| Pakistan Oilfields Limited |
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| Annual
Report 1998 |
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| Contents |
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| Pakistan
Oilfields Limited |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Chairman's
Review of Activities |
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| Directors'
Report |
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| Pattern
of Shareholding |
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| Statement
under Section 237 |
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| Ten
Years at a Glance |
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| Auditors'
Report to the Members |
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| Balance
Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Subsidiaries
of Pakistan Oilfields Limited |
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| Attock
Chemicals (Private) Limited |
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| Company
Information |
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| Directors'
Report |
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| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance
Sheet |
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| Profit
and Loss Account |
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| Notes
to the Accounts |
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| Capgas
(Private) Limited |
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| Company
Information |
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| Directors'
Report |
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| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance
Sheet |
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| Profit
and Loss Account |
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| Notes
to the Accounts |
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| Attock
Industrial Products Limited |
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| Company
Information |
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| Directors'
Report |
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| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance
Sheet |
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| Notes
to the Accounts |
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| Company
Information |
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| Directors: |
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Ghaith R. Pharaon |
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Chairman |
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Arif Kemal |
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Chief Executive |
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Shahid Ahmad |
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Munir Ahmad |
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Rashid M. Chaudhry |
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Alternate Director |
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Khalid A. Ghazi |
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Shuaib A. Malik |
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Lt. Gen. (R) Talat Masood |
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Babar Bashir Nawaz |
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Alternate Director |
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Laith G. Pharaon |
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M. Salim |
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Abdus Sattar |
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| Company
Secretary: |
Iqbal A. Khwaja |
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F.C.A |
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| Legal
Advisers: |
Jillani & Associates |
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M. Afzal Siddiqui |
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Legal Advisers Inc. |
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| Tax
Adviser: |
Naseem Zafar Associates |
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| Auditors: |
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A.F. Ferguson & Co. |
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Chartered Accountants |
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| Registered
Office: |
P.O.L. House, P.O.
Refinery, |
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Morgah, Rawalpindi |
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| Board
of Directors |
Ghaith R. Pharaon |
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Arif Kemal |
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Shahid Ahmad |
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Munir Ahmad |
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Rashid M. Chaudhry |
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Khalid A. Ghazi |
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Shuaib A. Malik |
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Lt. Gen. (R) Talat Masood |
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Babar Bashir Nawaz |
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Laith G. Pharaon |
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M. Salim |
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Abdus Sattar |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the FORTY-SEVENTH Annual General Meeting (being the
Fifty-seventh |
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| General
Meeting) of the Company will be held at Hotel Pearl Continental, Rawalpindi
on Wednesday, |
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| December
30, 1998 at 11:00 A.M. to transact the following business. |
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| 1.
To confirm the minutes of the Forty-sixth Annual General Meeting (being the
Fifty-sixth General |
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| Meeting)
held on December 29, 1997. |
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| 2.
To receive, consider and approve the audited accounts of the Company together
with Directors' |
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| and
Auditors' Reports for the year ended June 30, 1998. |
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| 3.
To declare a final cash dividend of 15% as recommended by the Board of
Directors, in addition |
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| to
15% interim dividend already paid, for the year ended June 30, 1998. |
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| 4.
To appoint auditors for the year ending June 30, 1999 and fix their
remuneration. The present |
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| auditors
Messrs A.F. Ferguson & Co., Chartered Accountants, retire and being
eligible, offer i |
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| themselves
for reappointment.
! |
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| 5.
To transact any other business with the permission of the Chairman. |
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BY ORDER OF THE BOARD |
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| Registered
Office: |
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| POL
House, P.O. Refinery, |
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| Morgah,
Rawalpindi |
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IQBAL A. KHWAJA |
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| December
07, 1998 |
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Company Secretary |
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| NOTES: |
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| PARTICIPATION
IN THE ANNUAL GENERAL MEETING |
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| A
member entitled to attend and vote at this meeting is entitled to appoint
another member as his/her |
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| proxy
to attend and vote. Proxies in order to be effective must be received at the
Registered Office of |
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| the
Company duly stamped and signed not less than 48 hours before the meeting. |
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| CLOSURE
OF SHARE TRANSFER BOOKS |
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| The
share transfer books of the Company will remain closed and no transfer of
shares will be |
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| accepted
for registration from December 18, 1998 to December 30, 1998 (both days
inclusive), |
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| CHANGE
IN ADDRESS |
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| The
members are requested to promptly notify any change in their addresses, |
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| Chairman's
Review of Activities |
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| In
the name of Allah, Most Gracious, Most Merciful |
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| Assalam-o-Alaykum |
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| It gives me great
pleasure to present the review |
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| of operations and
audited financial statements of |
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| your Company for the
year ended June 30, 1998. |
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| BOARD
OF DIRECTORS |
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| During the year under
review Mr. Munir Ahmad |
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| was nominated by the
Government of Pakistan |
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| (GOP) as director in place
of Mr. M. T.K. |
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| Sherwani. Mr. Shahid
Akbar resigned and his |
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| replacement is yet to
be nominated by the GOP. |
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| Mr.
