INTERNSHIP REPORT

Oil and gas development corporation limited

This Internship report submitted to the department of management sciences of virtual
university in order to complete the requirements for degree of master in Business
administration

Submitted by
MC-180404510
Sohaib Sajjad
Autumn 2020
9th July 2020
[email protected]
0311-3755555
4th Semester
In charge: Muhammad Hussain
Department of management sciences
Virtual university of Pakistan

1
Contents
Executive Summary..........................................................................................................................4
Company Overview..........................................................................................................................5
VISION STATEMENT:.....................................................................................................................6
MISSION STATEMENT:..................................................................................................................6
Internship plan:................................................................................................................................6
Training Program:.................................................................................................................................6
Learnings Experiences:..........................................................................................................................7
RATIOS..................................................................................................................................................7
Organizational Analysis......................................................................................................................18
threat to petroleum exploration:...................................................................................................19
Identifications of Main Problems.......................................................................................................20
Recommendations..............................................................................................................................20
Conclusion/ Learning Outcomes.........................................................................................................21

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Dedication.
I dedicate this report to my mother who give me courage and support me in every phase of
my life.

Acknowledgement
I acknowledge the effort of My Mentor Sir Muhammad Hussain who helps me during whole
course and response my queries and try his best to successfully completion of this report.

Executive summary

Oil and gas development corporation limited (OGDCL) is the biggest company having
majority share in exploration and production sector of Pakistan. The past measurement of the
Co can be analysis by using techniques like ratio financial and non-financial employee’s
satisfaction.

SWOT analysis

Strength. Company strength is the company has monopoly in oil and gas production in
Pakistan

Weakness. The employees of the company is not motivated.

Opportunity. Company has opportunity to in electric Production as the company is cash cow.

Threat. The Threat for the company is the public is more concern about of environment and
trend for petrol will decrease in future.

PEST Analysis.

Political factor. The company is highly effect by political environment of the countries as the
country like Pakistan is politically instable and every new minister for oil and gas production
changed the policies and its effect the company

Economical factor: the economics of Pakistan is not stable high floatation of exchange rate
inflation rate interest rate effect the company.

Social Factor; The social factor includes General public attitude toward society at the
company is petrol sector is and its affect the environment of the company

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Technological factor. This include of use of advance level equipment and more advanced
procedure to increase its production.

Company Overview
Oil and gas development corporation limited (OGDCL) was incorporated in year 1961 in
Islamabad (ICT) with the only aim to be the leader of provider Oil and gas development to
the country by enhance the exploration and production both national and international, using
all options including joint venture, merger and aquitions and strategic alliances.
Prior to Oil and gas development corporation limited (OGDCL) emergence, exploration
activities in the country were carried out by Pakistan Petroleum Ltd and Pak Oil Fields Ltd In
1952, Pakistan Petroleum Limited (PPL) by discovering a mega gas field at Sui in
Baluchistan. By discovering this generated interest in exploration and five major foreign oil
companies entered into concession agreements with the Government.
Before 1950, the companies carried out extensive geological and geophysical surveys and
drilled 47 exploratory wells. As resulting small gas fields were discovered in a few locations.
Despite these gas and petrol field discovered, exploration activity after having reached its
highest level in mid-1950, declined in the late 1960. Private entities whose mission was to
earn profit were not interested in developing the gas field especially when infrastructure and
demand for gas was non-existent.

Organizational Hierarchy chart

BOD

Managing Committee

CEO

Mechanical Production planing sale & marketing Account & finance Admin IT HR

Field Manager Prodcton Manager Finance manager IT manager

Sale manger Admin Manager

HR Manager

Engineering

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Product Line

1. Crude oil
2. Gas
3. LGP
4. Sulphur
5. Gas Processing

In my opinion the structure and practices of the organization fulfilling the requirement of the
company like the company has segregations of duties and every employee accountable to their
direct supervisor.

VISION STATEMENT:
To be a leading multinational Exploration and Production Company

MISSION STATEMENT:

“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”

Internship Plan:

I started my Internship in finance department of Oil and gas development corporation limited
(OGDCL) on 2nd of May 2020 to 30th of June 2020 (9 Weeks) and mostly my duration was
spent in the head office which is located in Islamabad. I have work in this department and
learning how to prepare general journal, general ledger, Trail balance and Financial statement
of the company.

