YEAR BOOK 2004-2005

GOVERNMENT OF PAKISTAN MINISTRY OF PETROLEUM

& NATURAL RESOURCES

ISLAMABAD

Table of Contents Chapter 1: General

1.1 Introduction1.2 Mission Statement 1.3 Functions of the Ministry 1.4 Organization of the Ministry 1.5 Website of the Ministry 1.6 Prime Minister�s Directive � Goals and Targets 1.7 Privatization of National Refinery Limited

Chapter 2: Activities, Achievements and Progress during FY 2003-04 2.1 Development Wing - Ministry 2.2 Mineral Wing - Ministry 2.3 Policy Wing - Ministry 2.3.1 Directorate General of Petroleum Concession

2.3.2 Directorate General of Oil 2.3.3 Directorate General of Gas

Chapter 3: Attached Department

Geological Survey of Pakistan Chapter 4: Autonomous Body

Hydrocarbon Development Institute of Pakistan Chapter 5: Companies

5.1 Oil and Gas Development Company Limited. 5.2 Sui Northern Gas Pipeline Limited. 5.3 Sui Southern Gas Company Limited. 5.4 Pakistan State Oil Company Limited. 5.5 Pakistan Petroleum Limited. 5.6 Pak Arab Refinery Company Limited. 5.7 Saindak Metal Limited. 5.8 Lakhra Coal Development Company. 5.9 Government Holding (Pvt) Limited. 5.10 Pakistan Mineral Development Corporation (Pvt) Limited. 5.11 Inter State Gas Systems (Pvt) Limited.

Annexure

I Organizational Chart of the MinistryII Public Sector Organizations under the MinistryIII Sanctioned Strength of the MinistryIV Prime Minister�s directives - Goals/Targets set for FY 2005-06

List of Acronyms

PREFACE This report has been prepared in pursuance of Sub Rule (2) of Rule 25 of the Rules of

Business 1973 which provides that at the beginning of each financial year, each Division

shall, for the information of the Cabinet and information of general public prepare as a

permanent record, a Book which shall contain:

a. the detail of its activities, achievements and progress during the

preceding financial year giving only the unclassified information which can be used for reference purposes;

b. the programme of activities and targets set out for the Ministry for the

preceding financial year and the extent to which they have been realized; and

c. the relevant statistics properly tabulated.

The report shows the activities, achievements and progress of the Ministry of Petroleum

and Natural Resources, its attached department and organizations/companies under its

administrative control, during FY 2004-05. Goals and Targets approved by the Prime

Minister of Pakistan for FY 2005-06 have also been included in the report.

I hope that this book will serve as a useful reference document.

Islamabad: September 29, 2005 (Ahmad Waqar) Secretary

CHAPTER 1

GENERAL

1.1 INTRODUCTION

Ministry of Petroleum and Natural Resources was created in April 1977. Prior to that, the subjects of Petroleum and Natural Resources were part of the Ministry of Fuel, Power and Natural Resources. 1.2 MISSION STATEMENT

To ensure availability and security of sustainable supply of oil and gas for economic development and strategic requirements of the country and to coordinate development of natural resources of energy and minerals, in order to cater for energy needs of the people of Pakistan. 1.2.1 STRATEGY TO ACHIEVE MISSION

i. To adopt an integrated approach for promoting exploration and fast track development of oil, gas and mineral resources.

ii. To deregulate, liberalize and privatize oil, gas and mineral sectors

through structural reforms.

iii. To attract private investment and to establish credible institutions for facilitating the development of petroleum and mineral sectors.

iv. To develop technical and professional human resource.

v. To optimize existing energy delivery infrastructure (oil/gas

pipelines).

vi. To substitute imported fuel oil with indigenous gas by optimally balancing the gas availability and supplies from local and imported sources.

1.3 FUNCTIONS OF THE MINISTRY

The Ministry is responsible for dealing with all matters relating to petroleum, gas and mineral. Its detailed functions as per the Rules of Business are as under: i. All matters relating to oil, gas and minerals at the national and international levels, including:

a. Policy legislation, planning regarding exploration, development and production;

b. Import, export, refining distribution, transportation. Prices are deregulated now and reviewed by OCAC of all kinds of petroleum and petroleum products;

c. Matters bearing on international aspects; d. Federal agencies and institutions for promotion of special

studies and development programms. ii. Geological Surveys

iii. a. Administration of Regulation of Mines and oil fields and Mineral Development (Federal control) Act, 1948, and rules made there under, in so far as the same relate to exploration and production of petroleum, transmission, distribution of natural gas and liquefied petroleum gas, refining and marketing of oil;

b. Petroleum concessions agreements for land, off-shore and deep sea areas;

c. Import of Machinery, equipment, etc; for exploration and development of oil and natural gas.

iv. a. Administration of Marketing of Petroleum Products (Federal Control) Act 1974 and the rules made there-under;

b. Matters relating to Federal investments and undertakings wholly or partly owned by the Government in the field of oil, gas and minerals, excepting those assigned to the Industries and Production Division.

v. a. Administration of; b. The Petroleum Products (Development Surcharges) Ordinance,

1961, and the rules made there-under; and c. The ESSO Undertakings (Vesting) Ordinance, 1976. vi. a. Coordination of energy policy, including measures for conservation

of energy and energy statistics; b. Secretariat of National Energy Policy Committee.

1.4 ORGANIZATION OF THE MINISTRY

To perform its functions, the Ministry of Petroleum & Natural Resources has been organized into four wings i.e. Administration, Development, Mineral and Policy. The Ministry has one Attached Department, one Autonomous Body and 11 companies. The Secretary is assisted by an Additional Secretary, two Joint Secretaries, one Chief Accounts Officer and five Director Generals. Organizational chart of the Ministry and its public sector organizations are placed at Annexure-I and II while the staff strength of the Ministry is at Annex-III. 1.4.1 ADMINISTRATION WING

Administration Wing consists of a Joint Secretary, two Deputy Secretaries and six Section Officers along with the supporting staff. The Wing is responsible for the following functions:

i. Personnel and General Administration of the Ministry (Secretariat). All matters relating to Administration of the Policy Wing, Oil and Gas companies, Geological Survey of Pakistan (GSP), Pakistan Mineral

Development Corporation and Hydrocarbon Development Institute of Pakistan.

ii. Corporate affairs of oil and gas companies. iii. All matters relating to technical assistance, tours and training. iv. Coordination work of the Ministry and its attached departments,

organizations with other ministries. v. Processing of non-development budget of the Ministry its attached

department vi. All matters relating to web site and networking of the Ministry.

vii. Coordination work related to P&NR committee on defence planning. 1.4.2 CHIEF AUDIT OFFICER The Department of Auditor General of Pakistan has assigned the services of a senior officer of BS-20 to Ministry of Petroleum and Natural Resources designated as Chief Audit officer to perform the following assignments:- i. Internal Control / Internal Audit. ii. Reconciliation of Accounts. iii. Departmental Accounts Committees. iv. Public Accounts Committee (Monitoring & Coordination with Public Accounts Committee (PAC).

1.4.3 DEVELOPMENT WING

This wing comprises of one Joint Secretary, two Deputy Secretaries and four Section Officers along with the complementary staff. Development Wing is responsible for all matters other than admin and personnel management of Policy Wing, GSP, GHPL, OGDCL, SNGPL, SSGCL, ISGCL, HDIP, PARCO and PSO, Oil and Gas infrastructure processing/approval and monitoring of development schemes; foreign aid/loan and coordination with World Bank, ADB, CIDA, IDB, JICA; Joint Ministerial Commissions, ECO & bilateral relations; Preparation of Development Budget (PSDP), long term plans, Economic Survey & Budget speeches; All policy matters, ECNEC, ECC, CCOI, CCOP, Cabinet and implementation of decisions; and Foreign investment, privatization, import of natural gas projects.

1.4.4 MINERAL WING

This Wing has one Director General, two Directors and two Deputy

Directors along with their complementary staff. The Wing is responsible for all development schemes of Geological Survey of Pakistan (GSP), Pakistan Mineral Development Corporation (PMDC), Saindak Metals Limited (SML) and Lakhra Coal Development Company (LCDC) and Thar Coal Development Project in co-ordination with Provincial Government concerned.

1.4.5 POLICY WING The Policy Wing is comprised of (i) Directorate General of Petroleum

Concessions (ii) Directorate General of Oil (iii) Directorate General of Gas and (iv) Directorate General of Admn /Special Projects. Each Directorate is headed by a Director General. The Policy Wing is responsible for developing policies for oil and gas sectors, forecasting future requirement and assessing the impact of existing policies, rules and regulations.

