Professional Documents
Culture Documents
1.1. Company Background
1.1. Company Background
TABLE OF CONTENTS
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Oil & Gas Development Company Ltd.
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Oil & Gas Development Company Ltd.
INTERNSHIP LETTER
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Oil & Gas Development Company Ltd.
EXECUTIVE SUMMARY
My internship report is based on the practical application of my knowledge that I have gained in
my course of BBA. For the completion of my BBA program it is required to attend an internship
training program in a reputed organization for a period of eight weeks, after studying a lot about
the companies‟ practices and working of different organizational structure and setup, it was a
time to look out for practical realities. So, I selected OGDCL for my internship. I have
completed an internship of Eight weeks in OGDCL, not only to meet the degree requirements but
also to gain a professional awareness of the knowledge.
I was able to acquire a handful of knowledge about procedures, processes and basic functions of
the particular departments during the eight-weeks of my internship program, which may appear
to be fruitful for me in my future career.
This report is a brief of what i have learned at OGDCL as a student internee for 8 week period
for my internship project. First of all, i have explored the company background, its present
situation & future prospects. The objective of the report was to learn about the functions of the
various sections of the finance and account department i was rotated to. I have attempted to
highlight the major functions of in my report. A brief account of the company‟s products is also
included in the report.
I have listed the tasks which I have performed in eight sections of Finance and Accounts
Department. On the basis of these tasks performed, I have done an in depth SWOT analysis of
the organizations. At the end I put forward some recommendations on some issues which I have
discovered through SWOT analysis.
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Oil & Gas Development Company Ltd.
1. INTRODUCTION
OGDCL is the national oil & gas corporation of Pakistan and the star of the country‟s E&P
segment. The Company is the local market spearhead in terms of assets, production and acreage,
and is registered on all three stock exchanges in Pakistan and also on the London Stock
Exchange since December 2006. The Company is all set to ride the wave of E&P activity,
equipped with its Vision & Mission, Business and Strategic Plan, a debt-free and robust balance
sheet and healthy cash reserves. The Company is ready to take on the challenges of a volatile
E&P industry.
Prior to OGDCL's emergence, exploration activities in the country were carried out by
Pakistan Petroleum Ltd. (PPL) and Pakistan Oilfields Ltd. (POL). In 1952, PPL discovered a
giant gas field at Sui in Baluchistan. This discovery generated immense interest in exploration
and five major foreign oil companies entered into concession agreements with the Government.
During the 1950s, these companies carried out extensive geological and geophysical surveys and
drilled 47 exploratory wells. As a result, a few small gas fields were discovered. Despite these
gas discoveries, exploration activity after having reached its peak in mid-1950s, declined in the
late fifties. Private Companies whose main objective was to earn profit were not interested in
developing the gas discoveries especially when infrastructure and demand for gas was non-
existent. With exploration activity at its lowest ebb several foreign exploration contracting
companies terminated their operation and either reduced or relinquished land holdings in 1961.
To revive exploration in the energy sector the Government of Pakistan signed a long-term
loan Agreement 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
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Oil & Gas Development Company Ltd.
charged with responsibility to undertake a well thought out and systematic exploratory program
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 Government
instructions 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 and
means 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 programs.
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.)
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 up to 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.
1.2. OBJECTIVES
1.2.1. Vision
1.2.2. Mission
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1.2.3. Values
• Merit • Safety
• Integrity • Dedication
• Team Work • Innovation
1.2.4. Objectives
1.2.4.1. Financial
• Build strategic reserves for future growth/expansion
• Double the value of the Company in the next five years
• Reduce cost and time overruns to improve performance results
1.2.4.2. Customer
• Constantly increase quality of service and responsiveness to keep a satisfied
customer base
• Improve reliability and efficiency of supply to the customer
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1.3. DEPARTMENTS
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Finance & Accounts Department has been playing marvelous role in the development of the
OGDCL. OGDCL has acquired the services of highly qualified professionals like CAs, CMAs,
MBAs and M.com for its Finance and Accounts Department. Finance & Accounts Department
is directly under the administrative control of Executive Director Finance. The Executive
Director (Finance) heads the Finance & Accounts Department. General Manager (Finance),
General Manager (Accounts) & General Manager (Treasury) assist the Executive Director
(Finance) for effective and efficient controlling of OGDCL financial activities. Then there are
Managers and below Managers there is a chain of Chief, Deputy Chief, Senior Accountant,
Accountant, Assistant Accountant and then staff members.