Training Program:

5
I chose this organization because of complexity of accounting and finance transactions in oil
and gas sectors and involvement of joint ventures and joint operations accounting
transactions process. The following duties have been assignment to me during my tenure as
mentioned below;
1 # Week Inventory control & invoicing
2 # week Variance analysis
3 # week Budgeting & forecasting,
4 # week Accounts payable & receivable
5 # week Book keeping
6 # week Variance analysis & reporting in compliance with IFRSs and IAS

Other Miscellaneous Minor Tasks (Indoor & Outdoor):

 Visiting Petroleum Exploration & Production

 Agree production levels, contracts and expenses with suppliers

 Confirms customer contract number and name with system

 Collection, evaluation and responds to customers responce

 Elevation market data to guide decisions

 Producing information for internet based.

 Provide Price of different product information

 Handles and checking bookings and invoicing

Learning Experience:

The company conducts many training programs with special emphasis on International
Financial Reporting Standards (IFRSs) and International Accounting Standards (IASs). This
includes International Financial Reporting Standard 9 financial instrument International
Financial Reporting Standard 16 Lease and International Financial Reporting Standard 15
revenue from customers. Training programs for graduates and technicians, enabling their

6
career induction as well as short refresher and advanced training courses for experienced
professionals.

RATIOS
Gross Profit on Revenue
Ratio Formula Amounts (PKR)
2019 2018 2017

Gross Profit on Revenue Gross Profit 167,061 121,479 95,004,

,563 ,743 186
Revenue 261,481 205,335 171,829
,188 ,000 ,364

Ratios  
2019 2018 2017 % Variance % Variance

63.9% 59.2% 55.3% 8% 7%

Comments

The GP margin ratio analysis shows of a company’s financial health. It indicates investors how much gross
profit every Rupees of revenue a company is earning. Company has increased consistently 7% and 8%
every year. Investor will make happily make more investment.

GP Ratio

Chart Title
66.0%

64.0%

62.0%

60.0%

58.0%

56.0%

54.0%

52.0%

50.0%
1 2 3

7
Net Profit Margin
Ratio Formula Amounts (PKR)
2019 2018 2017

Net Profit Margin Net profit 118,385 78,736, 63,803,

,788 295 402
Revenue 261,481 205,335 171,829
,188 ,000 ,364

Ratios
2019 2018 2017 % Variance % Variance

45.3% 38.3% 37.1% 18% 3%

Comments

This ratio is for net income of the company during the year. A High level of net profit margin means that Oil &
Gas Development Corporation Ltd (ogdcl) is effective in converting sales into actual profit. It is increasing
that the best sign for the company. The company increase net profit ratio by increase selling. For the year ended
June 2018 is 3% and for the year ended June 2019 is 18% which is significant growth in net profit margin.

50.0%

45.0%

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%
1 2 3

8
Current Ratio

Ratio Formula Amounts (PKR)

2019 2018 2017

Current ratio Current assets 509,785 405,857 342,460

,826 ,905 ,219
Current liabilities 72,643, 55,194, 53,610,
471 887 444

Ratios
2019 2018 2017 % Variance % Variance

7.02 7.35 6.39 -5% 15%

Comments

Liquidity has improved last the year due to reduction of payables mainly creditors and sales tax payable. The
current ratio measures a company's ability to pay short-term obligations or those due within one year. For the
year ended June 2018 is 15% increase and for the year ended June 2019 is -5% decrease.

Chart Title
7.60
7.40
7.20
7.00
6.80
6.60
6.40
6.20
6.00
5.80
1 2 3

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Quick Ratio
Ratio Formula Amounts (PKR)
2019 2018 2017

Quick Ratio Cash and cash equivalent 95,296, 71,505, 15,454,

145 142 795
Current liabilities 72,643, 55,194, 53,610,
471 887 444

Ratios
2019 2018 2017 % Variance % Variance

1.31 1.30 0.29 1% 349%

Comments

Overall liquidity has positive and has liquidity improved due to improvement in collection period. Significant
collections are done last the year. Also better liquidity is attained by Company through receipt of payment in
Advance from its Customer. Company is rich in its Cash money reserves. Which it further utilizes by making
short term investments. For the year ended June 2018 is 350% increase which is huge.