1.4.6 ATTACHED DEPARTMENT, AUTONOMOUS ORGANIZATION, CORPORATIONS AND COMPANIES OF THE MINISTRY

The Ministry has one attached department i.e. Geological Survey of

Pakistan (GSP) and following organizations / companies under its administrative control:

i Hydrocarbon Development Institute of Pakistan (HDIP) ii Oil and Gas Development Company Limited (OGDCL)

iii Sui Northern Gas Pipeline Limited (SNGPL) iv Sui Southern Gas Company Limited (SSGCL) v Pakistan State Oil Company Limited (PSOCL)

vi Pakistan Petroleum Limited (PPL) vii Pak Arab Refinery Company Limited (PARCO)

viii Saindak Metal Limited (SML) ix Lakhra Coal Development Company (LCDC) x Government Holding (Pvt) Limited (GHPL)

xi Pakistan Mineral Development Corporation (Pvt) Limited (PMDC) xii Inter State Gas Systems (Pvt) Limited (ISGSL)

1.5 WEBSITE OF THE MINISTRY

The Ministry has restructured and is regularly updating its website www.mpnr.gov.pk on the basis of feed back received from different stake holders. 1.6 PRIME MINISTER�S DIRECTIVE�GOALS AND TARGETS In pursuance of the Prime Minsiter�s directive, the Ministry of Petroleum and Natural Resources has worked out Goals and rolling plans with quarterly targets since FY 2004-05, and it is producing quantifiable and tangible results in the Petroleum Energy Sector. During the last three quarters of FY 2004-05, 47 out of 64 preset targets have been achieved successfully. Besides on the rolling plan, the Ministry�s working has been activated and energized for establishing a culture of good governance, transparency and accountability. The Prime Minsiter�s Secretariat monitors the progress regularly. Rolling plan with time line achievement of the 25 goals and 94 targets set for the FY 2005-06 is at Annexure-IV.

1.7 PRIVATISATION OF NATIONAL REFINERY LIMITED National Refinery Limited (NRL), a listed Public Company under Ministry of Petroleum and Natural Resources was privatised through sale of 51% of its shares numbering 33,985,788 along with transfer of management control. The bidding was held on 31st May, 2005. The highest bid was given by the consortium consisting of Attock Refinery Limited, Pakistan Oil Fields Limited and Attock Petroleum limited, for Rs.483 per share. The sale price thus worked out was Rs.16.415 billion.

CHAPTER 2

ACTIVITIES, ACHIEVEMENTS AND PROGRESS DURING THE YEAR 2004-05

2.1 DEVELOPMENT WING - MINISTRY

2.1.1 LIBERALIZATION OF OIL AND GAS SECTOR

i The public sector oil and gas entities have been made independent. The Board of Directors of these companies have been given complete autonomy to operate on commercial lines without interference. As a result, the performance of the companies has improved significantly.

ii Imports of fuel oil and HSD have been deregulated.

iii Freight pool (about Rs. 15 billion) is being phased out. Furnace

Oil has been removed from freight pool. Freight equalization of Petrol/HSD has been limited to 29 depots. This has resulted in benefits to the economy to the tune of Rs. 6.0 billion per annum.

iv Refinery Pricing Formula has been rationalized and linked with

actual import cost. This will provide incentives for up-gradation/expansion of existing refineries.

v The prices and allocation of LPG have also been deregulated. With

these incentives the production of LPG has almost doubled to 1000 tons/ per day and is expected to be tripled with the commissioning of Jamshoro plant and Boby, Chanda fields.

vi Consumer prices of Furnace Oil and White Oil products have been

linked to the international prices which are adjusted on fortnightly basis. The impact of oil pricing reforms has resulted in a benefit to the economy to the extent of Rs. 15 billion approximately. This provides immediate benefit to public when international oil prices fall. In the past, almost Rs. 66 billion (1997-1998/1998-1999) was over recovered from the public.

vii Consumer prices of gas are being reviewed bi-annually on the

basis of cost of supply. This will improve the confidence of foreign oil and gas producers and protect the gas utilities.

viii Subsidy given to domestic sector gas consumers is being

withdrawn over a period of three years. However, it has been ensured that a fixed 40% subsidy (monthly consumption below 1900 cubic meter) will remain available to low income group who consume 50% of the total domestic sector gas. In this way, 40% of the 3.5 million consumers would not be affected by this change.

ix The Gas Purchase Agreement with Pakistan Petroleum Limited is being replaced with a market based formula which will be achieved under a phased programme over a 5 year period. This pricing adjustment will eventually benefit the economy to the tune of about Rs. 20 billion.

x The overall reform process in the oil and gas sector has so far

benefited the country�s economy to an extent of Rs. 25 billion. 2.1.2 EXPLORATION AND PRODUCTION (E&P) SECTOR REFORM

i Onshore and offshore policies were announced in May, 2001 and an incentive package was given to attract foreign investment in the upstream sector. The seismic surveys in offshore areas indicate tremendous potential of oil and gas. As a result, many multi national companies have shown interest in exploration in the offshore areas.

ii OGDCL has for the first time in Pakistan�s history made an oil

discovery in the NWFP Province. MOL, a Hungarian Exploration company, has also made a major discovery at Gurgry district Kohat N.W.F.P.

iii Due to pragmatic policies of the present government, since issued

in October, 1999 there have been investment commitments of around US $ 1 billion.

2.1.3 PRIVATIZATION OF PUBLIC SECTOR ENTITIES

i. GOP has decided in principle to privatize PSOCL, OGDCL, PPL, SNGPL and SSGCL. Government has also divested its minority shareholding in seven oil fields.

2.1.4 GAS DEVELOPMENT PLAN

i. One BCFD additional gas from new fields (Miano, Zamzama, Sawan, Bhit, Sui Deep, Hasna, Badin II) has been brought on stream through the Gas Infrastructure Development projects undertaken by SNGPL and SSGCL.

ii. The thrust of government�s policy is to replace furnace oil with gas

in power generation with anticipated savings of US $ 600-700 million annually.

2.1.5 ENVIRONMENTAL REFORMS

i Being a clean fuel Natural Gas share in energy mix is being increased to replace imported fuel.

ii LPG supply as an alternate fuel is being encouraged to protect the environment and to conserve fuel wood resources.

iii CNG is being encouraged in transport sector to improve urban

ambient air quality and reduce carbon emissions. About 550 CNG stations are in operation and over 500,000 cars have been converted to CNG making Pakistan third largest CNG consumer in the world after Argentina and Italy. Efforts are also being made to replace diesel with CNG.

iv Lead-free gasoline has been introduced w.e.f. 1-7-2001 to improve

the air quality well in advance of the date set by environmental and donor agencies. Attock Refinery has started producing unleaded gasoline w.e.f. 1-7-2002.

2.1.6 REGULATORY REFORMS

i Oil and Gas Regulatory Authority (OGRA) Ordinance has been promulgated. OGRA will regulate the entire oil and gas sector except for the award of petroleum concessions.

ii Government Holdings Company Limited has been established to

manage the Government�s investments in the upstream sector. 2.1.7 REGIONAL GAS PIPELINES

i. Ministry of Petroleum and Natural Resources after assessing future demand/supply, concluded that indigenious gas reserves of the country will not be sufficient to meet the increasing demand beyond 2010. The Ministry therefore is exploring the possibility to import gas from the neighbouring countries that is Iran, Qatar, and Turkministran and is working on all three options.

2.1.8 GAS IMPORT PROJECTS

i The Ministry of Petroleum and Natural Resources has been pursuing the import of gas through pipeline and LNG projects from the neighbouring region that is Iran, Turkmenistan and Qatar. These projects are being actively discussed at different level Working Groups/Committees constituted from time to time.

ii In the last one year two meetings of Pakistan-Iran Working Group and two meetings of Pakistan-India Joint Working Group have been held on Iran-Pakistan-India (IPI) gas pipeline project.

iii Similarly, 8th Steering Committee meeting of Turkmenistan-Afghanistan-Pakistan (TAP) Gas Pipeline Project was held in April, 2005 in Islamabad and 9th meeting is being scheduled in the 3rd/ 4th Quarter of October, 2005 in Ashgabat.

iv 1st meeting of the Technical Working Committee of MPNR and Qatar Petroleum on GUSA gas pipeline project has been held in June, 2005 in Doha, Qatar and 2nd meeting of the committee is being scheduled during the last week of September, 2005 in Islamabad.

v Ministry has successfully completed Comparative Evaluation of

the Gas Import Projects by appointing a consultant through Asian Development Bank (ADB) to prioritize the available gas import options.

vi In order to ensure safe and secure world class pipeline and LNG

import projects, MPNR has already appointed a Financial Advisor for LNG import and for transborder pipeline project, a separate Financial Advisory Consortium is likely to be appointed, shortly.

