ASSAIGNMENT
- 1. Larry E.Greiner model of organization evolution & revolution This diamention modeldevelopedby professoremeritus Larry Greiner from may_june in 1998 that how and why an organization are unable to grow and modelis based on certain assumption about an organization development The growing organization move through five distinguishable phases of development each of which contains a relatively claim period of growth that ends with a management crisis .He argues moverover, that each phase is strongly inflused by pervious one a management with a sense of its own organization”s history can anticipate and prepare for the next developmental crisis Greiner dimension of organization development 1.Age of organization 2.Size of organization 3.Stage of evolution 4.Stage of revolution 5.Growth rate of Industry
- 2. Oil and Gas Development Company Limited Prior to OGDCL Prior to OGDCL's emergence, exploration activities in the country were carried out by Pakistan Petroleum Ltd. (PPL) and Pakistan Oilfields Ltd. (POL). In 1952, PPL discovered a giant gas field at Sui in Balochistan. This discovery generated immense interest in exploration and five major foreign oil companies entered into concession agreements with the Government. During the 1950s, these companies carried out extensive geological and geophysical surveys and drilled 47 exploratory wells. As a result, a few small gas fields were discovered. Despite these gas discoveries, exploration activity after having reached its peak in mid-1950s, declined in the late fifties. Private Companies whose main objective was to earn profit were not interested in developing the gas discoveries especially when infrastructure and demand for gas was non-existent. With exploration activity at its lowest ebb several foreign exploration contracting companies
- 3. terminated their operation and either reduced or relinquished land holdings in 1961. Establishment of OGDC To revive exploration in the energy sector the Government of Pakistan signed a long-term loan Agreement on 04 March 1961 with the USSR, whereby Pakistan received 27 million Rubles to finance equipment and services of Soviet experts for exploration. Pursuant to the Agreement, OGDC was created under an Ordinance dated 20th September 1961. The Corporation was charged with responsibility to undertake a well thought out and systematic exploratory programme and to plan and promote Pakistan's oil and gas prospects. As an instrument of policy in the oil and gas sector, the Corporation followed the Government instructions in matters of exploration and development. The day to day management was however, vested in a five-member Board of Directors appointed by the Government. In the initial stages the financial resources were arranged by the GOP as the OGDC lacked the ways and means to raise the risk capital. The first 10 to 15 years were devoted to development of manpower and building of infrastructure to undertake much larger exploration programmes. Transition to a self financing entity Noting the Company's success, due to major oil and gas discoveries in the eighties, the Government in July 1989, off- loaded the Company from the Federal Budget and allowed it to manage its activities with self generated funds. The financial year 1989-90, was OGDC's first year of self- financing. It was a great challenge for OGDC. The obvious initial
- 4. target during the first year of self-financing was to generate sufficient resources to maintain the momentum of exploration and development at a pace envisaged in the Public Sector Development Programme (PSDP) as well as to meet its debt servicing obligations. OGDC not only generated enough internal funds to meet its debt obligations but also invested enough resources in exploration and development to increase the country's reserves and production. Conversion into Public Limited Company Prior to 23 October 1997, OGDCL was a statutory Corporation, and was known as OGDC (Oil & Gas Development Corporation). It has been incorporated as a Public Limited Company w.e.f. 23 October 1997 and is now known as OGDCL (Oil & Gas Development Company Ltd.). GDR In December 2006, the Government of Pakistan divested a further 10% of its holding in the company. The Company is now listed on the London Stock Exchange since on December 06, 2006. OGDCL Mission 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.
