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Finance

Essay by   •  July 31, 2010  •  24,670 Words (99 Pages)  •  2,004 Views

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CONTENTS

Chapter#1 Introduction

1. History of Oil Industry________________________________________01

2. Introduction of Oil and Gas company Limited_____________________ 02

3. Objectives and Limitations of study_____________________________ 03

Chapter#2 Literature Review

4. Literature Review ________________________________________________04

5. Future of Oil industry_____________________________________________ 05

Chapter#3 Methodology

6. Data Collection Method______________________________________06

7. Data Analysis Method_______________________________________ 06

8. Data Presentation Method____________________________________ 09

Chapter#4 Results and Discussions

9. Common size Analysis______________________________________ 10

10. Indexed Analysis___________________________________________15

11. Ratio Analysis_____________________________________________20

12. Industry Comparison________________________________________25

Chapter#4 Conclusions and Recommendations

13. Conclusion________________________________________________26

14. Recommendations__________________________________________26

15. References________________________________________________27

Chapter # 1

Introduction

1) History of the Oil Industry:

The oil industry began over five thousand years ago. In the Middle East, oil seeping up through the ground was used in waterproofing boats and baskets, in paints, lighting and even for medication.

Whale oil has been used in more recent times as a source of light in houses. The first oil well structures to be built in open waters were in the Gulf of Mexico. The structures were the fore-runners for the massive platforms that now stand in very deep water and in many locations around the world, including the North Sea. It wasn't until the 1960s that exploration in the North Sea really begun, without success in the early years. They finally struck oil in 1969 and have been discovering new fields ever since. This was the greatest development project in the world.

The development of the offshore oil industry in hostile waters has been made possible by many achievements comparable with the space industry. Many fields are located far from land and they are getting further away. New fields are being explored in ever deeper and wilder waters, like the Atlantic Ocean west of Scotland. Oil companies cannot afford to have their name associated with accidents. Today the industry is very safety conscious. It has to be for its very survival. Safety measures are given to workers.

Companies share safety information with other companies throughout the industry. This helps to avoid repeated incidents. Petroleum or crude oil is an oily, flammable liquid that occurs naturally in deposits, most often found beneath the surface of the earth.

2) Introduction of Oil and Gas Company Limited:

▪ History:

The Government of Pakistan established Oil and Gas Development Corporation (OGDC) in 1961 as a statutory corporation to undertake exploration and development of oil and gas resources. In October 1997 OGDC was converted into a public limited company and renamed as Oil and Gas Development Company Limited (OGDCL).

In November 2003, on behalf of the Government of Pakistan, the Privatization Commission divested 5% of the Government of Pakistan shareholding in OGDCL by way of an Offer for Sale through an Initial Public Offering at the domestic stock exchanges.

▪ Introduction:

Oil and Gas Development Limited (OGDCL) is the largest petroleum exploration and production (E&P) company in the Pakistan oil and gas sector, and is currently 95% owned by the Government of Pakistan. Expressions of Interest for sale of 51% shares in OGDCL were invited in July 2002 and various oil & gas companies expressed interest, however the transaction was pended until completion of the privatization of Pakistan Petroleum Ltd.

OGDCL's annual sales for the year 2005 are 39,130 barrels of oil per day. OGDCL holds the largest share of oil and gas reserves in the country, being 37% of total oil and 32% of total gas reserves. OGDCL's major oil and gas fields are located at Kunnar, Pasakhi, Bobi, and Tanbdo alam, Thora, Lashari, Sono, Fimkassar, Kal, Sadqal, Rajian, Missakeswal, Dhodhak, Dhakhni, CHanda, Chak, Naurang, Qadirpur, Uch, Pirkoh, Loti, Nandpur/Panjpir and Hundi/Sari.

OGDCL has so far completed major development projects like Dhodak Development Project, Dhaki Development Project, Pirkoh Development Project, Nandpur/Panjpir Development Project, Sadqal Gas Compression Project, Uch Development Project and Bobi Development Project.

OGDCL has made 60 discoveries with a success ratio of 1:3. In the last 4 years, OGDCL has been successful in making 10 discoveries - two oil discoveries and eight gas/condensate discoveries.

3) Objectives and Limitations:

Objectives:

1. To measure the profitability of the company.

2. To increase the efficiency by asset management ratio.

3. To increase the credibility of the firm.

4. To see the future trend in market.

Limitations:

While preparing the report some difficulties arise like Lack of financial data, difficulty in finding industry average. Search for Industry average took a lot of time. And at last this industry average was used for comparing the industries.

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