of

generating enormous profits in the long run. Solvency ratios of the company clearly

reflects company’s ability to survive over a prolong period. These financial results have

been possible due to consistent hard work and dedications of all the employees under the

xxix
guidance of the Management. Keeping in view the achievements made by the company

during all these years together with favorable outcome and profit generation. It can be

predicted that the company is yet to undergo many more instances of success.

4.2.

RECOMMENDATIONS :

During my stay in OGDCL, I had a close insight of the company’s system. I had

observed various flaws and setbacks face by the company that I have discussed in the

SWOT analysis portion. To eliminate these weaknesses, I want to recommend some

practical steps that might be helpful to increase the efficiency of the company.

 OGDCL has adopted the latest technology to make its work done more efficiently

but there are certain early staff members who do not know how to efficiently put

this latest technology into work. They are just ruining the available resources. So

OGDCL must take necessary action to educate such people on how to use the

available facility and in this way they can be more effective for organizational

success.

 Bonuses must be awarded on the basis of performances of the employees.

xxx
 The job description must be clearly mentioned and foretold to the employees, and

a proper check should be maintained by the higher management to ensure honesty

and fairness.

 Training should be provided to technical staff according to their job requirements.

 Hierarchy level should be minimized to improve upward and downward

communication.

 Production cost should be reduced by introducing new technology and by hiring

skillful human resource.

 Political interferences should be eliminated to ensure a smooth system.

 Management should maintain physical records of the inventory to avoid any mis

handling or missing cases.

 Comparisons of actual versus budgeted expenditures should be done to discover

cost over-runs.

xxxi
References

https://ogdcl.com/vision-mission. (n.d.).

OGDCL. (n.d.).

xxxii
 ANNEXURE

ANNEXURE 1

ORGANIZATIONAL CHART

Board of Directors

Company
Company
Secretary
Secretary // General
General Audit
Audit Committee
Committee of
of
Manager
Manager Legal
Legal the
the Board
Board
Services
Services

General
General Manager
Manager //
Chief
Chief internal
internal
Auditor
Auditor

Managing Director / Chief

Executive
Executive Officer
Officer

Chief Operating
Chief Operating Chief
Chief Financial
Financial GM
GM (Corporate
(Corporate
ED (HR // Admin)
ED (HR Admin)
Officer
Officer Officer
Officer Affairs)
Affairs)

ED
ED (Production)
(Production) ED
ED (Exploration)
(Exploration) ED
ED (Petroserv)
(Petroserv) ED (BD/JV)
ED (BD/JV) ED
ED (Finance)
(Finance) ED
ED (Services)
(Services) GM
GM (HR)
(HR) GM (CSR)
GM (CSR)

GM
GM (( Prospect
Prospect GM (Information
GM (Information
GM
GM (P&P)
(P&P) GM (DO)
GM (DO) GM
GM (JV)
(JV) GM (Finance)
GM (Finance) GM (HSEQ)
GM (HSEQ) GM (Admin)
GM (Admin)
Generation)
Generation) System)
System)

GM
GM (( Geophysical
Geophysical GM (Health
GM (Health
GM
GM (PE & FD)
(PE & FD) GM
GM (DS)
(DS) GM
GM (BD)
(BD) GM
GM (Accounts)
(Accounts) GM (Security)
GM (Security)
Services)
Services) Services)
Services)

GM (Geological
GM (Geological
GM (Projects)
GM (Projects) GM
GM (C&ESS)
(C&ESS) GM (Treasury)
GM (Treasury) GM
GM (( SCM)
SCM) GM
GM (OGTI)
(OGTI)
Services)
Services)

GM (Commercial)
GM (Commercial) GM (Material)
GM (Material)

GM
GM (Production)
(Production) GM
GM (( RM)
RM)

xxxiii
ANNEXURE 2

STRUCTURE OF FINANCE AND ACCOUNTS DEPARTMENT:

ED (Finance & Accounts)

GM (Finance
& Accounts)

Chief
Accountant

Deputy Chief Accountant

Senior
Accountant

Assistant
Accountant

Junior Accountant

xxxiv
TABLE SHOWING THE TOTAL NO. OF EMPLOYEES IN OGDCL

Officers (Regular) 1,591

Staff (Regular) 8,208
Total Regular 9,799
Officer (Contractuals) 279
Staff (Contractuals) 85
Total Contractuals 364
Trainee (Officer) 247
Trainee (Staff) 9
Total Trainee 260
Total Staff in OGDCL 10,423

SCHEDULE OF EMAILS

Emails Date/Time Yes No

rd
1st 3 July, 23:32 
2nd 15th July, 14:01 
3rd 27th July, 16:19 
4th 19th August, 18:01 

xxxv
SCREENSHOTS

xxxvi
xxxvii
xxxviii