2.2 MINERAL WING - MINISTRY The geological survey to discover mineral is a federal function under the Constitution of Pakistan, while Regulatory Regime for solid mineral falls under provincial domain. The geology of Pakistan is interesting and has all the environments for hosting world-class metallic mineral deposits. Mineral exploration is high risk capital investment therefore, govt. decline to invest public funds in commercial mineral projects and companies for generation of basic geological data. For commercial exploitation of mineral deposits efforts are made by developing countries to secure international investment offering pragmatic and investment friendly mineral policies. GOP therefore, endeavored to ensure implementation of National Mineral Policy (NMP) 1995 formulated with the consensus of all the provinces. 2.2.1 IMPLEMENTATION OF NATIONAL MINERAL POLICY

The provinces have been pursued to the implementation of National Mineral Policy in its true spirit, To facilitate inflow of FDI, lucrative fiscal incentives have been offered. On the initiation of the Ministry, CBR has exempted all the machinery and equipments imported for Mineral projects in exploration stage from all type of taxes including sale tax. CBR has levied 5% custom duty on import of machinery and equipments, however deferred for a period of three years during construction stage.

2.2.2 STRATEGY ON DEVELOPMENT & EXPLOITATION OF GEMSTONES

Pakistan has sufficient gemstone potential that could become a substantial source of foreign exchange earnings. To promote the gemstone industry a strategy was approved by Chief Executive/President of Pakistan. Adhering to the recommendation of the Strategy projects worth Rs.100 million were approved for imparting training to locals of gem bearing areas of NWFP, AJK and Northern Areas in flawless mining. During the fiscal year work on

implementation remained in progress. In AJ&K 73 inhabitants had been reported to be trained in surface and underground mining of semi precious stone. On another project 50 persons have been trained in scientific mining and processing of Ruby, by AK Mineral Development Corporation. In NWFP under such on-going schemes staff for the project has been appointed, reconnaissance field studies have been conducted, office accommodation/fields camps have been established in Saidu Sharif Distt. Swat & Chitral. Under another such scheme in Hazara Division staff has been recruited and office accommodation has been acquired at Mansehra and Kohistan Distt. Trainees have been registered. To impart training to locals of gem-bearing areas of AJ&K and Northern Areas in gemstone cutting and polishing on scientific lines this Ministry is executing a project aiming to establish two training centers at Muzaffarabad and Gilgit. The project is under execution with active participation from Govt. of AJ&K and Northern Areas Administration.

2.2.3 OPTIMUM UTILIZATION OF INDIGENOUS COAL RESOURCES OF THE COUNTRY

Government of Pakistan is endeavoring to minimize import of crude oil and explore alternative sources of energy. Latest technology advances have made coal as clean and environment friendly source of energy. Ministry of Petroleum & NR is exploring the possibility of substitution of furnace oil with indigenous coal particularly in processing industry. This Ministry has launched a project (feasibility study) to ascertain suitability of Thar coal for gasification and extraction of petrochemicals. The study will be conducted through international consultant. For selection of consultant two international firms/consortium have been pre-qualified who have coal gasification as proprietary technology. For commissioning of Town Gas a Coal Gasification Plant at Bhakar, province of Punjab, Mineral Wing is coordinating/facilitating Sui Northern Gas Pipelines Limited (SNGPL) also.

2.2.4 MINERAL DEVELOPMENT INITIATIVES

i. Ministry has endeavored to secure international assistance in following areas for the development of Mineral Sector:-

a. Capacity building � Institutional Strengthening. b. Generation of basic geological data c. Development of Small Scale Mining (SSM) in

gemstones/coal. d. Development of exploration targets into investment

opportunities.

Preliminary details of assistance have been worked out by World Bank experts in consultation with provinces and other stake holders.

ii. The Prime Minister of Pakistan directed this Ministry to update the study for commissioning of steel mill at Kalabagh iron ore, originally prepared in 1967. CDWP in a meeting held on 01.02.2005

approved the �Feasibility study for development & exploitation of Chechali iron ore and commissioning of steel mill at kalabagh� district Mianwali, Punjab. The overall objective of the study, to undertake by means of a Consultancy Agreement, is updating previously prepared mining feasibility study, identification of metallurgical process for making iron and steel from Chichali iron ore; being low grade and under taking Bankable Feasibility Study of commissioning of a Steel Plant at a suitable place close to the iron ore deposit.

2.2.5 INTERNATIOANL INVESTMENT IN MINERAL SECTOR 2.2.5.1 Saindak Metals Ltd

Saindak Copper Gold Project has been leased out to MCC of China. The Chinese company has employed 1100 locals and has produced/exported 15373.47 million tones of blister copper; having 1.5 tons gold and 2.07 tones silver worth US $ 65 million during 2004-05. Keeping in view the better metal prices in international market, the Chinese company has entered into an agreement to enhance the production from 30 to 40% The company contemplates to start exploration activities to prove more ore reserves to justify expansion.

2.2.5.2 Reko Dek Copper-Gold Project Balochistan

Tethyan Copper Company Limited (TCCL) of Australia has finalized its plan to develop a mine at a cost of US$ 200 million to produce 40,000 tones of copper annually on indicated reserves of 167 million tones (H4 Starter Project) at Reko-Dek area in District Chagai Balochistan. TCC has invested Aus$14.87 million ( Rs 684.02 million) in allocated leases, drilled 3051 meters and did magnetic survey on 60,384 Km line in 4 allocated leases in district Chagai.

2.2.5.3 Duddar Lead Zinc Project

A Lead-Zinc deposit with estimated reserves of 14.31 million tones at Duddar in Balochistan were discovered jointly by PMDC and UNDP containing 8.6% zinc and 3.2% lead. M/s MCC, of China has signed an agreement with PMDC to invest US$ 72 million to start mining and establishment of a zinc/lead concentrator plant at Duddar. As a result of constant persuasion by this Ministry, Govt. of Balochistan has started construction of 100 Km. all weather road for the project. The company has commenced drilling programme in project and construction of accommodation for the staff etc. is in progress. The Project is expected to provide direct jobs to about 500 Pakistanis besides an income of US$ 35 million annually for the country.

2.2.5.4 Thar Coal Project- Sindh Province

To harness the huge coal resources of Thar, Sindh province Chinese company M/s Shenhua had prepared feasibility study to commission 600 MW power generation plant on one of evaluated coal blocks, its capacity will be enhanced to 3000 MW in phased manner. On the request of Chinese company GOP has developed infrastructure according to the requirement of M/s Shenhua costing Rs 3 billion. This project would provide job opportunities to thousands of peoples, directly and indirectly. On commissioning of power generation plants the revenue of provincial and Federal Govt. will substantially enhance beside development of area. Thar coalfield infrastructure development has been completed which include improvement / construction of roads, potable water supply, supply of power and telephone lines etc. Negotiations are underway between WAPDA & Shenhua to finalize the power tariff. M/s Rheinbraun Engineering of Germany, has completed bankable feasibility study on another evaluated block of Thar coalfield. This block has been assigned to an American company M/s AES for commissioning of 1000 MW capacity coal fired power plant.

2.2.6 SIGNIFICANT MINERAL POTENTIAL

i. 185 billion tonnes coal resource in the Sindh Province. ii. Un-exhaustible reserves of hard (granite-basalt) and soft (marble)

dimensional stones of different shades and colour in all the provinces.

iii. Un- exhaustible reserves of rock salt in Punjab,. iv. Large deposits of low grade iron ore at Kalabagh (Punjab)

Nokundi and Dilband (Balochistan). v. Large gemstone potential

vi. Chemical grade limestone, gypsum and clays. vii. Metallic minerals; Copper & Gold in Balochistan.

viii. Well defined mettalogenic zones

2.2.6.1 Fiscal Incentives

i. Fiscal terms to ensure a good return to the investor, commensurate with the risk and internationally competitive.

ii. The fiscal regime, including royalty is structured to have a progressive character.

2.2.6.2 Development Expenditure Deduction & Loss Carry Forward

i. Expenditure incurred for project development operations will be allowed deduction at a rate of 25% per annum.

2.2.6.3 Concessions on Imports

i. Exploration phase ii. Full exemption of duty and taxes on import of machinery

and equipment. 2.2.6.3 Mine development phase

Levy of only 5% duty on import of machinery and equipment, exemption of 15% sales tax. Deferment of duty also available for a period of 3 years on payment of 6% per annum interest on payables.

2.2.6.4 Extraction/Commercial Production phase

i. 5% custom duty is leviable on import of machinery and exemption from whole of sale tax with certain specific condition.

ii. For all other minerals, a simplified and uniform royalty system in all the Provinces.

iii. Royalty is charged ad-valoram on the gross sales value determined on a third party (arms-length) basis.