Rashid M. Chaudhry and Mr. Babar Bashir |
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| Nawaz were appointed
alternate directors to |
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| Dr. Ghaith R. Pharaon
and Mr. Laith G. Pharaon |
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| respectively. I
welcome the directors joining the |
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| Board and would like to
place on record |
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| appreciation of the
services of the outgoing |
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| directors. |
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| FINANCIAL RESULTS |
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| Your
Company has earned a profit after tax of |
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| Rs
408 million for the year under review |
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| (1996-97 Rs 569
million). Sales revenue were |
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| Rs
1.846 billion as compared to Rs 1.889 billion |
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| in the last year. |
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| Lower
level of profit is directly attributable to |
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| low
oil prices during the year and decline in |
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| oil production
inspite of a new well (TurkwaI-H1) |
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| coming
on production. Average price achieved |
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| for
POL crude oil was US$15.90 per barrel as |
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| compared
to US$ 19.83 per barrel for last year. |
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| The
Company has contributed Rs 239 million to |
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| the
national exchequer (1996-97: Rs 244 million) |
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| and
effected foreign exchange saving for the |
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| Country
to the tune of US$ 42 million during the |
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| year
(1996-97: US$ 52 million). |
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| PRODUCTION |
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| A
comparison of total production of crude oil and |
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| other
products inclusive of POL's 100% owned |
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| producing
fields and its share from all joint |
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| ventures is given below: |
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|
1997-98 |
1996-97 |
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| Crude oil |
US
barrels |
1,433,061 |
1,476,357 |
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| Gas |
|
Million cubic feet |
6,594 |
6,465 |
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| LGP |
|
Metric
tonnes |
25,770 |
27,792 |
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| Sulphur |
Metric tonnes |
2,096 |
3,137 |
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| Solvent oil |
US
barrels |
61,167 |
22,562 |
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| POL's
OWN PRODUCING FIELDS |
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| POL's
average production from its 100% owned |
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| fields
during report year was 1,464 barrels of oil |
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| per
day (BOPD) and 10 million cubic feet of gas |
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| per
day (MMCFD). As by-products, 38 barrels per |
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| day
(bbls/D) of solvent oil and 31 metric tonnes |
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| per
day of LPG were also produced. The major |
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| share
of production is from Meyal field. |
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| During
the year under review Meyal Mining Lease |
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| was
renewed for a period of 18 years effective |
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| December
23, 1997. New seismic data of 126.8 |
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| line
km was acquired over Meyal and is being |
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| processed.
Workover operations at Meyal-8 were |
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| carried
out and after its successful completion |
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| the
well was put on production averaging about |
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| 50
BOPD and 0.50 MMCFD of gas. |
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| Workover
operations on four wells in Dhulian were |
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| also
carried out. Two wells were successfully |
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| completed
which resulted in enhanced pro- |
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| duction.