- 5. Overview of the Organization Brief History of Oil & Gas development Company Limited Type Public Traded as KSE OGDCL LSE OGDCL Industry Oil & Gas Founded 4th April 1961 Head quarter Islamabad Pakistan Area served Pakistan Key people Zahid Muzzafar Chairman Products Fuel, Natural Gas Revenue US 4.5 billion in 2015 Total assets 3.93 billion in 2013 Total equity 3.07 billion in 2013 Number of empolyees 11000 Age of OGDCL OGDCL Goals & Core Values Core Values Merit Integrity Team Work Safety Dedication Innovation
- 6. Goals Financial Build strategic reserves for future growth/expansion Growth and superior returns to all stakeholders Double the value of the company in the next five years. Make investment decisions by ranking projects on the basis of best economic indicators Maximize profits by investing surplus funds in profitable avenues Reduce cost and time overruns to improve performance results. Customers Continuously improve quality of service and responsiveness to maintain a satisfied customer base. Improve reliability and efficiency of supply to the customer Be a responsible corporate citizen Learning & growth Motivate our work force, and enhance their technical, managerial and business skills through modern HR practices. Acquire, learn and apply state-of-the-art technology. Emphasize organizational learning and research through effective use of knowledge management systems. Fill the competency gap within the organization by attracting and retaining best professionals. Attain full autonomy in financial and decision making matters. Internal Processing Goals Evolve consensus through consultative process inter-linking activities of all departments Excel in exploration, development and commercialization Be transparent in all business transactions Synergize through effective business practices and teamwork Have well-defined SOP’s with specific ownerships and accountabilities
- 7. Improve internal business decision making and strategic planning through state-of-the-art MIS Improve internal controls Periodic business process reengineering . Size of OGDCL development Our primary objective as a leading Exploration and Production (“E&P”) Company in Pakistan is to enhance our reserves and production profile and, ultimately, to maximise value for our shareholders. In order to achieve this goal, we are seeking to execute the following strategic goals: Accelerate Production Growth: We plan to continue increasing production growth, which will allow us to utilise our significant reserves base and capitalise on the economic growth and energy demand in Pakistan. More specifically, we plan to increase our average net gas production from 1,173 MMscfd in FY 2014 to 1,311 MMscfd in FY 2015; and our average net oil production from 41,330 bpd in FY 2014 to 44,732 bpd in FY 2015. Exploit Exploration Opportunities: Our exploration-led growth strategy is based on increasing our resource portfolio of large exploration assets and pursuing an early commercialisation of development projects in order to enhance our production growth. In FY 2014, we added 29 new licences across the country to our exploration portfolio and completed eight exploration and appraisal wells and nine development wells. For FY 2015, we have set targets for drilling of at least 19 exploration and appraisal wells, and 16 development wells. Our achieving this target is dependent on a number of factors, including the security situation in the area where the well is to be drilled, our acquisition of necessary land rights in a timely manner, and
- 8. other factors. The Company has drilled three wells so far during the current FY 2015. We also plan to significantly increase our efforts in seismic survey, utilising the latest technology, in order to build upon our existing technical understanding of our sizable exploration acreage. In particular, we plan to increase our 2D and 3D onshore seismic surveys in FY 2015 to 2,745 L. kms and 2,075 sq. kms, respectively (of which 1,550 L. kms and 420 sq. kms respectively, are contingent on our evaluation of the need and potential value of additional data).While our exploration activities to date have been predominantly onshore, we are also increasingly focusing on offshore exploration, which presents large unexplored opportunities. Our offshore programme involves working with new and existing strategic partners. Historically this has allowed us to increase our in-house technological know-how and share associated costs and risks in exploration projects. We recently commissioned CGG, the geosciences firm, to conduct a study of two offshore exploration licences, and are currently reviewing their report. Pursue International Opportunities: We aim to pursue growth both organically and through selective international acquisitions, maintaining flexibility under differing market conditions. We intend to build upon our technical and operational expertise in order to increase our chances of capitalising on new opportunities outside Pakistan. We also intend to use the knowledge of our producing and exploration assets in exploring geologically similar fields in the Middle East, North Africa and Central Asia regions. This selective acquisition-led growth will be supported by the financial and transactional experience of our senior management and will focus on those international opportunities that involve high-quality assets in our target basins with value growth potential.
- 9. Strive to implement International Best Practice: We strive to implement international best practices which seek to bring about an efficient organizational structure and business processes that are focused on production. The Company has established an in-house technical services division, the Petroserv Directorate, which separates technical support services from core E&P activities. In addition, we strive to follow international best practice for the maintenance and quality control of our equipment to ensure uninterrupted and safe operations. We continuously monitor and evaluate our performance focusing on continuous improvement in areas, such as safety of operations, reliability and efficiency and security of our personnel. We are also subject to various environmental regulations imposed both by the Government of Pakistan and provincial governments, which monitor and enforce rules regarding environmental, health and safety compliance. Maintain High Shareholder Returns: We aim to maintain the attractive returns we have been able to deliver to our shareholders over the long-term. Our well-established position within the oil and gas sector in Pakistan and our track record for project delivery have enabled us to provide shareholders with stable and growing earnings per share and attractive returns on capital. Although we expect a short-term decrease in our after-tax profit margins as a result of increased E&P expenditure, based on the Company’s successful track record in efficient operations and achieved production growth, we believe that we will be able to retain our financial performance and maintain the current levels of shareholder returns Stage of OGDCL evolution development
