Contents

Contents..................................................................................................................... 1
.................................................................................................................................. 3
Industry Overview.....................................................................................................4
Company Overview.................................................................................................4
Establishment of OGDC...........................................................................................4
Transition to a self financing entity.........................................................................5
Conversion into Public Limited Company................................................................5
OGDCL Vision..........................................................................................................5
OGDCL Mission .......................................................................................................6
............................................................................................................................... 6
Products of OGDCL..................................................................................................6
Quality........................................................................................................................ 7
SQC-PRO..................................................................................................................7
How it works............................................................................................................7
On Line Quality Control System for Vibrators..........................................................8
Quality Labs.............................................................................................................8
Leadership Team........................................................................................................ 9
Management and Communication...........................................................................9
Customers of OGDCL:.................................................................................................9
External Customers of OGDCL ............................................................................9
Employee Motivation................................................................................................10
CRITERIA FOR PAYMENT OF BONUS TO THE OFFICERS:.........................................10
Compensation System: ...........................................................................................11
In order to motivate employees OGDCL has designed an attractive compensation
system . OGDCL believes that attractive compensation package leads to
productivity and efficiency of organization...............................................................11
Medical Facility......................................................................................................11
Life Insurance Policy..............................................................................................11
Cost of Living.........................................................................................................12

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 Transportation Facility...........................................................................................12
Allowances............................................................................................................12
Training....................................................................................................................12
Business Ethics......................................................................................................... 14
Health, Safety, Environment and Quality Statement ............................................14
Corporate Social Responsibility (CSR) ..................................................................14
APPENDIX................................................................................................................. 16

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 Industry Overview
Oil has been produced in what is now the republic of Pakistan from the early 1920's. According
to Oil and Gas Journal (OGJ), Pakistan had proven oil reserves of 300 million barrels in January
2006. A number of fields were discovered in the upper Indus basin in the 1930's and 1940's.
Since around 1980 a large number of hydrocarbon discoveries have been made in the central and
southern parts of the country. In 1999 there were at least 70 oil and condensate fields in
production, although none of them was of any great size. Total output has fluctuated within a
range of about 55 000-65 000 b/d since 1989. In 2006, Pakistan produced an average of 58,000
bbl/d of crude oil.

Company Overview

OGDCL is the national oil & gas company of Pakistan and the flagship of the country’s E&P
sector. The Company is the local market leader in terms of reserves, production and acreage, and
is listed 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.

Establishment of OGDC

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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charged with responsibility to undertake a well thought out and systematic exploratory
programme and to plan and promote Pakistan's oil and gas prospects.

Transition to a self financing entity

Due to major oil and gas discoveries in the eighties, the Government in July 1989, off-loaded the
Company from the Federal Budget and allowed to manage activities with self generated funds.

The financial year 1989-90, was OGDC's first year of self-financing. 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 23rd
October 1997 and is now known as OGDCL (Oil & Gas Development Company Ltd.).

OGDCL Vision
To be a leading multinational Exploration and Production Company.

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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. (www.ogdcl.com)

Products of OGDCL

• Crude Oil

• Gas

• Liquefied petroleum gas ( LPG)

• Naphtha

• Solvent oil

• Kerosene oil

• High speed diesel oil

• Sulphur

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Quality
In OGDCL, quality is defined as “meeting the customer specifications”. Since OGDCL is
involved in the extraction of oil and gas,( which have varying components,) they define quality
as selling that product (oil, gas etc) whose level of specifications exactly match the specifications
given by the customer. Quality is maintained at all levels of the organization but the greatest
level of quality checks are at the exploration stage. In this stage, new areas are being explored for
the possibility of having oil or gas. In exploration, OGDCL ensures quality by using “Quality-
Control System SQC-PRO”.

SQC-PRO

SQC-PRO is a hardware and software package that can be implemented on-line with the
standard data acquisition systems to offer a powerful tool for real-time Quality Control of
seismic data, without the need for any tape manipulation.

The main benefit of SQC-PRO is that all QC functions are performed in parallel with the seismic
data acquisition without slowing down 2-D or 3-D programs.