The rates of royalties are: a Precious Stones 10% b Precious Metals and Semi- Precious Stones 3%

c. Base Metals 2% d. Others (other than a,b,c above) 1%

2.2.7 INVESTMENT OPPORTUNITIES IN MINERAL SECTOR

i. Mining and establishment of rock salt based chemical industries; ii. Mining/cutting and polishing of hard/soft dimension stones

(granite, marble, limestone); iii. Commissioning of coal washing plants for upgradation of

indigenous coal for processing industry; iv. Commissioning of Fullers Earth plant from Bentonite deposit. v. Utilization of low-grade iron ores for commissioning Steel Mill;

vi. Coal based power generation projects. vii. Lapidary industry.

2.3 POLICY WING � MINISTRY 2.3.1 DIRECTORATE GENERAL OF PETROLEUM CONCESSIONS 2.3.1.1 Concession Activities a Exploration Licences

One hundred and eighteen applications for grant of Exploration Licences were processed during 2004-05 which included eighty eight applications received during the year. Eight bidding rounds were held in which thirty nine blocks were offered. As a result twenty three Exploration Licences covering an area of 42,087.63 sq. kms. were granted. There are seventy two Exploration Licences covering an area of 160,662.92 sq. kms as on 30-06-2005. During this period, around 11,824.45 sq. kms. area of three Exploration Licences remained under Force Majeure, while an area of 22,521.37 sq. kms. covering eight Exploration Licences was surrendered/relinquished by different operators. In all twenty one companies remained active in Pakistan as operator of Exploration Licences, Mining/D&P Leases.

In Sindh Province 39,243.90 Sq. Kms, Punjab 23,512.77 Sq. Kms, Balochistan 56,070.18 Sq. Kms and NWFP 8,682.79 Sq. kms, Indus Offshore 22,348.43 Sq. Kms and Makran Offshore 10,804.85 Sq. Kms area is under exploration.

b. Mining/Development & Production Leases

Six Development and Production Leases were granted during the year 2004-2005. Two applications for grant of D &P leases over Naimat Basal (OPI) and Low BTU Kandra (PEL) fields were pending at the end of fiscal year. A total of one hundred & sixteen leases covering an area of 11,228.84 sq. kms. were valid by the end of the year. In Sindh Province 8,004.07 Sq. Kms, Punjab 1,963.20 Sq. Kms, Balochistan 1,176.57 Sq. Kms and NWFP 85 Sq. kms area was under Mining/D &P Leases.

Table � 2.1

Exploration Licences Granted during 2004- 05

S.No. Block Location O perator Grant date Area (sq.

kms)1 2367-4 (Indus Delta A) Offshore OGDCL 23-10-2004 2,499.01 2 2970-3 (Sakhi Sarwar) Punjab OPI 09-12-2004 2,124.773 2968-3 (Kohlu) Balochistan OGDCL 29-12-2004 2,459.114 2969-7(Kalchas) Balochistan/Punjab OGDCL 29-12-2004 2,068.325 3072-2 (Bagh) Punjab OGDCL 29-12-2004 1,036.516 2763-2 (Shahana) Balochistan OGDCL 29-12-2004 2,445.007 2971-3 (Multan South) Punjab OGDCL 11-02-2005 2,480.788 3071-3 (Multan North) Punjab OGDCL 11-02-2005 2,498.979 2366-4 (Offshore Indus M Offshore Eni 25-02-2005 2,495.17

10 2366-5 (Offshore Indus N)Offshore Eni 25-02-2005 2,498.28

11 2568-15 (Tajpur) Sindh PPL 22-03-2005 112.36

12 2866-2 (Kalat) Balochistan PPL 22-03-2005 2,482.14

13 3271-1 (Karak) NWFP/Punjab MGCL 14-04-2005 2,335.18

14 2971-4 (Noor) Punjab MGCL 14-04-2005 2,484.13

15 3066-1 (Huramzai) Balochistan Nativus 27-04-2005 2,262.27

16 2763-1 (Ladgasht) Balochistan Nativus 27-04-2005 2,459.88

17 3067-2 (Changai) Balochistan RDC 27-04-2005 545.18

18 2567-5 (Jhangara) Sindh Premier Oil 27-04-2005 357.19

19 3371-10 (Kohat) NWFP T ullow 27-04-2005 1,107.21

20 3370-13 (Bannu West) NWFP T ullow 27-04-2005 1,229.57

21 2667-7 (Kirthar) Sindh/Balochistan POGC 18-05-2005 956.22

22 3272-12 (Karsal) Punjab PEL 03-06-2005 724.42

23 2768-10 (New Larkana) Sindh/Balochistan PEL 03-06-2005 2,425.96 Grand total 42,087.63

Table -2.2

DEVELOPMENT & PRODUCTION LEASES GRANTED DURING 2004-05 S.No. Block Location Operator Grant date Area (sq. kms)

1 Umar Sindh OPI 14-10-2004 8.82 2 Tando Allah Yar Sindh OGDCL 24-01-2005 3.35 3 Dars Sindh OGDCL 24-01-2005 6.02 4 Dars West Sindh OGDCL 24-01-2005 5.20 5 Ali Zaur Sindh BP 07-04-2005 6.23 6 Fateh Shah North Sindh BP 06-06-2005 23.81

Grand total 53.43

2.3.1.2 Seismic Activities

Seismic activities during 2004-05 were as following;

i. 2D seismic acquisition (onshore) 3615.27 L.Kms. ii. 3D seismic aacqusition (onshore) 2430.37 Sq. Kms.

iii. 2D seismic acquisition (offshore) Nil. iv. 3D seismic acquisition (offshore) Nil. v. No. of service companies 05

vi. No. of active crews 12 vii. Types of acquisitions Dynamite, Vibroseis

Operator wise seismic acquisition during 2004-05 is as under;

Table - 2.3

Eni MOL Nativus OMV OGDCL OPI Petronas POL PPL Tullow

2D (L.Kms)

110 145 58 323 1,665 396 179 163 334 244

3D (Sq.Kms)

453 555 758 544 121

2.3.1.3 Drilling Activities

In 2004-05 fifty four wells were planned including twenty two exploratory wells and thirty two appraisal/development wells. Against the target of fifty four wells, total forty seven wells were spuded i.e. nineteen exploratory and twenty eight appraisal/development wells. In the Public Sector, OGDCL spuded eight exploratory and eleven appraisal/development wells, whereas in Private Sector twenty eight wells were drilled which included eleven exploratory and seventeen appraisal/ development wells. In the last fiscal year 2003-04, 53 wells were drilled, 29 exploratory and 24 App./Development. Average 132 meters per day in exploratory wells and 167 meters per day in App./Development wells were drilled during the fiscal year.

2.3.1.4 Discoveries

During fiscal year 2004-05 there were twelve oil and gas discoveries in the country namely Ali-1, Dars west-1,Fatehshah North-1,Bilal North-1, Jhalmagsi South-1, Makori-1,Pasakhi Deep-1, Dewan-1,Mari SML-1, Chak63 Southeast-1, Haseeb-1 and Bilal-1.

2.3.1.5 Production Activities

In 2004-2005 oil production in the country remained on average basis 66,079 BOPD and gas production was 3,685 MMCFD OGDCL was the highest oil producing company with a production of 11.443 million barrels at an average rate of 31,350 BOPD which was 47% of the yearly oil production of the country, followed by BP producing 6.049 million barrels at an average of 16,572 BOPD, as a 25% of the total oil production. POL produced 3.766 million barrels, PPL 1.329 million barrels, OPI 0.687 million barrels, BHP 0.625 million barrels, Eni Pakistan 0.120 million barrels, OMV 0.036 million barrels, MOL 0.055 million barrels and Petronas 0.008 million barrels. OGDCL was also the major producer of Gas in the year. They produced 312.297 BCF of gas, at an average rate of 856 MMCFD, this constitute around 24% of the total yearly gas production of the country. PPL was the second highest gas producing company with 291.494 BCF at an average of 799 MMCFD, which is around 22% of the total yearly gas production of the country. Mari Gas produced 162.262 BCF, OMV 202.298 BCF, Eni Pakistan 142.140 BCF, BP 84.009 BCF, BHP 94.272 BCF, POL 15.160 BCF, OPI 23.880 BCF PEL 6.352 BCF, Tullow 3.450 BCF, Petronas 2.405 BCF and MOL 4.927 BCF. In the current fiscal year 2004-05 the LPG production was 1,068 metric tones per day while in the fiscal year 2003-04 was only 961 metric tons per day. In companies OGDCL was the major LPG producer with an average of 264 metric tons per day, and in refineries PARCO produced 408 metric ton LPG per day. The total remaining recoverable oil reserves at the end of the fiscal year 2004-05 has been estimated as 308.375 million barrels and the remaining gas reserves (including non-pipeline quality gas) as 34 Trillion Cubic Feet.