At present the field is producing over 70 |
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| BOPD,
4 MMCFD of gas, 10 bbls/D of solvent oil |
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| and
13 metric tonnes per day of LPG. |
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| The
3-D seismic data acquired in Balkassar was |
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| processed
and interpreted but in order to further |
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| delineate
the subsurface structure, the data is |
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| being
reprocessed, using pre-stack migration. |
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| Based
on interpretation results, there are plans |
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| for
drilling of a horizontal well subject to finding a |
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| suitable
location and viable economics. |
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| JOINT
VENTURES (OWN OPERATED) |
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| PRODUCING
FIELDS |
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| Scan
Concession (Pindori Development & |
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| Production
Lease) |
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| Pindori
field averaged 1,566 BOPD, 5.69 MMCFD |
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| of
gas, 333 bbls/D of solvent oil and 20 metric |
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| tonnes
per day of LPG out of which POL's |
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| average
share (35%) was 548 BOPD, 2 MMCFD |
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| of
gas, 117 bbls/D of solvent oil and 7 metric |
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| tonnes
of LPG. |
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| Post-stack
3-D seismic data interpretation was |
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| completed,
the location of Pindori-4 development |
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| well
was finalized and work on site preparation is |
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| in
progress. POL plans to spud the well in the |
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| last
quarter of 1998. Meanwhile 3-D seismic data |
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| is
being reprocessed in order to further detail the |
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| Pindori
structure. |
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| After
laying the pipeline, Pindori LPG plant |
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| commenced
extracting LPG and solvent oil from |
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| the
TurkwaI-H1 well and gas from Oil and Gas |
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| Development
Company Limited's (OGDCL) |
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| Fimkassar
field which was originally being flared. |
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| Ahmadal
Concession (Pariwali Development |
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| &
Production Lease) |
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| Pariwali-2,
a development well was drilled to a |
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| depth
of 16,192 feet and successfully completed |
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| as
gas and condensate producer. The well is |
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| currently
producing 600 BOPD and 5.0 MMCFD |
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| of
gas. Total production from Pariwali field has |
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| now
increased to 1200 BOPD, 11.0 MMCFD of |
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| gas,
26 bbls/D of solvent oil and 29 metric tonnes |
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| per
day of LPG. |
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| The
reprocessing of 3-D seismic data using |
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| pre-stack
migration was completed and its |
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| interpretation
on POL's workstation is in progress. |
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| POL
has82.5% working interest in Pariwali field. |
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| Remaining
17.5% working interest is owned by |
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| Government
Holdings. |
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| Minwal
Concession (Minwal Development & |
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| Production
Lease) |
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| The
Development and Production Lease over |
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| Minwal
discovery area was granted to POL for a |
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| period
of 20 years effective April 1,1998. Minwal |
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| X-1
well remained on production throughout the |
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| year
at an average of 469 BOPD. Exploration |
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| cost
of Rs 163 million has been capitalised in |
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| the
accounts. |
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| POL
has 82.50% working interest in Minwal and |
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| remaining
17.50% working interest is owned by |
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| Government
Holdings. |
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| JOINT
VENTURE (NON OPERATED) |
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| PRODUCING
FIELDS |
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| Dhurnal
(North Potwar Block) |
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| The
workover operations on Dhurnal-4 well were |
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| not
successful and production was obtained from |
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| only
two wells with a declining trend. |
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| The
average production was 1,166 BOPD, 5.53 |
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| MMCFD
of gas and 16 metric tonnes per day |
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| of
LPG. The field is on a continuous steady |
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| decline. |
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| POL
has a 5% interest in this concession which |
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| is
under the operatorship of Orient Petroleum Inc. |
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| (OPI)
(formerly Occidental of Pakistan Inc.). |
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| Bhangali
(Soan Block) |
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| During
the year Bhangali-1 well was workedover |
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| and
put on gas lift in April, 1998. The operator |
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| plans
to convert Bhangali-2 well on gas lift |
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| system
during next year. |
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| Average
production from Bhangali field, operated |
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| by
OPI, was 138 BOPD and 0.17 MMCFD of |
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| gas.
POL has 7% interest in the field. |
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| Ratana |
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| 3-D
seismic data interpretation was completed |
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| during
the year. An in-house simulation study by |
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| the
operator (OPI) was also carried out. The |
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| workover
operations on Ratana-2 well with coil |
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| tubing
were not successful. OPI plans to |
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| workover
Ratana-3 well with coil tubing next year. |
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| There
are also contingent plans to deepen |
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| Ratana-3
well in case workover with coil tubing |
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| is
not successful. |
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| Average
daily production was 198 barrels of |
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| condensate
and 5.82 MMCF of gas. POL has |
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| 4.54%
interest in Ratanafield. |
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| Chak
Naurang |
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| Average
production of 862 BOPD was achieved |
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| from
Chak Naurang field operated by OGDCL |
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| during
the year. POL has 15% share in this field. |
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| East
Badin Ext. Block-B: |
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| Sara
Development and Production Lease |
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| A
Development and Production Lease was |