How it works

All the seismic data is simultaneously sent to the recording drive and to SQCPRO workstation
for shot display, automatic generation of trace attributes, and trace header analysis. The operator
defines the list of attributes to be displayed in real time for every shot record.

Using bargraphs, SQC-Pro displays a summary of some important computed values, shot after
shot :

1. number of faulty traces with details of the

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 problems

2. average level of ambient noise

On Line Quality Control System for Vibrators

The second quality control system that is used is called on-line quality control system for
vibrators. On line quality control is used for accurately controlling each process itself in order to
optimize it and to make the equipment self-running.

Quality Labs

The third method of ensuring quality at OGDCL is through the use of quality labs. A number of
labs researching quality have been established at all major plants.

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Leadership Team
The leadership style at OGDCL is semi-centralized. Delegation does exist but all major decisions
are taken by the head quarters. The top most quality of a good leader, as said by the plant
manager of OGDCL Dhakini, is impartiality. This is closely followed by a high degree of
tolerance and anger management.

Management and Communication

In OGDCL, employees don’t have so much freedom to talk to their supervisors because they
have to go through different procedure or we can say regulations. They have an open door
communication system but are used in rare cases. Mostly the communication with supervisors is
formal and takes place through E-mails or fax systems.

In the meetings with CEO or chairman, video conferencing is used depending on the situation.
Power point and Multimedia presentations are also used in such high level meetings.

Customers of OGDCL:
Since OGDCL is involved in Oil and Gas extraction, and as it carries out the extraction itself, it
does not have any suppliers. OGDCL does have a number of external customers. OGDCL’s
customers are not individuals but they are companies that OGDCL’s sells gas to or undertakes
any other activity for:

External Customers of OGDCL

1. Gulf Oil

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 2. Occidental Oil Company

3. Petro Canada

4. Albion Pakistan Inc.

5. OMV Pakistan

6. Hycarbex

7. Orient Petroleum Inc.

8. Pakistan Petroleum Limited

9. Mari Gas Company Limited

10. Pakistan Oil Fields Ltd

Employee Motivation
OGDCL treats all its employees as a valuable asset and in order to reward and motivate their
successes, they have implemented performance appraisal systems. These are conducted annually
at OGDCL by the means of a report called the annual confidential report (ACR). All the
employees of OGDCL are appraised with no exceptions. Furthurmore, to motivate empoyees
certain bonuses have been linked with the performance appraisal ratings.

CRITERIA FOR PAYMENT OF BONUS TO THE OFFICERS:

OGDCL gives bonuses to all its officers and executives (regular,contract, deputations etc) who
have completed one year of services with the company. They are paid bonuses on the following
basis:

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ACR RATING FOR THE YEAR BONUS EQUIVALENT TO

Very Good 3.75 times of monthly Basic pay

Good 2.25 times of monthly Basic Pay

Average 1.25 times of monthly Basic Pay

Below Average Nil

Compensation System:

In order to motivate employees OGDCL has

designed an attractive compensation
system . OGDCL believes that attractive
compensation package leads to
productivity and efficiency of organization.

Medical Facility

All the regular employees and their families are entitled to medical facilities. These Include free
of charge medical attendance and treatment, accommodation in approved hospitals,·
reimbursement of medical expenses in emergency cases, annual medical checkup of officers and
also medical facilities are available after retirement.

Life Insurance Policy

Employees are a valuable asset for OGDCL. This is assured by providing them with life
insurance policy to its high level management officers. The present life insurance system given
by OGDCL to its officers are 48 basic salaries with a minimum sum assured of Rs. 0.50 million
and a maximum of Rs. 1.5 million.

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Cost of Living

House rent is also given to employees, and is allotted to them in their salary. It varies according
to the designation of employee.

Transportation Facility

The advance for purchase of the following conveyance may be sanctioned by the company to its
regular employees, subject to certain conditions.

OGDCL provides car policy to its entitled officers. This policy also differs depending on the
status of the officers. The HR department also allows its officers the choice of car and models
available in the market. However the officer can request the car of choice within his entitlement
only.