Executive Director
Finance
General Manager
Manager
Chief Accountant
Dy Chief Accountant
Sr. Accountant
Accountant
Assistant Accountant
Accounts Assistant
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Oil & Gas Development Company Ltd.
The business volume and the sales revenues are the reflection of an operator‟s management
decisions, execution and skills. OGDCL„s financial performance has been consistently
improving since becoming a self-financing entity. The main product lines of the company are as
follows:
Crude oil is the mixture of petroleum liquids and gases (including impurities such as
Sulphur) that is pumped out of the ground by oil wells. Main production Oilfields of the
company are Dakhni, Dhodak, Bobi, Tandoalam, Chanda, Toot & Rajian.
1.5.2. GAS
A mixture of hydrocarbons found in natural gas and produced from crude oil, used
principally as a feedstock for the chemical industry, home heating fuel, and motor vehicle fuel.
The major fields of the company having LPG production facilities are Dakhni, Dhodak, Sadkal,
Kunner and Bobi.
1.5.4. Sulphur
A yellow mineral extracted from petroleum for making fertilizers, pharmaceuticals and
other products. The Sulphur is produced at the Dakhni oil & Gas field near Jand, Attock.
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Oil & Gas Development Company Ltd.
Doing Internship at OGDCL was unique and interesting in the sense that OGDCL is one of
the biggest corporate setup in Pakistan. Usually in the mid size organization, plenty of work is
being performed by few individuals, so due to that work load, it is nearly impossible for them to
facilitate an internee in a deep and appropriate manner. This makes difficult for me to choose the
organization where I can learn some practical knowledge in a true sense.
As OGDCL is a gigantic corporation in terms of its size and operations, due to which its Finance
Department has to perform plenty of work. In addition, Finance & Accounts section is further
divided into number of sections and in each section there are hundreds of officials who are
performing different tasks. This attribute of OGDCL motivates me to select the organization.
The size of the department is so big that during my 8-week internship I was hardly able to cover
8 sections of Finance and Accounts Department.
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Oil & Gas Development Company Ltd.
I started my internship at OGDCL, Head Office Islamabad on 6th July 2012. They attached me
with different sections of Finance & Accounts Department. The duration of my Internship was 8-
weeks from 6th July 2012 to 30th August 2012.
In each section, I was briefed about the working of that department. Mainly I was made to
understand the working of the section by going through the different files related to the
functioning of the department. Moreover I also did some practical work and also get a chance to
work on Oracle in few sections.
During my internship, I observed working of different sections; the detail is given below;
On the very first day, I was attached to Mr Kamal Khan (Deputy Chief). In this section,
periodical/annual financial statement is prepared. This section is also responsible for providing
desired information to requested sections. Furthermore Final accounts section also prepares
variance analysis of the record.
I have to stay till five days in this particular section so he made the schedule accordingly.
First of all, I was given the task to thoroughly read the annual report of OGDCL for the year of
2011 and underline the major heads of the accounts. I did the same, as this was necessary to get
familiar with the working of F&A section. Then I was briefed by his subordinate about the
central information system (ORACLE Applications 11i), the whole department is integrated
centrally through an information system, every other section of Finance and Accounts
department forward its transaction to the Final Account section so it can made quarterly or yearly
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Oil & Gas Development Company Ltd.
financial statements. The third and last briefing was about variance analysis. A variance analysis
is carried out by comparing the current values with the past year‟s values and then analyzes the
cause of the difference.
It pays the Local purchase and foreign purchase orders submitted by the Procurement
(SCM) department to different parties/suppliers/contractors when material receipt is confirm or
advance payment against delivery to suppliers as per term & condition of the local or foreign
purchase order issued and request for payment by SCM department is made.
