Oil & Gas Development Company Ltd.1 TABLE OF CONTENTS INTERNSHIP LETTER ............................................................................................................................... 3 EXECUTIVE SUMMARY .......................................................................................................................... 4 1. INTRODUCTION ............................................................................................................................... 5 1.1. COMPANY BACKGROUND ................................................................................................... 5 1.1.1. Establishment Of OGDC ...................................................................................................... 5 1.1.2. Conversion I nto PLC ........................................................................................................... 6 1.2. OBJECTIVES ............................................................................................................................. 6 1.2.1. Vision .................................................................................................................................... 6 1.2.2. Mission ..................................................................................................................................... 6 1.2.3. Values ................................................................................................................................... 7 1.2.4. Objectives.............................................................................................................................. 7 1.3. DEPARTMENTS ........................................................................................................................ 8 1.3.1. E&P Department .................................................................................................................. 8 1.3.2. Corporate Department ......................................................................................................... 8 1.3.3. Technical Services Department ........................................................................................... 8 1.4. STRUCTURE OF FINANCE & ACCOUNTS SECTION ...................................................... 9 1.5. PRODUCTS OFFERED........................................................................................................... 10 1.5.1. Crude Oil ............................................................................................................................ 10 1.5.2. GAS ..................................................................................................................................... 10 1.5.3. Liquefied Petroleum Gas (LPG) ........................................................................................ 10 1.5.4. Sulphur ............................................................................................................................... 10 2. LEARNING & EXPERIENCE........................................................................................................ 11 2.1. DURATION & RATIONALE FOR SELECTION ................................................................ 11 2.2. DETAIL OF TRAINING & TASKS PERFORMED ............................................................ 12 2.2.1. Final Accounts................................................................................................................... 12 2.2.2. Payable Section .................................................................................................................. 13 Oil & Gas Development Company Ltd. 2 2.2.3. Bank Section ...................................................................................................................... 15 2.2.4. Cash Section ...................................................................................................................... 16 2.2.5. Sales Section...................................................................................................................... 17 2.2.6. Imprest Section ................................................................................................................... 18 2.2.7. Import Section .................................................................................................................... 19 2.2.8. I nsurance Section............................................................................................................... 20 2.3. SWOT ANALYSIS OF OGDCL ............................................................................................. 21 2.3.1. Strengths............................................................................................................................. 21 2.3.2. Weaknesses......................................................................................................................... 22 2.3.3. Opportunities ...................................................................................................................... 22 2.3.4. Threats................................................................................................................................ 23 2.4. RECOMMENDATIONS .......................................................................................................... 23 CONCLUSION ........................................................................................................................................... 25 REFERENCES ........................................................................................................................................... 26 APPENDIX ................................................................................................................................................. 28 ACKNOWLEDGEMENTS ........................................................................................................................ 30 Oil & Gas Development Company Ltd. 3 INTERNSHIP LETTER Oil & Gas Development Company Ltd. 4 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. Oil & Gas Development Company Ltd. 5 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. 1.1. COMPANY BACKGROUND 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. 1.1.1. 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 Oil & Gas Development Company Ltd. 6 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. 