Allowances

OGDCL gives plenty of allowances to its officers as they believe that inorder to increase
performance they need to satisfy officer needs first.

Some of those allowances include the messing allowance ( Rs.225/- per day), utility allowance
(at flat rate of 15% of basic pay) and special allowance which includes servant allowance, driver
allowance, office entertainment, newspaper and periodicals, petrol, PhD Allowance, residential
allowance etc.

Training
In order to improve the skills of the employees and to empower them, OGDCL operates their
own training and research institute, the PetroResearch and Training Institute, which offers six-
month on-the-job training programs designed for graduate engineers with the background and
skills to become a successful and integral part of their team. In addition to training provided to
graduate students, the institute also provides refresher courses for existing staff in the areas of
exploration, drilling, well services, gas processing, production and computing, among others.

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Training takes place in a class environment or through drilling simulators, electrical and
mechanical workshops and laboratories in order to best assist the students in obtaining the
practical skills necessary to excel in the workplace.

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Business Ethics
OGDCL runs its operations activities while complying with the maximum concern regarding
business ethics and accommodating all the regulations while maintaining the accepted standards
of being a good corporate business. OGDCL has issued a business ethics statement (attached in
the annexure) and the main objective of the statement is to minimize all forms of corruption in
both direct and in-direct business activities and to respects the rights and interests of share
holders.

Health, Safety, Environment and Quality Statement

Being the giant of a company that OGDCL is, it ensures that all health, safety and environmental
concerns are met in the best possible manner. It is believed that HSE issues can not be delegated
and it is treated as a shared responsibility across the company as it contributes to the sound
success of the company.

There are a number of initiatives which are taken by the company to ensure the welfare of the
communities it operates in, protecting the eco system and safety of its employees. It does so not
only by promoting the HSE concept as they call it but also train their employees regularly in the
aspect. They also hire only those contractors which share HSE standards OGDCL seeks to
follow. OGDCL also complies with all the HSE regulations imposed by the government by
maintaining internationally certified HSE management systems. To sum up, OGDCL
incorporates its HSE practices in every part of the organization and also makes public the HSE
targets set and met on an annual basis. (The official statement is attached in the annexure)

Corporate Social Responsibility (CSR)

The company endeavors to be a responsible corporate citizen of the E&P community. OGDCL
is providing free health care facilities including services of Doctors, Dispensaries and
Ambulances to the inhabitants living in and around OGDCL fields. The Company has
constructed a Trauma Center at District Ghotki Sindh. It is a unique facility and one of its kind in

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the whole District. The Company has also provided Rs. 500 million for earthquake relief out of
which Rs. 300 million were provided to the President’s relief fund

Recently, OGDCL has taken the lead to establish two Technical Training Schools in Quetta,
Balochistan and Karak, NWFP. 100 students each are selected annually from Balochistan and
N.W.F.P. for training in these schools. OGDCL provides financial assistance for the schools by
meeting all expenditures. The students are also paid a stipend of Rupees two thousand per
month. After successful completion of their training, certificates are awarded to them by
OGDCL’s Petroleum Research Training Institute.

As a gesture towards empowerment of women, OGDCL has also established a Vocational

Training School for girls at Tando Muree, District Hyderabad, Sindh, to provide livelihood
opportunities to the female youth of the area.

OGDCL has also completed the Shakardarra Upliftment Scheme. This included construction of a
new block for High School located at Union Council 1, Nandraki, Shakardarra, the Shakardarra
bypass road, gateway to Shakardarra, construction of an 8 kilometer road and a 1.1 kilometer
Farm-to-Market road.

OGDCL joined hands with the World Bank for the “Pakistan Development Market Place 2006
(PDM-2006)” initiatives. The “Mazoori Majboori Nahi” programme supports creative and
innovative initiatives to improve the lives of people with disabilities. OGDCL has donated US $
10,000/- for the purpose.

So, it can be clearly seen, that OGDCL has taken steps to ensure that it benefits the society.

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APPENDIX

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