2.3.2 DIRECTORATE GENERAL OF OIL

2.3.2.1 Achievement

Marketing

i. In order to create healthy competition, achieve efficiencies and attract investment in the downstream oil sector in pursuance of deregulation drive of the Government and under the Criteria for establishment of new oil marketing companies in the country as approved by the E.C.C of the Cabinet, four new oil marketing companies were approved in the name of Hascombe Storage Private Limited, Overseas Oil Trading Company Private Limited, Askar Oil Services Private Limited and Baqri pvt. Ltd. In accordance with the requirements of the Criteria, these companies will have to make minimum investment of Rs. 500 million in the next three years of their operations.

ii. A target of 5.4 million tons valuing at US $ 1.2 billion for the

import of diesel oil and furnace oil during 2004-05 was set with the approval of Finance Division. Actual import of these products during the year remained at 5.7 million tons valuing at US $ 1.2 billion.

iii. Similarly, a target of 69 million barrels valuing at US $ 2 billion

for the import of crude oil during 2004-05 was set with the approval of Finance Division. Actual import of crude oil during the year remained at 61.2 million barrels valuing at US $ 2.5 billion.

iv. It was estimated that around 16 million tons of petroleum products

will be consumed during the year while actual consumption remained at around 15.6 million tons.

v. The detail of import of petroleum products / crude oil and

consumption during 2004-05 is annexed.

vi. Import of petroleum products have been deregulated and Government has totally withdrawn from import arrangements. Oil marketing companies and bulk consumers are now importing furnace oil and diesel. Moreover, traders have also been allowed to import furnace oil. Major supply of diesel oil and furnace oil is made from kuwait, Saudi Arabia, Iran and UAE under long term contracts with the local refineries.

Logistics

i. White Oil Pipeline Project (WOPP) has been completed by Pak-Arab Refinery Limited (PARCO),at an estimated cost of US $ 480 million on build, own and operate basis. The PARCO has completed the WOPP through Pak-Arab Pipeline Company

Limited (PAPCO) a joint venture of PARCO, Shell Pakistan Limited, Pakistan State Oil Company Limited and Caltex Oil (Pakistan) Limited. The main objective of the project is to develop most efficient, cost effective, convenient safe and environment friendly mode of transportation of white oil (i.e. High Speed Diesel) in the country. The PARCO White Oil Pipeline has connected Port Qasim, Karachi to Mahmood Kot in district Muzaffargarh. The total length of pipeline is 817 Kms with 26� dia high pressure pipeline. The WOPP has a capacity to handle 12 million tons of oil per annum and storage capacity of 440,000 MT. The White Oil Pipeline has started its operation from 19th November, 2004 by delivering first parcel of 2,500 MT to OMCs at Mahmood Kot and its commercial operation commenced with effect from 1st. March 2005.

ii. The Socio-economic benefits of the Project are as under: -

a. A freight pool saving of Rs.2.1 billion in the first year and Rs.17.6 billion in the 25th year of operation giving an average saving of Rs.8.0 billion/annum. This will translate into a per liter reduction in freight of Rs.0.4/liter in the first year and Rs.0.95/liter in the 25th year averaging amount Rs.0.7/litre over 25 years period.

b. Reduction in vehicle emissions and shielding �Road

Infrastructure� from excessive wear and tear.

c. A reduction of HSD consumption by the Transport sector on account of 4000-5000 tank lorries not moving between Karachi and Mahmood Kot. This reduction is estimated as 100,000 MT/annum or Rs.2.7 billion/annum in foreign exchange

d. A storage link/flexibility for diversified mode of products

movement. Refining

i. New Refinery Projects: Various private parties had shown their interest to avail incentive under investment friendly policies of the GOP for setting up of new Refinery Project which inter alia include no restriction on setting up of new Refinery import pricing formula linked to Singapore mean and provision for setting up own Marketing network etc.

ii. A proposal/incentive package on incentive and locational

advantage for setting up of Refineries has been developed to attract foreign Investment in the downstream oil sector, and forwarded to BOI for further processing as advised by the ECC of the Cabinet.

Single Point Mooring Project

ii. GOP encourages Private Sector to participate in the Infrastructure development projects especially to diversify the Ports/terminal locations. Accordingly a proposal for setting up of Single Point Mooring was received from a Private Sector Company viz M/s Asia Petroleum Limited. The proposal was processed and sent to Ministry of Ports and Shipping for further necessary action to implement SPM through competing process.

Korangi Port Qasim Pipeline

i. The strategic need for linking oil handling and storage facilities at KPT, Korangi and Port Qasim is well established and is at the top agenda of Ministry of Petroleum and Natural Resources. The proposed project of linking KPT with PQA will provide flexibility in operations for receiving crude oil/products at any of the two ports at Karachi and its transportation up-country through cross country white oil pipeline operating since March 2005.

ii. In order to achieve the above objective Ministry of Petroleum

and Natural Resources has facilitated PARCO to construct about 25 km pipeline from Korangi to PQA because their Korangi system is already connected with KPT. PARCO has established a Joint Venture company namely Pak-Arab Pipeline Company (PAPCO) who has already initiated work on the linkage and it is expected to be completed by December 2005.

Transfer of Oil Regulatory function to OGRA

i. Pursuant to OGRA Ordinance, Regulatory functions of Directorate General of Oil have to be transferred to OGRA. Accordingly Goal/target of formulation of Policy framework for transfer of Regulatory functions has been fixed in consultation/advice of the P.M Secretariat. In order to achieve the said goal a study was proposed to be conducted by an independent consultant. TORs were developed and consultant has been appointed with financial assistance of CIDA-OGSP. The consultant is actively working on the report.

Crude Oil and Condensate Sale Purchase Agreement.

i. Directorate General (Oil) execute Ccrude Oil and Condensate Sale/Purchase Agreement (COSA) with the producers of crude oil and condensate as per provisions of relevant Concession Agreement. Model COSA was developed in consultation with all the Stakeholders with the concurrence of Law and Justice Division. All the producers have been advised to submit draft COSA accordingly.

ii. M/s BHP is producing condensate from Zamzama field in Sind. M/S BHP had approached Ministry for execution of COSA required for pricing of the product Condensate Sale and Purchase Agreement was examined in consultation with all concerned and executed.

Pricing

i. The prices of petroleum products had increased tremendously in the International market during the past year. The domestic sale prices of petroleum products, being linked with International Market product prices, were required to be increased accordingly. But the Government decided to protect the consumer from the burden of high prices in International Market and capped the domestic sale prices during the period May-December 2004 and April-June 2005.

ii. In doing so the Government had taken the hit on its revenue resources to the tune of around Rs.58.5 billion by June 2005. In other words the consumer had been benefited through this capping in particular and Government had been able to control the inflation in the country. Had the prices not capped, the price of petroleum products would have sky rocketed.

iii. As against the increase in International Market in the range of 40% to 79%, the domestic sale prices have been increased in the range of 23% to 32%.

Import of POL Product 2004-05

(Qty in tons, Value in US $ Million)

Quarter HSD FO Total

Quantity Value Quantity Value Quantity Value

July-September, 2004 966,009 344.34 558,706 106.93

1,524,715 451.27

Oct-December, 2004 1,158,161 456.33 419,868 83.65

1,578,029 539.99

January-March, 2005 998,282 391.21 477,779 99.83

1,476,061 491.04

April - June, 2005 1,097,180 515.97 - 0.00

1,097,180 515.97

Total 2004-05 4,219,632 1707.85 1,456,353 290.41

5,675,985 1998.26

Import of Crude Oil 2004-05

(Qut in Barrls, Value in US $ Million) Crude type July - Sept, 2004 Oct-Dec, 2004 Jan-March, 2005 April-June,2005 Total

Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value

Light

Arabian

9,955,240 370.99

9,885,021 362.73

9,283,707 382.83

8,669,671 431.81

37,793,639 1548.35 Light

Iranian

478,275 17.51

482,876 16.71

476,468 22.34

477,818 22.48

1,915,437 79.04 Upper

Zakum

1,502,795 55.22

1,522,275 54.88 2,472,317 108.82

1,929,507 92.04

7,426,894 310.96

Murban

2,998,734 116.23

2,499,201 101.67 2,978,461 133.68

1,534,414 82.08

10,010,810 433.66 Qatar

Marine

898,057 33.59

1,349,733 49.49

898,055 38.88

869,541 41.71

4,015,386 163.67

Total

15,833,101 593.54

15,739,106 585.48

16,109,008 686.55

13,480,951 670.12

61,162,166 2535.68

Product wise consumption of POL Product during 2004-2005

(Quantity in M. Tones)