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| granted
to Tullow Pakistan (Developments) |
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| Limited
(Tullow) over Sara field and the Lease |
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| Deed
is under execution. Negotiations with |
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| Water
and Power Development Authority |
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| (WAPDA)
for gas sales agreement continued |
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| during
the year. The operator (Tullow) is also |
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|
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| looking
for alternative outlet for Sara gas in case |
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| an
agreement with WAPDA is not concluded. |
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| After
assessing future commercial viability |
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| exploration
cost of Rs 100 million has been |
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| capitalised
in the current year accounts. |
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| Suri
Discovery Area |
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| During
the year under review Tullow also |
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| successfully
tested gas in three zones at Suri-1 |
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| exploratory
well and has applied for one year |
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| renewal
of the licence over Suri discovery area. |
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| Tullow
plans to put Suri-1 on extended produc- |
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|
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| tion
test during 1999 to appraise the discovery. |
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| POL
has 22.97% interest during exploration |
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| and
14.54% interest in the development and |
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| production
phase. |
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| EXPLORATION
& DEVELOPMENT |
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| Your
Company continued exploration activities |
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| throughout
the year under review. A summary of |
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|
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| each
area is highlighted below: |
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| Ahmadal
Concession |
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| A
deep exploratory well Khudadad-1 was drilled |
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| to
a depth of 16,979 feet but due to subsurface |
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| structural
complexity the Eocene objective could |
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| not
be encountered. The well was temporarily |
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|
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| abandoned
and the area was surrendered. |
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| Khudadad
Concession |
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| In
order to further test the Khudadad prospect, |
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| POL
applied for Exploration Licence over |
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| Khudadad
and adjoining area. After bidding, |
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| Khudadad
Concession was granted to POL |
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| on
April 28, 1998. POL acquired 50 line km of |
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| new
seismic data over Khudadad structure and |
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| based
on seismic interpretation Khudadad-1 was |
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| re-entered
on August 10, 1998 and deepened |
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| to
it's final total depth of 17,608 feet into the |
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| Sakesar
formation of Eocene age on September |
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| 26,
1998. Subsequently wire-line logging was |
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| completed.
The well was tested below 7" casing |
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| shoe
at17,218 feet and further tests are planned. |
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| POL
has 95% working interest in this con- |
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| cession
and carries 5% working interest of |
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| Government
Holdings during the exploration |
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| phase. |
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| Central
Potwar Concession |
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| At
Turkwal-H1 a lateral horizontal hole was drilled |
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| to
a depth of 11,150 feet. The well tested oil and |
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| gas
in commercial quantities. After laying gas |
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| pipeline
to Pindori in January 1998, the well was |
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| put
on regular production with an average of |
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| 1,400
BOPD, 1.98 MMCFD of gas, 12 bbls/D of |
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| solvent
oil and 8 metric tonnes per day of LPG. |
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| In
order to delineate further prospects in the |
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| concession
a total of 160.60 line km of seismic |
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| data
was acquired, processed and interpreted. |
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| An
exploratory well, Turkwal Deep-1 was |
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| spudded
in May, 1998 to test up-thrust as well as |
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| sub-thrust
plate. Drilling is in progress at this well. |
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| If
successful, POL would drill another exploratory |
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| well
back to back for which location has been |
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| finalized. |
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|
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|
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| POL
has assigned 15% working interest to Attock |
|
| Oil
Company Limited and further 2.5% to |
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| Government
Holdings effective August 15, 1997. |
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|
|
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| POL
now has 80% working interest during |
|
| exploration
phase in this block and carries 4.21% |
|
| working
interest of Government Holdings during |
|
| the
exploration phase, POL has a 67.37% |
|
| interest
in the production phase which is at present |
|
| applicable
to Turkwal-H1. |
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|
|
|
| Southern
Sind Concession |
|
| During
the year 278 line km of seismic data was |
|
| acquired.
Processing of the data is in progress. |
|
|
|
|
| POL
has 95% interest in this block and is |
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|
|
| carrying
5% working interest of Government |
|
|
|
| Holdings
during the exploration phase. |
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|
|
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|
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|
| Cholistan
Concession |
|
|
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| After
signing the Concession Agreement on |
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| October
18, 1997, POL reprocessed 531 line km |
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| of
selected vintage seismic data using pre-stack |
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| migration.
In house interpretation of the processed |
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| data
to detail a drillable prospect is in progress. |
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| POL
has 95% working interest in this block and |
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| will
carry 5% working interest of Government |
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| Holdings
during the exploration phase. |
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| POLGAS
OPERATIONS |
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| Net
profit from the sale of LPG in domestic |
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| cylinders
amounted to Rs 69 million for the year |
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| under
review (1996-97: Rs 63 million). |
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| SUBSIDIARIES |
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| Attock
Chemicals (Private) Limited (ACL) |
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| Your
subsidiary earned profit before tax of |
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| Rs
4.2 million during the year (1996-97: Rs 8.2 |
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| million).
The d |