1.40

1.20

1.00

0.80

0.60

0.40

0.20

-
1 2 3

10
Account receivable
Ratio Formula Amounts (PKR)
2019 2018 2017

Accounts receivable Revenue 261,48 205,33 171,82

turnover 1,188 5,000 9,364
Trade debts 242,73 163,69 118,57
1,940 1,820 4,468

Ratios
2019 2018 2017 % Variance % Variance

1.08 1.25 1.45 -14% -13%

Comments

Major receivable balance outstanding from Entities customers have been recovered during current year
and last year by the Entity. Its indicate the entity collecting of debtors is efficient and that the company
has a high proportion of quality customers that pay their debts quickly.

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 1.60

1.40

1.20

1.00

0.80

0.60

0.40

0.20

-
1 2 3

No of days receivable
Ratio Formula Amounts (PKR)
2019 2018 2017

No. of days of receivable Trade debts 242,731 163,691 118,574

,940 ,820 ,468
Avg. days sales on credit 716, 562, 470,
387 562 765

Ratios
2019 2018 2017 % Variance % Variance

339 291 252 16% 16%

Comments

Receivable collection period not improved during the year mainly due to the fact that major receivable
balance outstanding from related parties and increase of activation of providing consumer loans for goods.
And its increasing consisantly company should work to improve this ratio.

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 Chart Title
400.00

350.00

300.00

250.00

200.00

150.00

100.00

50.00

-
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017
Total assets turnover Revenue 261,481 205,335 171,829
,188 ,000 ,364
Total assets 766,597 666,477 627,287
,190 ,197 ,973

Ratios
2019 2018 2017 % Variance % Variance
0.34 0.31 0.27 11% 12%

Comments

Due to increase of revenue compared to last year as a result of increased demand overall productivity of assets
have improved.

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 0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

-
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017

Fixed assets turnover Revenue 261,481 205,335 171,829

,188 ,000 ,364
Property, plant & equipment 117,787 124,063 128,336
,033 ,611 ,018

Ratios
2019 2018 2017 % Variance % Variance

2.22 1.66 1.34 34% 24%

Comments

Revenue is earned from sale of exploation oil and gas product. Plant and machinery are the assets used
directly for exploation of goods due to increased earning over the year this ratio has improved.

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 2.50

2.00

1.50

1.00

0.50

-
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017

Times interest earned Earning before Interest & 178,291 114,35 90,652,
tax ,951 3,647 096
Total Interest Expenses 1,692, 1,726 1,514,
538 ,886 634

Ratios
2019 2018 2017 % Variance % Variance

105.34 66.22 59.85 59% 11%

Comments

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The ratio is a way to measure enitity ability to make payment the interest. The high level of this ratio is better.
If the ratio slips decrease 1.0 this raises a red flag. The company Interest coverage ratio is improved for the year
ended June 2018 is 11% increase and for the year ended June 2019 is 59% increase which is the good sign
120.00

100.00

80.00

60.00

40.00

20.00

-
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017

Debt Ratio Total Liability 141,231 115,920 114,303

,942 ,775 ,636
Total Assets 766,597 666,477 627,287
,190 ,197 ,973

Ratios
2019 2018 2017 % Variance % Variance

0.18 0.17 0.18 6% -5%

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 Comments

A high ratio also indicates that a company may be putting itself at a risk of default on its loans if interest rates
were to rise suddenly. The company has more assets than liabilities. Debts is low for the year 2017 is .18, for
2018 .17 and for the year ended 2019 is .18 which is almost same in every year.

0.19

0.18

0.18

0.18

0.18

0.18

0.17

0.17

0.17

0.17
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017
Short term debts + Long term Debts+ Other fixed Payment
Debts / Equity Ratio
- - -
Shareholder's Equity 625,365 550,556 512,984
,248 ,422 ,337

Ratios
2019 2018 2017 % Variance % Variance

- - - 0% 0%

Comments

Not applicable as the company does not have short term debts, long term debts and other fixed Payment

17
 Ratio Formula Amounts (PKR)
2019 2018 2017

Operating income Margin Operating Income 217,65 155,24 128,16

1,296 2,628 9,325
Revenue 261,48 205,33 171,82
1,188 5,000 9,364

Ratios
2019 2018 2017 % Variance % Variance

0.83 0.76 0.75 10% 1%

Comments

This ratio is indicate how much profit a company makes after paying for variable costs of production such
as wages, raw materials, etc and its tells us how well the company's operations contribute to its
profitability. A company with a substantial profit margin ratio makes more money on each rupees of sales
than a company with a narrow profit margin.