Submitted invoices are paid by comparing of delivery chalan with purchase order and
confirmation of receipt at delivery locations and with local receipt statement prepared by store
section and inspection made and material accepted by technical committee. Penalty is charged in
case material late receipts as per delivery period. Budget is confirmed for the items required by
the concerned department, and authorization of payment is also confirmed accordingly.
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Oil & Gas Development Company Ltd.
Accounts Payable
Invoices from Employees House BANK
Rent Advance & third parties SECTION
House Hiring FOR
CHEQUES
All payments against Local or Foreign purchase order are entered in Oracle System and vouchers
are made by applying matching receipt of each order of different suppliers in Oracle System and
if, matching is in line then voucher oracle generated is printed out. Voucher is then sent to other
person for checking. When checking is complete then it is validated by concerned officer who
has authority in Oracle System. After authorization the voucher is then sent to Bank Section for
preparation of cheques. Cheques are then sent to the parties at the address as per given in
purchase order issued by SCM Department.
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Oil & Gas Development Company Ltd.
Bank Section performs the issuance of cheques for all kinds of payments to employees,
contractors, suppliers, and etc. It also Deposits the cheques received from employees for
settlement of their matters. Cheques are also received from various parties against sale of crude
oil, gas, LPG, white petroleum products, services, and various miscellaneous incomes. Bank
section is responsible for the transfer of funds to all regional offices, and different field locations
according to their authorized imprest or as per their demand. Reconciliation of all bank accounts
is also being done in this section.
Departments
Reconciliation
Payments Relating To
Imprest
Different Departments
Payments Relating To
Suppliers
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Oil & Gas Development Company Ltd.
Cash Section deals with petty payments at Head Office Islamabad only to the
employees. Any payment less than Rs. 5,000 are dealt by Cash Section. Cash payments
include salaries, wages, and advances to employees against TA/DA, newspapers expense,
medical expense, petrol expenses, and miscellaneous payments up to that limit. These
payments are made against vouchers received from Payroll Section and Payable Section.
Cash Section is allowed to keep Rs. 1.5 million in its safe at H.O, as all this money is
insured. The payments are also entered in the Online ORACLE System.
Payroll Section
CASH HBL
SECTION
Payable Section
Petty Payments
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Sales Section pays Government levies. It also executes agreements, when Production
Department ends. Sales section also has the authority to decide all terms of payments. It also
collects payments from the customers and in the case of late payments, interest and
surcharge sort of payments are also received by sale section. Sales section determines the
price of its products according to the Government and International rules and regulati ons.
Invoices are dispatched to buyers (customers). Remittances are received from its customers,
which is then properly accounted for, and then handed over to Bank Section for proceed
realization.
Customers
SLAES
Bank Section
SECTION
Marketing
Department
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Oil & Gas Development Company Ltd.
Imprest section is playing a vital role in the finance & accounts department of OGDCL to
control, manage and transfer of funds to fields/locations, and the replenishment of head office
imprests, and the payment of land compensation to all fields/land owners. Imprest section is
involved in processing of field remittances, preparation of bank payment vouchers for
transferring fund, maintaining the field remittances register and in preparation of variance
analysis report.
IMPREST
Fields/
Locations SECTION
NBP Bank
Section
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Oil & Gas Development Company Ltd.
Import Section deals the payment which pertains to foreign and is against letter of credit.
The Import section is responsible for the establishment of Letter of Credit (LC). The import
section also Establish the letters of credit for import of goods and payments against these
letters of credit. Establishment of letters of credit for hiring services and payments of these
services against Letters of Credit is also performed in this section. Inland letters of credit
are also established for procurement of material locally against Local Purchase Order (LPO)
Stores
Department Seller
(Third Party)
Supply Chain
IMPORT
Department
SECTION
Commercial
Budget Bank
Section
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Oil & Gas Development Company Ltd.
