OGDC development programme approved

Prime Minister Shaukat Aziz has approved the 2006-07 development programme for Oil and Gas Development Company Limited (OGDC) and set its oil and gas production target at 56,570 barrels per day and 1346 MMCFD, respectively.
The plan indicates that ODGC will drill 50 wells (34 exploratory and 16 developmental) in the next fiscal year, whereas it''s going to complete 30 wells (24 exploratory and 6 developmental) by June 30, this year.
The OGDC Managing Director, Arshid Nasr, gave the Prime Minister a presentation on June 16, covering current production of oil and gas and projected estimates for the next fiscal year. He gave a clear picture of the company''s financial strength, its potential, procedures to be followed in the award of contracts for development and exploration works.
The presentation also focused on Global Depository Receipts (GDRs) current status and the deadline for offering to the buyers through London Stock Exchange.
The presentation included projects coming up for production in the next two years. These were Uch-II (Power plant) with 200 MMCFD gas production; Qadirpur Compression 650 MMCFD gas by September 2008; Tando AllahYar gas 28 MMCFD and oil 2500 barrels per day by June 2007; Sinjhoro gas 28 MMCFD and oil 3500 barrels per day by June 2007; Dhodak Expansion gas 20 MMCFD and oil 1700 barrels per day by June 2007; Dakhani Expansion gas 12 MMCFD and oil 720 by March 2007; and Chanda gas 8,5 MMCFD and LPG 25 M.T/D by September 2006.
Financial strength of the first nine months of the current fiscal year showed that OGDC had earned Rs 69.94 billion, and its profit before tax was Rs 48.43 billion, and profit after tax stood at Rs 33.20 billion. It added that OGDC had declared 52.5 percent dividend and paid Rs 7.72 per share earning.
Sources said that the Prime Minister appreciated OGDC''s new management vision to take it forward and explore oil and gas potential to an optimal level. He asked the Managing Director to strictly follow the rules and procedures in award of contracts for all development works in the future and make OGDC a world class company in true sense.
The Prime Minister was informed that the previous management had deviated from the rules and standard procedures in award of contracts for various key development projects. The Prime Minister was informed that an in-depth review had shown that the previous management took major deviations in a number of areas from laid down rules, regulations and procedures especially in issuance of Letters of Intent (LOI), tender process, award of contracts for major projects.
Shaukat directed Arshid Nasr to review the decisions taken by the previous management against rules and make corrections wherever and whenever necessary to ensure transparency and good governance in all operations of the company.
Regarding GDRs, Shaukat asked OGDC to closely work with the Privatisation Commission and the advisor appointed for the transaction to complete the entire process as per schedule.
The Prime Minister set the deadline of September 30 for GDR offering in the international market.
Arshid Nasr informed the Prime Minister that the company had established a strong business procedure and internal checks system for all operations to ensure accountability and transparency. He said that OGDC was making all-out efforts to attract foreign investment in the country''s oil and gas sector. He in particular mentioned offshore initiatives and said that they would be used as an attraction to encourage foreign investors to invest in Pakistan oil and gas sector.
The presentation also focused on rationalisation of the company''s human resources, develop in-house expertise for offshore projects and be a responsible corporate citizen. It also indicated a strategy to improve OGDC image at home and abroad.
According to the presentation, OGDC has 63 percent share of total local exploration. Its share in oil production, as on June 1, stood at 39,048 barrels per day against 65,080 total local production. For gas, OGDC share was 979 MMCFD against total local 3898 MMCFD production.
Total local oil and gas consumption stood at 365,000 barrels per day and 3317 MMCFD respectively. Pakistan meets entire gas consumption from indigenous resources but depends heavily on foreign resources for oil needs.
Arshid informed the Prime Minister that being a corporate citizen, OGDC spent Rs 196 million on construction of road in Balochistan, paid Rs 70 million for Earthquake relief fund, Rs 43 million for Tando Allahyar development project, Rs 15.50 million on construction of Trasuma centre in Ghotki, Sindh, Rs 15.50 million on construction of road at Tando Alam Oil Complex and Rs 10 million for free health care at OGDC dispensaries in 2005-06.
When this correspondent approached Arshid for comments on OGDC future development plan and his presentation to the Prime Minister, he said: " Being a firm believer that collective wisdom can work better, I have taken everybody in my organisation on board to achieve the targets set by the Prime Minister."
He said he was confident that teamwork would serve the purpose of making OGDC a vibrant entity in true sense and complete exploration and production work within the stipulated period.
Arshid said he also believed in merit and transparency. He said: "I have asked everybody, right from top to bottom in OGDC, that deviation in rules and procedures will not be allowed and as far as the past is concerned a committee has already been formed to check the deviations from the rules in award of contracts and issuance of Letter of Intent (LoI)."
He said that the review committee would complete its job on priority basis and submit the cases to the board wherein rules were not followed by previous management. Arshid added that in the future OGDC would advertise all contracts in the press and pick up the right party for the jobs involving huge public money.