0.84

0.82

0.80

0.78

0.76

0.74

0.72

0.70
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017
Return on Equity Net Inomce 118,385 78,736 63,803,
,788 ,295 402
Shareholder's Equity 625,365 550,55 512,984

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 ,248 6,422 ,337

Ratios
2019 2018 2017 % Variance % Variance
0.19 0.14 0.12 32% 15%

Comments

This ratio the return on equity ratio shows how much profit each share of common stockholders'
equity generates. The company Interest coverage ratio is improved for the year ended June 2018 is
15% increase and for the year ended June 2019 is 32% increase which is the good sign and investor
willing to make.

0.20

0.18

0.16

0.14

0.12

0.10

0.08

0.06

0.04

0.02

-
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017
Operating cashflow Operating cashflow 72,175, 50,135, 47,771,
235 913 058
Net revenue 261,481 205,335 171,829
,188 ,000 ,364

Ratios

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 2019 2018 2017 % Variance % Variance
0.28 0.24 0.28 13% -12%

Comments

This ratio is a measure of the amount of cash generated by a company's normal business operations. The
company operating cash flow is almost not changing and show insignificant changes during these three years
0.29

0.28

0.27

0.26

0.25

0.24

0.23

0.22
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017
Dividend per share total dividend paid 47,310, 40,858, 25,085,
212 820 581
Total share 4,300, 4,300, 4,300,
298 298 298

Ratios
2019 2018 2017 % Variance % Variance
11.00 9.50 5.83 16% 63%

Comments

Dividend per share tell an investor about the entity past financial ability and its current financial stability. And
the company dividend for each year increasing which means the company financial ability is strong. The
company dividend per share is improved for the year ended June 2018 is 63% increase and for the year ended
June 2019 is 16% increase which is the good sign and investor willing to make.

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 12.00

10.00

8.00

6.00

4.00

2.00

-
1 2 3

Ratio Formula Amounts (PKR)

2019 2018 2017
Earning Per share Net Income of the company 47,310, 78,736, 63,803,
212 295 402
Average Outstanding share 4,300, 4,300, 4,300,
298 298 298

Ratios
2019 2018 2017 % Variance % Variance
11.00 18.31 14.84 -40% 23%

Comments

Its indicates the profitability of a company, which make it very important ratio. It tells the investor who is
primarily interested in a steady source of income, the EPS ratio can tell them the room a company has for
increasing its existing dividend. The company earning per share is improved for the year ended June 2018 is
23% increase and for the year ended June 2019 is 40% decrease which is the which need to improve.

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 20.00

18.00

16.00

14.00

12.00

10.00

8.00

6.00

4.00

2.00

-
1 2 3

Organizational Analysis

Internal Potency/ Strengths at Oil and Gas Development Company Limited

Most Experienced Company in Pakistan

Oil and Gas development company Ltd being one the oldest oil and gas operator companies
since its inception in 1961 has quite experience in this field and knows how the things run in
the market. What are the advantaged and drawbacks of this field.

Organizational Commitment

Employees in Oil and Gas Development Company are considered as one of the most
important asset. At present, keeping employees enables is crucial to be successful
organization in competitive business environment). That’s why Oil and Gas Development

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Company focus on establish good relationship among staff – staff and manager – staff in
company through staff party, sport relationship in company or health service to take care
staffs.

Quality Service

Despite the large number of employees in Oil and Gas Development Company it provides the
highest quality available. Company more than 50-year experience in Pakistan.

Clearly and Fair Price of Packages

If you compare the prices of Oil and Gas development company Ltd as compared to the
closest competitors at international level, then you would be amazed to see the difference in
the amount. Oil and Gas Development Company doesn’t compromise with quality and hence
gives maximum satisfaction to its desired customers under economical packages.