Insurance Section takes care of insurance of employee under the Group Life
Insurance Policy. It also arranges insurance covers for house building loaners under the
House Building Loan Insurance Policy. Insurance matters related to Company‟s assets are
also handled in this section. It takes care of the Rig Insurance Fund, Vehicle Insurance, and
Workmen‟s Compensation Fund, Plant insurance Fund, Pipelines Insurance Fund, wells
Insurance Fund, which were created to address insurance needs in-house for specific assets.
Insurance section of OGDCL coordinates with EFU, Metropolitan and National Insurance
Corporation for procurement of the desired insurance covers. It also gets settlement of
insurance claims, pays claims to employees/ legal heirs, pays premium to insurers and
responds requirements/ queries of internal, external, government, and other auditors.
Insurance Section also performs closing and reconciliation of account relating to the section.
It prepares schedules/ statements about section work in routine and on demand.
Insurance
Companies
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Oil & Gas Development Company Ltd.
I have done a widespread SWOT analysis of Oil & Gas Development Company Limited
which will provides me an in-depth picture of the company's businesses and operations. The
analysis has been compiled to have a clear and an unbiased view of the company's key strengths
and weaknesses and the potential opportunities and threats.
2.3.1. Strengths
• As OGDCL is a government owned organization and 74% share are held by Govt.
of Pakistan, so it is given preference whenever a new license of exploration is
issued
• Highly cutting-edge and up-to-date machinery and tools are controlled by
OGDCL.
• OGDCL has a well enough training facility structure in the form of OGTI.
• Annual bonuses are announced to motivate employees.
• OGDCL believes in merit driven hiring process
• In the recent years, OGDCL has introduced a very professional and up to date
management information system which allow inline and computerized flow of
work
• OGDCL believes and already is socially responsible; the organization has
established a vocational training school in Tando Alam Sindh.
• OGDCL has established its own gas transmission and distribution network.
• OGDCL has huge financial reserves available.
• OGDCL has been a highly profitable entity since its creation.
• Specialization is achieved through selecting the personnel on the basis on
technical expertise.
• By giving attractive salaries packages, OGDCL is capable to retain its loyal and
highly professional man power.
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Oil & Gas Development Company Ltd.
2.3.2. Weaknesses
• Outdated procurement procedures and stores inventory management system of
OGDCL undermines OGDCL„s performance.
• It is noticed that there is the lack of implementation of rules and regulations
• There are too much hierarchical formalities and greater spaces in chain of
command so a plenty of time is wasted for the circulation of files for the
verification purposes
• Sometimes decisions are late due to rigid processes
• Job descriptions are not properly defined to the staff and division of work is done
in an inefficient manner
• Political influences some times halts major decision which might be beneficial for
the organization
• Approach of the workers to work is not practical as of job security element. They
have fair idea that no one can sack them from this organization.
• Annual bonuses are declared for whole organization irrespective of their
individual performance, which leads to a free rider problem.
2.3.3. Opportunities
• There are Substantial unexplored gases and oil reserves exist in Pakistan.
• Inflationary trend in the prices of oil in the international markets is noticed in this
current era.
• Massive consumer market can be targeted for the products offered.
• There is an ever rising demand of gas due to changing attitude of people.
• Government is giving incentives to Energy Sector for doing better projects.
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• There is no tough competition faced by OGDCL from any company having the
same large setup with such huge finances.
• Minimum price allowed by the Government at different location is a great support
for those fields where price after discount is less than official price.
• Economies of scale can be achieved by the right sizing of employees.
2.3.4. Threats
Being a Government owned organization; Government has maximum interference
while deciding its investment policies.
Global trends are rapidly changing which might affect its performance.
Any decrease in future oil prices may prove to be a great threat for OGDCL.
Fear of unproductive well is a source of threat for OGDCL.
2.4. RECOMMENDATIONS
During my stay in OGDCL, I carefully observed the major flaws and setbacks face by the
company which are also mentioned in the SWOT analysis. For the hopeful results and to
overcome these weaknesses and drawbacks, I want to suggest some practical steps which I think
might be helpful to improve the existing practices.
