OGDCL - An Overview

Oil & Gas Development Company Limited was originally established as a statutory corporation in pursuance of an agreement with the USSR in 1961 to undertake a planned and systematic exploratory programme and to promote Pakistan's oil and gas prospects.
The first 10 to 15 years were devoted to development of manpower and building of infrastructure to undertake much larger exploration programmes. A number of donor agencies provided the impetus through assistance in the form of loans and grants. OGDC's efforts led to some major oil and gas discoveries between 1968 and 1982.
Toot oil field was discovered in 1968. In 1975, the Company undertook an aggressive programme, resulting in discovery of a number of oil and gas fields in the eighties. These include the Thora Sono, Lashari, Bobi, Tando Alam & Dhodhak oil/condensate fields and Pirkoh, Uch, Loti, Nandpur and Panjpir gas fields.
A wholly owned subsidiary, the Pirkoh Gas Company (Pvt) Limited (OGDCL) was established in 1982 to undertake development of Pirkoh gas field in Dera Bugti Agency, Balochistan with the assistance of Asian Development Bank.
Keeping in view the growing needs of Pakistan's petroleum industry, OGDC established its own Oil & Gas Training Institute (OGTI), offering training programmes and courses in the fields of Exploration, Drilling Well Services, Gas Processing, Production and Computing etc. Recently the function of research has also been included in the domain of Institute and name has been changed to Petro Research and Training Institute (PRTI).
During the last 47 years the Company has grown into a technically feasible and commercially viable organisation. As on March 2008 OGDCL manpower strength totalled about 11392 strong. OGDCL has also developed a sound equipment and operational base which includes 7 drilling rigs, 1 Work-over rig, a Geological Field Party, 5 Seismic Parties, 4 Engineering field parties, a Gas Gathering and Pipeline Construction Party. Seismic Data Processing Centre, Geological Analysis Laboratory, Wire line Logging Unit, Cementing Units and Data Logging Unit.
The Government in July 1989 off-loaded the Company from the Federal Budget and allowed it to manage its activities with self-generated funds. The financial year 1989-1990 was hence OGDC's first year of self-financing.
PHYSICAL AND OPERATIONAL PERFORMANCE:
OGDCL has also acquired modern seismic technology and the company is presently capable of carrying out survey and drilling activities in varius areas of the county. As of March 2008, OGDCL has drilled 260 exploratory wells and 271 development wells. Presently OGDCL is producing approximately 45,221 barrels of oil per day, 1171 MMcfd of gas, 324 M. Tones per day of LPG and 78 M.
Tons per day of Sulphur, (this includes OGDCL's production share from non-operated joint ventures). OGDCL's updated estimates for remaining recoverable oil and gas reserves as on 1st June, 2008 stood at 10,696.625 billion standard cubic feet (BSCF) of gas and 154.69 standard million barrels of oil (MMSTB).
OGDCL's financial performance has been consistently improving since it became a self financing entity. The net sales of OGDCL have increased to Rs 100.261 billion in 2006-2007 from Rs 96.755 billion in 2005-2006, while its profit after tax has increased to Rs 45.630 billions in 2006-2007 from Rs 45.962 billion in 2005-2006.
OGDCL has also implemented a number of major development projects. The Dhodak Condensate field development project located in district D.G. Khan, Punjab and Qadirpur gas field located in District Sukkur, Sindh.
The Pirkoh Compression Project in Dera Bugti Agency Balochistan, the Nandpur and Panjpir Development Project in Punjab, and the Uch gas field Project at Dera Bugti Agency. Balochistan, have also been implemented for supply of low BTU gas for power generation OGDCL also participated in development of the Kandanwari gas field under a joint venture with M/s Lasmo (Now M/s Eni Pakistan), and that of Miano gas field under a joint venture with M/s OMV of Austria.
Presently OGDCL is 10% owner in 29 concessions. In addition OGDCL is operator as well as working interest owner is 15 concessions and partner in another 06 conscessions operated by other oil companies.
TOWARDS PRIVATIZATION:
In April/May 1999, Privatisation Board of Pakistan approved privatisation of OGDCL. In November 2006, Government of Pakistan decided to disinvest part of its shareholding in the company. Initially 2.5% of the equity with an additional green-shoe option up to 2.5% of the equity was offered to the general public. The company is now listed on all the three Stock Exchanges in Pakistan with highest market capitalisation and it has around 14% weight-age on Karachi Stock Exchange 100-index.
GDR:
The Government of Pakistan has further disinvested 10% of its shares in OGDCL in the form of Global Depository Shares (GDS) on the London Stock Exchange (LSE). Unconditional trading of the GDS's started on the LSE on December 6, 2006. The GDS transaction was handled by a consortium of companies, as Underwriters/Joint Managers, which included M/s Golman Sachs, M/s Citi Group and M/s BMA Capital.
The offer was priced at Rs 115 per ordinary share and $18.90 per GDS, with each GDS representing 10 ordinary shares of OGDCL. The total number of OGDCL shares sold by Privatisation Commission was 376,799,000 excluding the over allotment option of 53,294,000 shares granted to the underwriters.
At the offering size the transaction was approximately two-times oversubscribed. The demand was generated from a broad range of institutional investors from the United States, United Kingdom, Asia and the Middle East, as well as the domestic Pakistan institutional market. Approximately 95% of the institutional offer was allocated to international institution investors.
Mr Arshad Naser-Chairman/CEO of OGDCL--said "The level of demand from investors for OGDCL shares shows a strong appreciation of our business and prospects. This is a great endorsement of the work of our employees, who continue to work tirelessly to sustain OGDCL's position as Pakistan's leading E & P company to benefit all our share-holders".