Human Resource Problem:

Oil and Gas Development Company is facing problems such as average number of staff and
the operators need more training to better facilitate the tour group.

Weak Marketing
Oil & Gas Development Company in order to stay in the international market and attain their
position they need to build their image on the minds of the consumer. But currently,
Marketing is one of the weaker links in Oil and Gas Development Company.

Supporting of Government Policy

Pakistani government proposed policy development based on oil and related business
development to support in national economic social development plan.

Threat to petroleum exploration:

Entrance of New Competitors
As this Petroleum industry is ever booming in the country and companies are generating
revenue of this hence new companies also want to join this industry.

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Unstable Political /Economic Conditions
Due to the instability of the political conditions of the country which overall effects the
Petroleum industry.

General Inflation and Environmental Threats

The general inflation rate is increasing as the years passes by hence it can be a threat to
OGDCL as prices go up hence the cost of operations also might go up. On the other hand, the
environmental threats are also increasing hence OGDCL should also be cautious about these
environmental threats such as hydrocarbon reserves, economic, political, drilling, and
geologic assessments of conditions and Energy Exploration and Exploitation is to consider
the geologic risk

Identifications of Main Problems

*Firstly, as discussed before Oil and Gas Development Company Limited needs more man
power that is it needs more Human Resource to better operate their daily operations. Limited
Number of employees can be one of the major problems.

*Secondly, another major problem faced by Oil and Gas Development Company Limited is
limited Marketing due to limited resources such as labor and capital. Marketing is an
essential ingredient in a company to operate efficiently and achieve higher revenues, but it
lacks currently.

*Thirdly, Oil and Gas Development Company Limited is only limited to Pakistan.

*Another problem faced by Oil and Gas Development Company Limited is lack of creativity
in their website, they need to make it more interesting so that the customers once visit the
website can have a better understanding of the company. The website is not user-friendly
hence these things should be taken care of.

*Finally, lack of support from the Government of Pakistan. Government doesn’t provide any
subsidy or any additional benefit to the company.

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 Recommendations

 Invest in their website: They see their website is the centerpiece of their business
success and are willing to invest regularly to keep it updated.

 They don’t compete on price Those most successful businesses are often are more
expensive than their competitors in their product category. So, Oil and Gas
Development Company Limited can charge more as their petrolium experience is
exactly what their ideal customers are looking for (or didn’t know they were looking
for!) and by exceeding their customers’ expectations. They achieve premium pricing
by clearly communicating what value they can offer their ideal customers, what sort
of experience they can expect and what makes them unique to all their other
competitors.

 Increase Their Resources: Oil and Gas Development Company Limited should
invest more in their infrastructure by building more offices across the country to
better facilitate the customers and company the things it is capable of doing across the
country. And on the other hand, they should hire more and more competent and
qualified people for their company, to increase the man-power and to better facilitate
the customers.

Conclusion/ Learning Outcomes

Through this internship I was able to completely understand how operations practically
functions in an organization. I believe that using this internship I have learned how a
company operates in the real world. I think this internship program was worth enough
because the students have not just gotten real work experiences in their universities. They
also have learned many new skills, get more connections and business’ knowledge.

To improve the quality of the internship program, it would be better if there are soft skills
training providing by the university. It could be anything about programming, making
database, etc. This soft skill will be needed in the internship periods. It will be plus points for
the students. This internship was definitely beneficial for me and I feel extremely fortunate
that I had the opportunity to experience and learn so many things. But my work in Oil and

25
Gas Development Company Limited was more than just a way to enriching my experience as
an employee. It was also an unforgettable personal adventure that allowed me to discover a
totally different way of seeing things. I think that it is only when you are separated from your
familiar habits that you can really enjoy life for what it is

.In the nutshell, I would like to mention that using this internship it would be an elevated
moment for me to work in such an prestigious company and it would also assist me in my
career advancement as I have learned a lot about corporate work dealing operations and how
it function hence making it easy for me in future to see how things work in the operations.

Annexes

OGDCL ANNUAL
REPORT- 2019.pdf

OGDCL-AR-2018.pd
f

Annual-Report-201
720171002153148931_0.pdf

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