Product Quantity 100 LL 1,951 HOBC 9,942 MS 1,322,354 SKO 232,999 JP-I 923,571 JP-4 171,234 HSD 7,734,266 LDO 161,905 FO 4,592,367 Total (Energy Products) 15,150,589 Asphalt 308,995 Lubes 132,118 Others 27,564 Total (Non-Energy Products) 468,677 Grand Total 15,619,266

Sectoral Consumption of POL Product during 2004-2005

(Quantity in M.Tones)

Sector Quantity Domestic 192,909 Industry 1,870,658 Agriculture 142,086 Transport 9,122,386 Power 3,454,096 Govt./Others 342,155

Total Internal 15,124,290 Overseas 494,976 Grand Total 15,619,266

Price Breakup Chart of POL Products July 2004 - June 2005

(Rs per Litre) Date Products

Ex-Refinery

Price

Custom/ Excise Duty

Petroleum Development

Levy

OMCs Margin

Dealers Commission IFEM PDC GST

Ex-Depot Prices

1.07.04 MS 87 RON 17.18 0.88 9.27 1.29 1.47 2.01 4.82 36.92

HOBC 17.74 0.88 10.13 1.43 1.63 3.73 5.33 40.87

Kerosene Oil 16.72 0.00 1.93 0.84 0.00 1.38 3.13 24.00

HSD 16.57 0.00 1.24 0.85 0.97 1.56 3.18 24.37

LDO 15.51 0.00 0.49 0.73 0.00 1.57 2.75 21.05

JP-1 15.92 0.06 0.00 0.02 0.00 0.00 2.40 18.40

JP-4 15.96 0.00 3.00 0.00 0.00 0.00 2.84 21.80

1.10.04 MS 87 RON 20.88 0.88 0.00 1.29 1.47 8.70 -1.12 4.82 36.92

HOBC 21.51 0.88 0.00 1.43 1.63 11.24 -1.15 5.33 40.87

Kerosene Oil 22.68 0.00 0.00 0.84 0.00 0.00 -2.65 3.13 24.00

HSD 21.75 0.00 0.00 0.85 0.97 0.00 -2.38 3.18 24.37

LDO 20.00 0.00 0.00 0.73 0.00 0.13 -2.56 2.75 21.05

JP-1 21.54 0.06 0.00 0.02 0.00 0.00 0.00 3.24 24.86

JP-4 20.82 0.00 3.00 0.00 0.00 0.00 0.00 3.57 27.39

1.01.05 MS 87 RON 19.22 0.88 2.30 1.41 1.61 9.70 0.00 5.27 40.39

HOBC 19.82 0.88 2.50 1.56 1.78 12.23 0.00 5.82 44.59

Kerosene Oil 19.74 0.00 1.30 0.91 0.00 0.69 0.00 3.40 26.04

HSD 20.05 0.00 0.65 0.91 1.05 0.13 0.00 3.42 26.21

LDO 18.35 0.00 0.25 0.80 0.00 0.53 0.00 2.99 22.92

JP-1 18.77 0.06 0.00 0.02 0.00 0.00 0.00 2.83 21.68

JP-4 18.48 0.00 3.00 0.00 0.00 0.00 0.00 3.22 24.70

1.04.05 MS 87 RON 24.04 0.88 0.00 1.59 1.82 2.49 8.77 5.94 45.53

HOBC 24.71 0.88 0.00 1.76 2.02 4.26 10.30 6.59 50.52

Kerosene Oil 27.49 0.00 0.00 0.97 0.00 1.54 -5.87 3.65 27.78

HSD 26.07 0.00 0.00 1.02 1.16 1.19 -4.17 3.79 29.06

LDO 24.16 0.00 0.00 0.92 0.00 1.22 -3.35 3.44 26.39

JP-1 26.08 0.06 0.00 0.02 0.00 0.00 0.00 3.92 30.08

JP-4 24.85 0.00 3.00 0.00 0.00 0.00 0.00 4.18 32.03

16.06.05 MS 87 RON 21.17 0.88 0.00 1.59 1.82 2.09 12.04 5.94 45.53

HOBC 21.80 0.88 0.00 1.76 2.02 2.61 14.86 6.59 50.52

Kerosene Oil 26.86 0.00 0.00 0.97 0.00 1.56 -5.06 3.65 27.98

HSD 26.20 0.00 0.00 1.02 1.16 1.35 -4.46 3.79 29.06

LDO 24.99 0.00 0.00 0.92 0.00 1.59 -4.55 3.44 26.39

JP-1 25.48 0.06 0.00 0.02 0.00 0.00 0.00 3.83 29.39

JP-4 22.97 0.00 3.00 0.00 0.00 0.00 0.00 3.90 29.87

2.3.3 DIRECTORATE GENERAL OF GAS

i. Natural gas contributed around 50% of the total primary commercial energy supplies in the country. The present gas consumption/demand in the country is 3181 MMCFD. Comparison of sectoral gas consumption during 2003-04 and 2004-05 is given below :-

Table � 2.4

SECTORAL GAS CONSUMPTION

Unit MMCFT. Sectors 2003-2004

%age 2004-2005

%age

Power 468291 44.6 507363 43.7 Fertilizer 185346 17.7 190412 16.4 G. Industries 216974 20.6 263938 22.7 Commercial 24202 2.3 27191 2.3 Domestic 155439 14.8 172103 14.9

Total 1050252 100 1161007 100.0 Average per Day 2877 3181

ii. Company-wise & Sector-wise new gas connections given are as under.

New connections provided during 2003-04 and 2004-05.

Table � 2.5

SNGPL

Sectors 2003-04 Target for 2004-

05 Achievement in 2004-05

Industrial 178 300 422 Commercial 2413 3500 3474 Domestic 102670 185000 174306 Total 105261 188800 178202

Table - 2.6

SSGCL

Sectors 2003-04 Target for 2004-05 Achievement in 2004-05

Industrial 255 225 224

Commercial 1244 860 1489

Domestic 67064 65550 76865

Total 68563 66635 78578

iii. Company-wise Transmission and Distribution Pipelines Network during 2003-04 and 2004-05

Table - 2.7

SNGPL

(FIGURES IN Km.) Pipeline Network 2003-04 Target for 2004-05 Achievement for 2004-05

Transmission Network 373 486 345 Distribution Mains 1965 2250 3157 Services 506 560 750 Total 2844 3296 4252

Table - 2.8

SSGCL

Pipeline Network 2003-04 Target for 2004-05 Achievement for 2004-05 Transmission Network - 157 157 Distribution Mains 721 1842 1158 Services 203 197 251 Total 924 2196 1566

iv a. Targets Set For New connections for 2005-2006.

Table - 2.9

Sectors SNGPL SSGCL Industrial 350 250 Commercial 3845 1155 Domestic 198,740 76260 Total 202,935 77665

b. Targets Set For Transmission/Distribution Network for 2005-2006

Table - 2.10

(FIGURES IN Km.) Pipelines SNGPL SSGCL

Transmission Lines 116 52 Distribution Lines 2950 1789 Total 3066 1841

v. Gas Pipeline infrastructure Development for new Gas Discoveries.

With the best efforts of Directorate General Gas over 1 BCFD of additional gas has been injected into the system from new fields (Miano, Zamzama, Sawan, Bhit, Sui Deep, Hassan & Badin Block-II).

