OIL & GAS DEVELOPMENT COMPANY LIMITED TI.

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Head Office, Islamabad
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No. AAO102-16 (MMD)/7-32 20 May 2024

Subject: DISPOSAL OF MAIN EQUIPMENT AND RELEVANT SPARES-THEREOF

(MATERIALS MANAGEMENT MANUAL)

This is in continuation of our letters of even number dateo 03rd August 2022
and 04 April 2024. A variety of machinery & equipment supports different
departments across various locations. To ensure optimal functionality, these
departments maintain a sufficient inventory of spare parts and tools,
minimizing the risk of breakdowns and disruptions.

02. Upon reaching the end of their useful lift,. machinery & equipment are
subject to a condemnation process as outlined in the Materials Management
Manual, paving the way for their subsequent auction. However, a concern has
been identified regarding the stockpiling of spare parts for condemned
equipment, even when no similar equipment remains in use by the
departments. This results in excess inventory and unnecessary carrying costs.

03. Board of Directors also highlighted expediting the write-off of spare parts
when the corresponding main equipment is no longer in operation at OGDCL.

04. In order to streamline this process, following guidelines are circulated for
strict compliance:

i) User department . while processing the case for condemnation of

machinery & equipment will identify the relevant spares of the same at
different locations;

ii) The department will finalize list of spares which cannot be further utilized
at any OGDCL location (after confirmation from other departments about
any possible utilization of these spares) as the main equipment becomes
unserviceable/obsolete and this equipment will not be utilized/purchased
by OGDCL in future being obsolete.

iii) In case of any requirement by other departments from these spares

under write-off, the same will be shifted to desired location on proper
Store Documents. /
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iv) In case of availability of relevant spares in stock and the department has
retained the same for future use, HOD of the user department will
confirm in condemnation case that the spares are available but have
been retained as similar machinery/equipment is still in use.

v) If spares of any machinery/equipment under condemnation are not

available in stock, then HOD of user department will confirm in
condemnation case that no relevant spares of this unserviceable
equipment are available in stock.

vi) The department will initiate separate write-off case of not required
spares as per write-off procedure in Materials Management Manual in
parallel to condemnation case of main equipment.

vii) After approval of MD/CEO for auction of inventory under write-off (as per
Materials Management Manual), the department will forward the cases
of condemnation of main equipment and relevant Not Required spares
inventory to Materials Management Department (MMD).

viii) MMD will arrange auction of the main equipment and relevant Not
required spares as per procedure in vogue.

05. This issues with the approval of MD/CEO and forwarded for compliance by
all concerned. · ~ --•

c#.»
Manager (Rectt./Policy)
Ext. 3544

Distribution:

01. CSO to MD/CEO

02. ED (HR/Admin)/(Services)
03. GM (Materials)
04. All Heads of Departments
05. All Location Incharges

No. AAO102-16 (MMD)/7-32 dated 20 May 2024 Page 02 of 02