1.1.2. Conversion I nto PLC 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 To be a leading multinational Exploration and Production Company 1.2.2. Mission 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. Oil & Gas Development Company Ltd. 7 1.2.3. Values • Merit • Integrity • Team Work • Safety • Dedication • 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 1.2.4.3. Learning & Growth • Motivate our workforce, and enhance their technical, managerial and business skills through modern HR practices • Acquire, learn and apply state of- the-art technology • Fill the competency gap within the organization by attracting and retaining best professionals 1.2.4.4. Internal Process • Synergize through effective business practices and teamwork • Improve internal business decision making and strategic planning through state- of-the art MIS Oil & Gas Development Company Ltd. 8 1.3. DEPARTMENTS 1.3.1. E&P Department Exploration Prospect Generation Production Exploration Studies & Research Process Process Department 1.3.2. Corporate Department • Administration • Medical • Human Resource Department • Corporate Affairs • Personnel • Aviation • Security • Finance & 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 / Geophysical • Mud Engineering • Seismic Data Processing • Well Services Department • Logistic • Cementation • Data Logging Oil & Gas Development Company Ltd. 9 1.4. STRUCTURE OF FINANCE & ACCOUNTS SECTION 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. Jr. Accounts Assistant Accounts Assistant Assistant Accountant Accountant Sr. Accountant Dy Chief Accountant Chief Accountant Manager General Manager Executive Director Finance Oil & Gas Development Company Ltd. 10 1.5. PRODUCTS OFFERED 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: 1.5.1. Crude Oil 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 Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, with other hydrocarbons, carbon dioxide, nitrogen and hydrogen sulfide. Natural gas is an important energy source to provide heating and electricity. It is also used as fuel for vehicles and as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals. The major gas fields of the company are Dakhni, Dhodak, Qadirpur, Nandpur, Panjpir, Pirkoh and Uch. 1.5.3. Liquefied Petroleum Gas (LPG) 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. Oil & Gas Development Company Ltd. 11 2. LEARNING & EXPERIENCE 2.1. DURATION & RATIONALE FOR SELECTION 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. Following are the main intentions of studying the organization: • To fulfill the requirement of obtaining BBA degree from CIIT • For applying the theoretical concepts with practical applications. • To know, how the accounting operations are performed, projects are implemented and assets are maintained etc. • To know the procedures for collection of funds, transfer of funds, import of plant & equipment etc. • Analyzing the overall strength, weaknesses and opportunities available to that organization. • The procedure of execution of various agreements / contracts relating to supply of materials and acquiring services for implementation of various Projects. • I completed all the activities in a very well manner & learn so much, so i can say that practical experiences are of so much importance along with the theoretical knowledge. Oil & Gas Development Company Ltd. 12 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 J uly 2012 to 30th August 2012. 2.2. DETAIL OF TRAINING & TASKS PERFORMED During my 8-week Internship I was attached with the following sections; • Final Accounts • Payable Section • Bank Section • Cash Section • Sales Section • Imprest Section • Import Section • Insurance Section 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; 2.2.1. Final Accounts 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 Oil & Gas Development Company Ltd. 13 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. 2.2.1.1. Tasks Performed • It was my first task to have an In depth examination of Annual Report • I have Reviewed the financial statements of the company for the year 2010 and 2011 (as the annual report of 2012 was not published at the time of my internship • I have reviewed the file records of data from different oil and gas fields as well as different join ventures • I have done variance analysis of increase in the market price of the stocks of the company and submitted a rough draft to the section head along with the reasons of the increase • Discuss the International Accounting Standards related to the Decommissioning cost with a member of internal audit dept. and clear my concepts regarding this issue 2.2.2. Payable Section 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. Oil & Gas Development Company Ltd. 14 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. 2.2.2.1. Tasks Performed • The products of the company are transported by NLC, so after calculating the payable amount with the help of rate given, I have made payment vouchers of transportation charges for NLC. (sample attached in the appendix) • After checking the attendance register, made vouchers for salary payments for the third party workers of OGDCL • Handover the vouchers which are made in the payable section to the bank section Invoices from Employees House Rent Advance & third parties House Hiring Invoices from Medical stores, Dr. & Hospital bills Invoices from suppliers, contractors & consultants. Employees Invoices for refund & Telephone charges. A c c o u n t s P a y a b l e BANK SECTION FOR CHEQUES CHEQUES TO THE SUPPLIER Oil & Gas Development Company Ltd. 15 2.2.3. Bank Section 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. 2.2.3.1. Tasks Performed • I have Studied the files regarding the previous records of bank accounts, bank reconciliation statements, dividend payments and other transfer of funds • It was one of my task to Counter check the amount of the dividend payable and the name of the owner • Record keeping of the invoices number which are presented by suppliers and contractors on the registers • With the help of an assistant accountant of the bank section, I have prepared a bank reconciliation statement in the ORACLE (Document Attached) Receipts Relating To Different Departments Payments Relating To Different Departments Receipts from Suppliers Payments Relating To Suppliers B a n k S e c t i o n Reconciliation Management Imprest Oil & Gas Development Company Ltd. 16 2.2.4. Cash Section 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. 2.2.4.1. Tasks Performed Record keeping I have assist a worker at the payment window of the cash section at the head office in calculation and collection of the cash Payroll Section Payable Section CASH SECTION HBL Petty Payments Oil & Gas Development Company Ltd. 17 2.2.5. Sales Section Sales Section is the most important section of OGDCL. It is responsible to record sales revenue, and controls accounts receivable. Sales revenues are generated from the sale of products such as; Crude Oil, Gas, LPG and Sulphur. All sales of OGDCL are on credit, and credit period varies depending upon the status of its customers. For example the period is 15 days for private sector, 30 days for the public sector, and 45-60 days for joint ventures. 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. 2.2.5.1. Tasks Performed First of all, I have studied and examine past records of data of sales and taxes I have calculate the GST and WHT according to the rates given by the instructor as an exercise I have made the sales invoices of gas and crude oil for different Consumers. (Sample Attached in Appendix) Customers Marketing Department Bank Section SLAES SECTION Oil & Gas Development Company Ltd. 18 2.2.6. Imprest Section 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. 