- 10. During the last five decades, OGDCL has covered significant distance. It has braved myriad challenges to endorse its position in the industry today, such as earning the coveted status of a self- sustaining and self-reliant organization, and embracing a progressive corporate culture. No wonder today, OGDCL has attained the benchmark position as an industry leader, in the Pakistan E&P industry. OGDCL has a strong vision and passion to contribute to the development of the Country’s E&P sector and to enhance energy security of Pakistan. With a formidable presence in the length and breadth of the country, OGDCL is looking beyond geographical boundaries for E&P opportunities. Efforts are continuing towards formulation of Joint Ventures with leading E&P companies both within the country and abroad. OGDCL has a highly significant role to play in narrowing the yawning divide between demand and supply of energy in Pakistan. As we step forth to embrace this daunting challenge, we do it with vision and commitment. We have a futuristic business strategy in place, which seeks to promote and protect the interests of all stakeholders-employees, shareholders, partners, communities and people. The Company, equipped with its Strategic Business plan in line with augmenting energy supply in the Country, has developed strategies to optimize reserves additions and its production base. With technical prowess in onshore exploration and production, the Company has changed focus to a more challenging area i.e. offshore exploration and tight gas reservoirs. OGDCL is actively participating in national bid rounds for acquiring more acreages and gearing to participate in International bidding rounds to work towards international presence in line with its Vision. OGDCL also intends to enhance its reserves and to focus on, and strengthen core business (E&P) functions by incorporating international best practices and innovative thinking in Company culture
- 11. Stage of OGDCL revolution develpoment OGDCL’s under a forward looking management foresees the organization as not only the leading E&P Company of the country, but also as a company known for its people, partnerships and performance in the region. The Company continued with its strategies of accelerating oil and gas exploration, adding to its reserves, early development of newly discovered fields and strengthening of its oil and gas production base in order to enhance indigenous production of the country and create value for its shareholders Human Resources: During the last 46 years the Corporation has grown into a technically feasible and commercially viable organization. It has developed a highly qualified pool of professionals who can undertake and supervise almost all phases of oil and gas exploration and production starting from preliminary geological surveys and culminating in the operation of oil and gas processing plants Equipment Base In order to execute the exploratory and development programmes, OGDCL has also developed a sound equipment and operational base which includes drilling rigs, Workover rigs, Geological Field Party, Seismic parties, Engineering Field Parties, Gas Gathering and Pipeline Construction Party, Seismic Data Processing Centre, Geological Analysis Laboratory, Wireline Logging Unit, Cementing Units and Data Logging Unit. Good Governance Initiatives have and are being taken to effectively establish Good Governance practices through:
- 12. Introduction of Code of Ethics and Business Practices. Merit - driven hiring Performance - driven promotions and appraisals. Strict adherence to laid-down rules, regulations and procedures. Development of Policy Statements in the areas of Marketing, CSR, Risk Management, etc, as a part of its business principles. Business Development Initiatives have been taken to enhance OGDCL’s business canvas. OGDCL will avail opportunities, to acquire overseas acreage by buying stakes in existing viable producing fields. OGDCL is also looking into the possibility of E&P opportunities and joint venture collaborations outside Pakistan, which would include swap of assets for reserves acquisition with percentage of working interest in international market. OGDCL with an aggressive business development strategy provides an enabling environment for foreign participation (either as a JV partner or on a stand-alone basis). The Company is also aiming at fast-track development of its current and future projects at an aggressive pace without compromising quality and transparency
- 13. Growth rate of OGDCL : Oil and Gas Development Company Limited (OGDCL) has achieved 4.6 percent growth rate in production of oil and gas, a significant increase in exploration and will drill 37 new wells during the current fiscal year against 17 wells drilled last year.At a seminar organised by Petroleum Institute of Pakistan (PIP), Masood Siddiqui Managin Director/Chief ExecutiveOfficer OGDCL briefed OGDCL was spending Rs 635.273 million which is 1 percent of OGDCL's net profit after tax. Around 52 percent of the allocated budget will be invested in Sindh amounting to Rs 329.488 million, 28 percent in Khyber Pakhtunkhwa (KP) amounting to Rs 177.650 million, 12 percent in Punjab amounting to Rs 75.921million and 8 percent in Balochistan amounting to Rs 52.214 million. The investment will be made for the welfare ofthe local communities in health, education and sanitation schemes for improving their quality of life and livelihood.OGDCL has achieved 92 percent of the settarget by producing 43,298 barrels of oil per day as heavy rains and flood in Balochistan and Sindh provinces affected the operations whereas 100 percent of the set target achieved by producing 981 MMCF gas per day in the first quarter of financial year 2012-13.OGDCL was concentrating on fast track basis to develop upcoming projects that is (KPD-TAY) Integrated Development Projects, Sanjharo Development Project, Uch Development Project, Jhal Magsi Development Project, Mela Development Project and Nashpha Development Project.KPD- TAY Development Project located in District Hyderabad Sindh after completionof its first phase is producing 110 MMCF gas per day and after completion of its second phase, 125 MMCF gas per day will be produced in second quarter of 2013. Sinjhoro Development Project is ready to produce 20 MMCF gas per day
- 14. subject to acceptance by Sui Southern Gas CompanyLimited (SSGCL) and it will add 11 MMCF gas per day by first quarter of 2013.Uch Development Project District Dera Bughti Balochistan will start producing 240 MMCF gas per day for power generation of 404-megawatt electricity inthe first quarter of 2014.Jhal Magsi Development Project, District Jhal Magsi Balochistan will start producing 16.5 MMCF gas per day to SSGCL by last quarter of 2013.Mela Development Project LPG Plant, District Kohat KPK will start producing 25 MMCF gas per day in the last quarter of 2013. Nashpha Development Project LPG Plant District Karak will add 79 MMCF gas per day in first quarter of 2014. Conclution Know where you are in development sequence Recognized that limited range of solution Realized that solutions breed new problems