This gas is being mostly utilized in Power sector. The gas utility companies i.e. SNGPL & SSGCL have almost completed their infrastructure development projects at a total cost of approximately Rs.12.7 billion. After implementation of this project. SNGPL has initiated Gas Infrastructure Development Project VII and project VIII, as tabulated below :

Description Project VII Project VIII

Additional Gas 560 MMCFD 390 MMCFD

Transmission Line Laid 580 km 803 km

Compression power installed 25000 -

Cost 9.356 billion 8.5 billion

Period 2001-2003 July 2003-Dec2005

Capacity Increased 980 to 1380 MMCFD 1380 to 1650 MMCFD

Foreign exchange saving per year. US $ 800 MILLION US $ 560 MILLION

SSGCL after commissioning of pipeline projects by June 2005 added around 280 MMSCFD capacity as part of the �Gas Infrastructure Development for new discoveries�. The total project cost added is approx. Rs. 2219 million which would replace imported furnace oil with a saving of approx. US $ 773 million. SSGCL�s gas transmission would enhance from 1000 MMSCFD to over 1280 MMSCFD.

vi. CNG for Automotive Use. Government of Pakistan is encouraging the use of Compressed Natural Gas (CNG) as an alternate fuel for automotives in order to control environment degradation, save foreign exchange in import of liquid fuels and generate employment. Due to Government �s encouragement, Pakistan has become third largest CNG user in the world. To ensure rapid development of the CNG industry and considering the proposals of this Ministry CBR exempted import duty and sales tax on import of CNG Euro-2 buses weather in CBU or CKD under SRO 576 (1)/2005 dated 06-06-2005 and Sales Tax Act exemption section 13(1) (schedule-6). Total CNG stations and vehicles converted to CNG upto end of financial years 2003-04 and 2004-05 are given as under:

S. No CNG Activity. By the end of

2003-04 By the end of

2004-05

% Increase/ Decrease

1. Total operational CNG station till end of financial year (F.Y.)

546

732

34.1

2. Vehicles converted to CNG 500,000 750,000 50.0 3. Total No of provisional licences

issued till end of financial year 1486

2100

41.3

vii. Liquefied Petroleum Gas (LPG)

LPG is an economical, clean and environment friendly fuel. It is the most popular domestic fuel in areas where supply of natural gas is not available. At present out of 20 million households only 4 million have been connected with natural gas, and around 2.0 million are using LPG whereas the rest are using fuel wood, coal, kerosene and cow dung etc. The number of LPG companies have increased from 29 to 36 and local LPG production has grown from 325000 M. Tons to 390677 M. Tons per annum.

viii. The sector-wise / Region-wise consumption of LPG and Import of LPG is as under:

a. Region-wise consumption of LPG. (UNIT: M.TONS.)

Region. 2003-04 2004-05. % increase / (Decrease)

AJK. 22465 26614 18.5 Baluchistan 15378 9835 -(36.0) Federal Area 3305 3900 18.0

FATA 9287 15595 67.9 NWFP 71191 44787 -(37.1) Northern Area 6299 44950 613.6 Punjab 162357 196171 20.8 Sindh 61294 74433 21.4 TOTAL : 351,576 416,284 18.4

b. LPG Imports.

(UNIT : M.TONS) SECTOR Years : 2003-04 2004-05

LPG Imports. 35000 40492

ix. The Government deregulated LPG prices and allocation w.e.f. 15th September 2000. All the producers of LPG are now empowered to either market their LPG themselves or dispose it of through the licensed marketing companies or to the new parties. All marketing companies are now free to develop their LPG market, as they wish, except for use in automotive. However in order to ensure LPG supply in remote hilly areas, with a view to protect our precious forests each company is obligated to market at least 7%, of its product in AJK, 7% in Northern Areas, 6% in FATA, and 10% of LPG uplifted from Pak-Arab Refinery Company Limited (PARCO) to Baluchistan. The regulatory work regarding LPG has been transferred to Oil and Gas Regulatory Authority (OGRA) w.e.f. 15th March 2003.However the policy formulation function of MPNR will remain intact.

Chapter 3

ATTACHED DEPARTMENT

http://www.gsp.gov.pk/

GEOLOGICAL SURVEY OF PAKISTAN (GSP)

3.1 INTRODUCTION

Geological Survey of Pakistan (GSP) is an attached department of the Federal Ministry of Petroleum and Natural Resources with its headquarters office located at Quetta and as per its charter the GSP is responsible for study of geology of the country in all pertinent details and to assess its geological resource potential. With a balanced, efficient and competitive structure, GSP is now fully capable to explore mineral resources and undertake geological, geophysical, geo-technical and geo-chemical investigations, and drilling. During the recent past GSP�s technical services were frequently availed by the local and foreign companies, institutions and private sector organizations. The GSP also undertakes development projects to cater to immediate needs in the fields of geological mapping and mineral exploration. It undertakes:

i. Geological mapping and other geoscientific surveys, ii. Basic and applied research in earth sciences,

iii. Scientific investigations for an accurate understanding of the country�s geological resources and their prudent management, and

iv. Environmental geology and hydrogeological studies.

3.2 INSTITUTIONAL STRUCTURE The GSP was established in 1947. The department is headed by the Director General. The technical and other activities of the department are planned and controlled by the Management Advisory Committee (MAC) which is composed of all the Deputy Directors, Generals and equivalent officers as its members under the Chairmanship of the Director General. Regional and category wise distribution of the manpower is given below:

Table � 3.1

REGION-WISE DISTRIBUTION OF GAZETTED AND NON-GAZETTED STAFF OF THE GEOLOGICAL SURVEY OF PAKISTAN

S. No. Name of Office

Gazetted Staff Non-Gazetted

Staff Total 1. GSP�s Headquarter office, Quetta. 126 386 512

2. GSP�s Regional office, Lahore. 50 113 163

3. GSP�s Regional office, Karachi. 41 99 140

4. GSP�s Regional office, Islamabad. 22 57 79

5. GSP�s Regional office, Peshawar. 18 56 74

6. GSP�s Regional office, AJK. 4 13 17 7. GSP�s Advance Geoscience

Research Lab, Islamabad. 3 19 22

Total 264 743 1007

Table -3.2

CATEGORY-WISE DISTRIBUTION OF OFFICERS AND STAFF OF THE GEOLOGICAL SURVEY OF PAKISTAN

S. No. Category Number

1. Geologists 146 2. Geophysicists 18 3. Chemists 21 4. Drilling Engineers etc 25 5. Photogrammetrists 7 6. Other technical 18 7. Administration & Accounts 29 8. Technical Staff 280 9. Ministrial Staff 155 10. BPS 1-2 staff 308

Total 1007

3.3 BUDGET AND FINANCE The GSP gets its annual budgetary allocation in the federal budget every year and some allocation is also made for the department in the federal PSDP for undertaking its Development Projects. The budget figures for the last five years are given below:

Table - 3.3

GSP�S BUDGET FOR LAST FIVE YEARS

Year 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006

Current Budget

128.497 135.675 127.005 145.605 172.783

Development Budget

47.900 136.824 200.920 133.271 134.330

TOTAL

176.397

272.499

327.925

278.876

307.113

3.4 ACTIVITIES, ACCOMPLISHMENTS AND PROGRESS 2004-2005

i. The technical activities during the year 2004-2005 were undertaken in

accordance with the approved cash / work plans.

ii. Geological Survey of Pakistan completed Geological mapping of 15,560 sq. km in different areas of the country on 1:50,000 scale, which included 7040 sq. km in Balochistan, 1530 sq. km. in Sindh, 2030 sq. km. in NWFP, 1728 sq. km. in Punjab, 2360 sq. km. in Northern areas and 872 sq. km. in Azad Jammu & Kashmir. In addition updating and digitization of geological maps of Nagar Parker and Hyderabad blocks, Sindh covering an area of 3840 sq. km has been completed.

iii. The GSP also carried out extensive drilling programme under different development projects. A total of 13 boreholes were drilled for a cumulative depth of 2590 meters for mineral and coal exploration. Two boreholes were drilled for a cumulative depth of 380 meters under GSP-NIO-University of Aberdin UK joint project for Indus Valley Ocean study.

iv. Understanding the vital need of communication and to share its

geotechnical research among the earth scientists GSP launched a programme of thematic workshops-2005. The first one - day workshop on the theme �Stratigraphy and paleontology of Pakistan with special reference to geology and mineral resources of Hazara� was held on 8th February 2005 at Islamabad. The second one-day workshop on the theme �Coal, granite and china clay resources of Thar area, Sindh, Pakistan� was held on 31st May, 2005 at Karachi.

MAJOR ACCOMPLISHMENTS OF THE DEPARTMENT DURING THE FISCAL YEAR 2004-2005. 3.5 REGIONAL GEOLOGICAL MAPPING Geological mapping of 15,560 sq. km in different areas of the country was completed on 1:50,000 scale, which included 7040 sq. km in Balochistan, 1530 sq. km. in Sindh, 2030 sq. km. in NWFP, 1728 sq. km. in Punjab, 2360 sq. km. in Northern areas and 872 sq. km. in Azad Jamu & Kashmir. In addition digitization for updating of geological maps of Nagar Parker and Hyderabad blocks, Sindh covering an area of 3840 sq. km has also been completed. 3.6 BASIC AND APPLIED RESEARCH Fieldwork has been completed for sedimentological studies along the modern Indus River in Northern Areas. Compilation of field data, report writing and other related studies are in progress.