With the passage of time many modern technological changes take place in
OGDCL, online system is introduced but many early workers are not familiar that
how to use this facility. OGDCL must take necessary action to educate modern
technologies to those workers so that they can work in an efficient manner and in
this way they can play more effective role in organizational success.
The management should pay full attention to the intensive professional training of
staff in related fields. The department concerned can organize professional
training at OGTI and latest literature newspapers and magazines etc. of
professional interest should be provided at sites free of cost.
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CONCLUSION
The Company has come a long way from its beginning as a public sector corporation to a leading
exploration and production company with its presence
in all the provinces of the Country. OGDCL is now Company’s sales revenue and
profit after taxation increased by
listed on all the three stock exchanges of Pakistan as
9.2% and 7.4% to Rs 155.6 billion
well as on the London Stock Exchange. The analysis and Rs 63.5 billion respectively,
of OGDCL‟s financial statement shows that it has a resulting in Earnings per Share
high tendency to pay its debts and to convert assets (EPS) of Rs 14.77 compared to Rs
13.76 during the preceding year.
into liquid form within short intervals of time. The
sales of the company are on a very large scale and
also give rise to the company opportunity to generate huge profits in the long run. Its
Profitability ratios clearly reflect its great ability to generate huge profits and of generating
dividends for its shareholders. Solvency ratios of OGDCL clearly reflect the ability of company
to survive over a long period of time and also provide a measurement of how likely the company
will be to continue meeting its debt obligations. These financial results have been possible
largely due to the dedicated efforts of the Company‟s employees under the able guidance of the
Management, Board of Directors and support of Ministry of Petroleum & Natural Resources.
Considering the achievements made by the Company during these years together with favorable
price environment, speedy development of recently discovered fields and aggressive exploration
& development program, Company‟s growth and success in the years ahead can be predicted.
“Struggle is the key to success. The results are the discretion of Allah. Hence hard
working and devoted workforce is the most precious asset for an organization, same
is the case with OGDCL”.
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REFERENCES
http://www.ogdcl.com/
http://www.ogdcl.com/UploadFolder/financial/OGDCl_Complete_Ann2011.pdf
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APPENDIX
Employee Card
Sales Invoice of gas sold
Calculation of Oil Prices
Bank reconciliation Statement
Payment Voucher of NLC for transportation charges
NOTE The above mentioned documents are attached on the following page.
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Oil & Gas Development Company Ltd.
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Oil & Gas Development Company Ltd.
ACKNOWLEDGEMENTS
I am grateful to the entire management of OGDCL, Section heads of the Finance & Accounts
Department, and specially the Staff for their encouraging behavior and continuous support
towards the progress of my internship.
I am also thankful to all the Faculty of Management Sciences CIIT for their commitment and
Guidance and appreciate their contribution towards the knowledge which they have provided to
me during the period of last four years.
I would also like to thank the Mrs. Sarwat Kazmi for their untiring efforts in directing the
Students and helping me in one way or the other in the due course of completing this task.
Faisal Mehboob
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Oil & Gas Development Company Ltd.
FAISAL MEHBOOB
H. No. 138-A, Street No. 20, Gulzar-e-Quaid, Rawalpindi
Phone: 0344-5499760
E-mail: faisal.raja@hotmal.com
OBJECTIVES
A career with a progressive organization that will use my education, skills and abilities, where I can
effectively contribute to operations in any capacity that best matches my skills and experience.
EDUCATION
Make a project on ratio analysis of the past five year for OGDCL
Did a project on Risk & Return for Fauji Cement
Done a project on “Investment and Portfolio Analysis” of five companies.
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MARKETING SKILL
Achieved sales of handicrafts amounting to 120% of forecast in cultural week at Comsats Islamabad
campus
Personally generated over Rs. 13000 through a kites stall on “Spring Festival 2011” organized by
CIIT
COMMUNICATION SKILLS
Helped organize, conduct a highly successful campaign to gather donations for flood victims last year
Appointed as class representative in the second and third semester
Held responsible to manage the Cricket Competition last year
COMPUTER SKILLS
Playing Cricket
Travelling
Book reading
REFERENCES
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