INSPIRING GROWTH “RESPONSIBLY” Built on the pillars of sustainable development, exploration and social responsibility for the benefit of all, the Oil & Gas Development Company Limited has a storied legacy of providing the nation with a wealth of resources. As a responsible entity, we take it upon ourselves to uplift our society and contribute to the betterment of our people across all our operations. This year’s report is a reflection of our intent to spur development and growth in Pakistan and add value through our social responsibility programs. For the people of this great nation, we envision a future of prosperity and ambition that will carry on for generations to come. CONTENTS Product Portfolio Geographical Presence Review Report to the Members 2 and Net Saleable Production 36 81 on the Statement of Compliance Product-wise Contribution Six Years Performance Statement of Compliance 3 in Net Sales 38 82 Notice of Annual General Vertical and Horizontal Analysis Independent Auditors’ Report to 4 Meeting 41 91 the Members 6 Calendar of Major Events 42 Statement of Value Addition 98 Statement of Financial Position 8 Highlights of the Year 43 DuPont Analysis 100 Statement of Profit or Loss Vision and Mission Analysis of Variation in Results Statement of Comprehensive 10 Core Values and Goals 43 Reported in Interim Reports 101 Income 12 Code of Conduct 44 Share Price Sensitivity Analysis 102 Statement of Changes in Equity 14 Corporate Information 45 Investor Relations 103 Statement of Cash Flow Core Management Team Relationship and Engagement Notes to the Financial 16 45 with Stakeholders 104 Statements 18 Board of Directors 46 Human Resource 169 Pattern of Shareholding 20 Profile of Board of Directors 49 Managing Director’s Review 174 Categories of Shareholders 26 Committees of the Board 51 Directors’ Report 203 Directors’ Report (Urdu) Attendance of the Board and Awards Conferred Abbreviations 29 Committee Meetings 63 204 and Remuneration 30 Organizational Chart 64 Corporate Social Responsibility Form of Proxy Management Objectives and Health, Safety, Environment Form for Video Conference 31 Strategies 74 and Quality Facility Risk and Opportunity Report Principal Risks/Uncertainties and Entry Card 32 77 Mitigation Measures Exploration Licenses Risk Management Policy and 33 79 Business Continuity Plan Development and Production/ Information Technology 34 Mining Leases 80 PRODUCT PORTFOLIO and Net Saleable Production during the Fiscal Year 2017-18 Crude Oil Gas LPG Sulphur 41,278 1,022 690 58 Barrels per day MMcf per day Tons per day Tons per day Major Producing Fields: Nashpa, Kunnar, Pasakhi, Qadirpur, Uch, KPD-TAY, Sinjhoro, KPD-TAY, Dakhni Sinjhoro, TAY Nashpa, Sinjhoro Nashpa, Bobi, Kunnar Oil & Gas Development Company Limited Company Oil & Gas Development 2 PRODUCT-WISE CONTRIBUTION in Net Sales during the Fiscal Year 2017-18 Gas – 49% LPG – 7% Others – 0.18% Crude oil – 44% 2018 Net Sales: Rs 205.335 billion Annual Report 3 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that 21st Annual General Meeting of Oil and Gas Development Company Limited will be held at Marriott Hotel, Islamabad on 25 October 2018, at 09:00 a.m to transact the following business: ORDINARY BUSINESS NOTES 1) To confirm the minutes of the 20th Annual General 1 Participation in the Annual General Meeting Meeting held on 24 October 2017. A member entitled to attend and vote at this meeting is entitled to appoint another person as his/her proxy to 2) To receive, consider and adopt the audited accounts of attend and vote. Proxies in order to be effective must be received at the Registered Office of the Company duly the Company for the year ended 30 June 2018 together stamped and signed not less than 48 hours before the with the Directors’ and Auditors’ Reports thereon. meeting. 3) To approve the final cash dividend @ 25% i.e. Rs 2.5 per 2 CDC Account Holders will have to follow the under share for the year ended 30 June 2018 as recommended mentioned guidelines: by the Board of Directors. This is in addition to three a. For attending the meeting interim cash dividends totaling to 75% i.e. Rs 7.5/- per share already paid during the year. In case of individuals, the account holder or sub- account holder and/or the person whose securities are in group account and their registration details 4) To appoint Auditors for the year 2018-19 and fix their are uploaded as per regulations, shall authenticate remuneration. The present auditors M/s KPMG Taseer his/her identity by showing his/her original Hadi & Co., Chartered Accountants and M/s A.F. Computerized National Identity Card (CNIC) or Ferguson & Co., Chartered Accountants will stand original passport at the time of attending the retired on the conclusion of this meeting. meeting. 