2.2.6.1. Tasks Performed • My first duty was to study the past records of imprest allocation to different fields • I have also made bank payment vouchers for transfer of funds. These vouchers are very much similar to those which I have made in the payable section as the format and the procedure of making the vouchers is almost the same. • I also spent a day on the record keeping of remittances register Fields/ Locations IMPREST SECTION Bank Section NBP Oil & Gas Development Company Ltd. 19 2.2.7. Import Section 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) 2.2.7.1. Tasks Performed • I have also Study the previous letter of credits and the process involved in the establishment of letter of credit • I have maintained source wise record of Letter of Credit • Sequence of verification really matters in the process of LOC, so I have gained some knowledge that how the file is transferred from one department to the other for the purpose of authentication and verification • I have carefully examined the files relating the local purchase order and foreign purchase order, and then learn how the payment is made for the LPO‟s and FPO‟s Supply Chain Department IMPORT SECTION Stores Department Seller (Third Party) Commercial Bank Budget Section Oil & Gas Development Company Ltd. 20 2.2.8. I nsurance Section 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. 2.2.8.1. Tasks Performed • I have studied the procedures and policies of the insurance claims • As always, I have also reviewed the past record in this section • I have prepared vouchers and then post them on the system. • 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 INSURANCE SECTION Investment Companies Employees Legal heirs Oil & Gas Development Company Ltd. 21 2.3. SWOT ANALYSIS OF OGDCL 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. Oil & Gas Development Company Ltd. 22 • OGDCL, under a dynamic leadership foresees the organization to be a leading energy with the objective to maximize the profits and ensure healthy returns to the stock holders. 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. Oil & Gas Development Company Ltd. 23 • 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. Oil & Gas Development Company Ltd. 24 Compensation and promotions should be performance based rather than seniority or favoritism. As the promotion policy of the corporation clearly shows merit + seniority, so it should be fully implemented. Clear job description is needed so that employees know about their duties and complete them with honesty and fairness. Training facilities should be awarded according to the requirement of the job. Hierarchy levels should be reduced in order to improve interaction, communication and coordination at each level. Decision making and authority should be delegated to a certain extent for reducing delayed procedures and saving time. There should be informal communication among the superiors and sub-ordinates by arranging tea party once in four months or six months and in this way the distance among them will be reduced. As a result employee‟s efficiency can be enhanced. It is also needed that in this modern area computerization of record is very much essential .So to facilitate the management computer system in all the section must be introduced. Quarterly comparison of actual verses budgeted expenditure must be carried out to discover weakness and cost over-runs. To offset recruitment bias favoritism should be completely discouraged. And try to eliminate political interference in recruitment, because it will affect the efficiency and ultimately the corporation will unable the organization to achieve its objective. OGDCL should emphasize on reducing production cost and optimizing productivity by introducing new technology and employing skillful human resource. Management should try to develop maximum and minimum store inventory levels and also 100% physical verification to be done at least once a year. Oil & Gas Development Company Ltd. 25 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 listed on all the three stock exchanges of Pakistan as well as on the London Stock Exchange. The analysis of OGDCL‟s financial statement shows that it has a high tendency to pay its debts and to convert assets 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”. Company’s sales revenue and profit after taxation increased by 9.2% and 7.4% to Rs 155.6 billion and Rs 63.5 billion respectively, resulting in Earnings per Share (EPS) of Rs 14.77 compared to Rs 13.76 during the preceding year. Oil & Gas Development Company Ltd. 26 REFERENCES http://www.ogdcl.com/ http://www.ogdcl.com/UploadFolder/financial/OGDCl_Complete_Ann2011.pdf Mr. Sajid Mehmood (Corporate Legal Officer) Kamal Khan (DCA Final Accounts Section) Murad Niaz (GM Finance) Muhammad Khalid (Chief Acct. Bank Section) Muhammad Saleem Rana (DCA Stores & Fixed Assets Section) Shaukat Ali (Chief Acct. Sales Section) Zahoor Mohyudin (Chief Acct. Import Section) Arshad Mehmud (Chief Acct. Insurance Section) NOTE: A photocopy of the Official Document issued by OGDCL Admin Section, containing Signatures, stamps and contact number of the above mentioned persons and the attendance clearance memo is attached in the next page. Oil & Gas Development Company Ltd. 27 1 Oil & Gas Development Company Ltd. 28 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. Oil & Gas Development Company Ltd. 29 2 Oil & Gas Development Company Ltd. 30 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 (Student of Business Administration) Oil & Gas Development Company Ltd. 31 FAISAL MEHBOOB H. No. 138-A, Street No. 20, Gulzar-e-Quaid, Rawalpindi Phone: 0344-5499760 E-mail:
[email protected] 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 COMSATS Institute of Information Technology, Islamabad, Bachelors in Business Administration, CGPA = 3.24 (Continued) SPECIALIZATION IN COURSES Financial Accounting, Managerial Accounting, Financial Management, Business Finance, Credit Management, Corporate Finance, International Finance, Investment & Portfolio Management etc. Scholars College Cantt. Rawalpindi, Intermediate in Computer Science. F.G Sir Syed Boys Secondary School Rawalpindi Cantt. Matriculation in Science PARTICIPATION Training Workshop on Consumer Issues, organized by The Network of Consumer Protection in Pakistan, 18th of December 2011 Bringing in a change: An easy route, held on 21 st May 2010 at COMSATS Institute of Information Technology SIDE PROJECTS 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. Oil & Gas Development Company Ltd. 32 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 Announced results for inter-department cricket competition Participated as a host in the seminar on “Auditing” in CIIT Spoke as a host for parliamentary debate between engineering and management science departments of CIIT MANAGEMENT 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 Proficient in Word, Excel and PowerPoint Internet browsing Windows and other software and hardware installations INTERESTS Playing Cricket Travelling Book reading REFERENCES Will be provided on request