KP-OGCL draws 2,035 plans to attract foreign investor, introduces new technologies: Raziuddin
Pakistan should offer tax concession to foreign investors at exploration stage
ISLAMABAD: Chief Executive Khyber Pakhtunkhwa Oil and Gas Company Limited (KP-OGCL), Raziuddin, has said that company has chalked out a 2035 development plan to introduce new technologies, attracting foreign investors including local and providing skilled training regarding the exploration in oil and gas sector.
Raziuddin said, “KP-OGCL is acting as facilitator for and partner of other companies like Oil and Gas Development Company Limited (OGDCL) and Kuwait Petroleum already present in the province”. In 2013, there was only one rig in the province. Today exploration success ratio in Khyber Pakhtunkhwa is 1:3 as compare to 1:4 in Pakistan.
In Pakistan, tax concession must be offered to investors at exploration stage otherwise international investors will resort to Malaysia, Vietnam and other countries. Raziuddin suggested, “After successful exploration, FBR can levy tax up to 25 percent”.
Government of Pakistan must form a company to train youth on fast-track basis so that they could get jobs abroad especially oil exploration countries. Remittances will improve standard of living of Pakistani people.
KP-OGCL is planning to build its own head office building, warehouse and lab. It has invited tenders for attaining ISO-9001 (2000) certificate. Currently company has around 60 employees, 40 technical and 20 administrative, all selected on merit. It has hired services of 150 plus ex-servicemen for 24 hours security of oil fields in the province. To cut business costs, a warehouse must be set up in Kohat so that spare parts could not be procured from Korangi Karachi and I-9 Islamabad. Provincial government has been requested to allot 4 kanals land for the warehouse. Dry hole cost is around 40 million dollars.
According to US Information Services, gas potential at Sui is 50 trillion cubic feet. Energy crisis can be solved by hydel power projects. Chief executive believes in corporate activism. Board of directors must measure performance of a CEO.
For state own enterprises like PSO, Pak Steels, SSGC and PIA, government must appoint permanent chief executives along with shadow chief executives.
Raziuddin confided that Malaysian Petronas was formed on model of OGDC, currently OGDCL, but today production performance of OGDCL is just 40,000 barrels per day. It is far below than other companies. OGDCL must have at least 100 wells in the country.
At global level, big companies like Shell, Exxon, Aramco and Petronas are investing due to technological advancement and attractive rate of returns. Saudi Aramco is looking for around 3,000 engineers and sub engineers.
Merit and transparency are key values of KP-OGCL. Articles of association of company are being amended for broad base operations. Company has no discrimination among D.I. Khan, Kohat and others. Specialized security department will be established to protect strategic assets like oil fields.
Corporate social responsibility includes projects in safe drinking water, small dams, educational and healthcare facilities. Flexible social responsibility has gained trust of local communities of Karak, Kohat, etc. KP-OGCL will spend 1 percent of pre-tax profit in corporate social responsibility. Company has consumed Rs.20 million so far.
In wake of 18th Amendment to the Constitution, KP-OGCL came into being in February 2013 to make the province self sufficient in oil and gas production. Today KPK is producing 50,000 barrels per day from 8 rigs. LPG production is about 485 tons. The company is using state of the art seismic and exploration technologies including Petrel software to collect authentic data for geological studies and risk free exploration particularly in KPK and FATA.
Federal and provincial governments have been financially and technically supporting the KP-OGCL. Chief Minister Minister Pervez Khattak has been taking keen interest in affairs of the company. In current fiscal budget 2015-16, provincial government has allocated Rs.1.4 billion. Budget of the company is steadily increasing to meet the needs of increasing population of Khyber Pakhktunkhwa.
Company will establish a training institute so that skilled workers in oil and gas sector could work in petroleum exporting countries. Pakistan would be able to get 5 million dollars annually as remittances.
The company is fully equipped to explore oil from 9000 meters depth. It has participated in Dubai investment road show in February 2015 and is going to participate in an international expo in November this year to attract foreign investors from Middle East. It intends to attract 4 billion dollars direct investment by 2023. It is an achievement that today Chinese engineers and geologists are working in base camps in Kohat.
Former managing director of Attock Refinery Limited and OGDCL, Mr. Raziuddin is an electrical engineer and MBA. He has vast managerial experience in oil and gas sector and has served in leading international companies abroad as well.