5) To transact any other business with the permission of the In the case of corporate entities, the Board of Chair. Directors’ resolution/power of attorney with specimen signature of the nominee shall be By order of the Board produced (unless it has been provided earlier) at the time of the meeting. Islamabad Ahmed Hayat Lak 28 September 2018 Company Secretary Oil & Gas Development Company Limited Company Oil & Gas Development 4 b. For appointing proxies 5 Change in Address i) In case of individuals, the account holder or sub- Members are requested to promptly notify any change in account holder and/or the person whose securities their address. are in group account and their registration details are uploaded as per regulations, shall submit the 6 Dividend Payments through Electronic Mode proxy form as per the above requirement. In order to receive the future dividends through ii) The proxy form shall be witnessed by two persons electronic mode as per the requirements of Section 242 whose names, addresses and CNIC numbers shall of the Companies Act, 2017, shareholders are requested be mentioned on the form. to provide the following detail: iii) Attested copies of CNIC or the passport of the Title of Bank Account: beneficial owners and of the proxy shall be Bank Account (IBAN) Number: furnished with the proxy form. Bank’s Name: iv) The proxy shall produce his/her original CNIC or Branch Name and Address: original passport at the time of the meeting. CNIC Number of the Shareholder: v) In the case of a corporate entity, the Board of Cell Number of the Shareholder: Directors’ resolution/power of attorney with Landline No. of the Shareholder (if any): specimen signature of the person nominated to represent and vote on behalf of the corporate entity 7 Transmission of Annual Audited Financial Statements shall be submitted (unless it has been provided through CDs: earlier) along with proxy form to the Company. The Company has circulated Annual Financial Statements to its members through CDs at their registered 3 Video Conference Facility addresses. Printed copy of above referred statements In accordance with Section 132(2) of the Companies Act, can be provided to members upon request. Request 2017 if the Company receives consent from members Form is available on the website of the Company i.e. holding in aggregate 10% or more shareholding residing www.ogdcl.com in a geographical location to participate in the meeting through video conference at least 7 days prior to the 8 Transmission of Annual Reports through E-Mail: date of Annual General Meeting, the Company will The SECP vide SRO 787 (1)/2014 dated 8 September arrange video conference facility in that city subject to 2014 has provided an option for shareholders to receive availability of such facility in that city. To avail this facility Audited Financial Statements along with Notice of please submit such request to the Company Secretary of Annual General Meeting electronically through email. the Company on given below address: Hence, members who are interested in receiving the Annual Reports and Notice of Annual General Meeting Company Secretary, Oil & Gas Development Company electronically in future are requested to send their email Limited, OGDCL House, Plot No. 3, F-6/G-6, Jinnah addresses on the consent form placed on the Company’s Avenue, Blue Area, Islamabad. website www.ogdcl.com, to the Company’s Share Registrar. The Company shall, however additionally 4 Closure of Share Transfer Books provide hard copies of the Annual Report to such The share transfer books of the Company will remain members, on request, free of cost. closed and no transfer of shares will be accepted for registration from 18 October 2018 to 25 October 2018 9 Availability of Audited Financial Statements on (both days inclusive). Transfers received in order at Company’s Website: the Share Registrar’s office by the close of business on The Audited Financial Statements of the Company for 17 October 2018 will be treated in time for the purpose the year ended 30 June 2018 have been made available of payment of final cash dividend, if approved by the on the Company’s website www.ogdcl.com, in addition Shareholders. to annual and quarterly financial statements for the prior years/periods. 2018 Annual Report 5 CALENDAR OF MAJOR EVENTS During the Fiscal Year 2017-18 01 02 QUARTER QUARTER • Two (2) new gas/condensate discoveries witnessed at • A new gas/condensate discovery witnessed at Dhok Hussain-1, Bhambara-1 and Tando Allah Yar South West-1, Sindh province. KPK province. • Inked an MoU with Gazprom International, Russia aimed at • 20th Annual General Meeting convened at Marriott Hotel, mutual cooperation, joint ventures and use of state-of-the-art Islamabad on 24 October 2017. technology in oil and gas exploration and development. • BOD announced the financial results for the quarter ended • Pakistan’s 71st Independence Day celebrated at OGDCL Head 30 September 2017 and first interim cash dividend of Rs 1.75 Office, Islamabad and field locations with great zeal and fervor.