3.7 PALEONTOLOGIC AND STRATIGRAPHIC STUDIES

i. First ever- saurischian dinosaurs from the late cretaceous of Pakistan; Taxonomy and Depositional Environment.

ii. Early tertiary paleontology and sequence Stratigraphy of Sulaiman range. iii. Compilation of �Stratigraphy of Balochistan� and �Tectonic setup of Sulaiman

range� was undertaken. iv. Establishment of vertebrate Paleontology Museum and reference section and

Kara koram highway rock reference section at GSP Islamabad office. 3.8 HYDROGEOLOGICAL STUDIES

i. Hydrogeological investigations of Pishin-lora basin, district Pishin,

Balochistan.

ii. Hydrogeological investigations of Qila Abdullah, Pishin-lora basin, Balochistan.

iii. Spot investigation for ground water resources in Hhussain Abad area, district Muzaffargarh.

3.9 REGIONAL GEOPHYSICAL MAPPING PROJECTS

i. Groundwater investigation in Kawas and Sara Tangi, district Ziarat, Balochistan.

ii. Geophysical investigation for lead-zinc sulphide minerals in pre cambrian rocks, district Haripur, NWFP.

iii. Magnetic and self-potential surveys for mineralization in Tamneri-kchi areas district Haripur, NWFP.

iv. Magnetic and self-potential surveys for metallic mineralization in Kiar-sucha areas, district Mansehra, NWFP.

3.10 ECONOMIC GEOLOGY

i. Petrographic Studies of dolomite at matyaro & Kathwari area, Thatta district, Sindh.

ii. Geology and Mineral resource map of chakwal district, Punjab. iii. Geology and Mineral resource map of Lahore district, Punjab. iv. Exploration and Systematic Evaluation of Limestone, Dolomite and

Building Stone in The Salt Range, Punjab, Pakistan.

v. Evaluation of poly metallic mineralization in khan kalan area, district muzaffarabad, AJK.

vi. Preliminary Geological investigation of Iron/Copper mineralization in dumashi-nakhetar area, districtmuzaffarabad, AJK.

3.11 ENVIRONMENTAL & ENGINEERING GEOLOGICAL STUDIES

i. Environmental impact on groundwater resources of Karachi. ii. Environmental impact of pollution on the groundwater quality of sheikhupura

aquifers. iii. Ground water toxicity around Lahore and adjacent areas.

3.12 TECHNICAL ASSISTANCE PROVIDED BY GSP Under the GSP-TCC collaborative project the detailed IP profiling/ mapping using Wenner technique and Dipole-Dipole (Frequency domain) was undertaken in Reko Dek and surrounding area for subsurface assessment of mineral potential. The field work involved on-site training of GSP Geophysicist on instrument operation and usage of software for data processing and interpretation.

On the request of Pakistan Army resistivity survey for groundwater investigation was undertaken at Sui and Kashmor, Balochistan.

Detail field studies on gypsum (Khisor range), bentonite Peshawar fire clay and Iron ore (Nizampur) were carried out in joint collaboration with PCSIR Lab. Peshawar. Laboratory work is in progress.

The officers of the Geological Survey of Pakistan imparted the field training to the students of M.Sc final of Geology Deptt. Urdu University in Hub area, Balochistan and M.Sc (final) students of Sindh University, Jamshoro in Ranikot area, Sindh.

Technical assistance was provided to the students of Geology Department, University of Peshawar in conducting of fieldwork for their master level research programme.

3.13 CHEMICAL LABORATORY WORK GSP Chemical laboratories at Quetta, Lahore and Karachi analyzed 1144 samples for 12255 estimations. 180 water samples to determine TDS have also been analysed by GSP chemistry lab Lahore. The GSP Advance Geoscience Research Laboratories at Islamabad prepared 307 powdered samples and 83 thin / polished sections. The chemical section analyzed 899 samples for 6,091 estimations by XRF, ICP, AAS and 282 samples by XRD. 3.14 PUBLICATIONS The research activities of the department were published in the form of 15 Information Releases, and 26 geological maps. The departmental newsletter �GSP Newsletter� geoscientific activities of the department was published regularly highlighting. 3.15 DEVELOPMENT PROJECTS EXECUTED BY GSP

i. Systematic Evaluation and appraisal of Coal resources of four specific tracts in Thar Coal field, Mithi district, Sindh.

ii. Construction of office & laboratory building for GSP at Peshawar. iii. Bankable feasibility study of Thar Coal Mining. iv. Exploration of Hangu and Karak Coal deposits, NWFP, Pakistan. v. Assessment of Coal potential of Ghazij basin in Balochistan, Pakistan.

vi. Accelerated Mineral exploration programme of the Geological Survey of Pakistan to identify new Mineral deposits of the Country.

vii. Drilling of 11 bore holes in different areas. viii. Ground follow-up of aeromagnetic anomalies in Chagai/lasbela Districts,

Balochistan. ix. Exploration for Coal in Kotli area, AJK.

3.16 PROGRAMME OF ACTIVITES AND TARGETS 2005-2006

3.16.1 REGIONAL GEOLOGICAL MAPPING

The GSP will undertake mapping of about 15,000 sq. km. area in various parts of the country. In addition to the geological mapping an area of 400 sq. km. will be covered through geophysical surveys. Mineral exploration projects include iron ore in Punjab and Balochistan, Lead-Zinc-Barite

investigations in Balochistan and NWFP, limestone studies in Sindh and copper-gold prospects in Balochistan. Environmental, urban and hydrogeological studies will be carried out for Lahore and Islamabad cities. Research projects will also be undertaken in collaboration with Harvard, Howard and Michigan universities of U.S.A. Eight development projects (including 5 in energy sector and 3 in mineral sector) will be executed. The province-wise activities under the regular projects will be as given below: -

i. Balochistan

Geological research for mapping and mineral exploration will be carried out by covering an area of 7, 000 sq. km. in different parts of the province of Balochistan on 1: 50,000 scale as detailed below:

a. Regional Geological research, mapping and Mineral investigation

of toposheet No31 J/3, District Kach. b. Regional Geological research, mapping and Mineral investigation

of toposheet No31 J/4, District Kach. c. Regional Geological research, mapping and Mineral investigation

of toposheet No31 J/7, District Kach. d. Regional Geological research, mapping and Mineral investigation

of toposheet No35 O/1, District Lasbela & Khuzdar. e. Regional Geological research, mapping and Mineral investigation

of toposheet NO34 K/3, District Kach. f. Regional Geological research, mapping and Mineral investigation

of toposheet No34 K/4, District Kalat. g. Regional Geological research, mapping and Mineral investigation

of toposheet No. 34 K/5, District Kalat. h. Regional Geological research, mapping and Mineral infestation of

toposheet No. 34 N/13, District Zhob.

ii. Sindh

Geological research for mapping and mineral exploration will be carried out by covering an area of 2, 040 sq. km. through geological mapping in different parts of the province on 1: 50,000 scale.

a. Geological Mapping of toposheet No. 40 C/2 (Lower Half). b. Geological Mapping of toposheet No. 35 P/14. c. Geological mapping of coastal area of toposheet 35 C/15 & 35

G/3 & 7. iii. Punjab

Geological research for mapping and mineral exploration will be carried out by covering an area of 1, 280 sq. km. under the following project on 1: 50,000 scale.

a. Geological Mapping of Kalchas Quadrangle (Toposheet No.

39 G/11) Quadrangle, District Rajanpur, Punjab.

b. Geological Mapping of Sabzal area (Toposheet No. 39 G/16), Rajanpur District, Punjab.

iv. Northern Areas

Geological research for mapping and mineral exploration will be carried out by covering an area of 1,280 sq. km. in the Northern Areas of the country on 1: 50,000 scale as detailed below:

a. Geological Mapping and Mineral investigations of Astore

quadrangle No. 43 I/15, District Astore, Northern Areas, Pakistan.

b. Compilation of Geological Map of Kohistan Islanad arc.

v. Geoscience Lab., Islamabad

Geological research for mapping and mineral exploration will be carried out by covering an area of 1, 280 sq. km. under the Advance Geoscience Research Lab., Islamabad on 1: 50,000 scale. Details of mapping projects are given below:

a. Geological Mapping of Jijal Quadrangle 43 A/16 b. Geological Mapping of Gashu Qudrangle 43 I/6

vi. NWFP

Geological research for mapping and mineral exploration will be carried out by covering an area of 2, 560 sq. km. in different parts of the province of NWFP on 1: 50,000 scale as detailed below:

a. Geological mapping and mineral investigation of Mansehra

Quadrangle (43 F/3) District Mansehra. b. Regional Geological mapping and mineral investigation of

Chitral Quadrangle (38 M/13) District Chitral. c. Geological mapping and mineral investigation of Landikotal

Quadrangle (38 N/4) Khyber Agency (FATA). d. Regional Geological mapping and mineral investigation of

Parachinar Quadrnagle (38 K/1) Kurram Agency (FATA).

vii AJK

Geological research for mapping and mineral exploration will be carried out by covering an area of 200 sq. km. in AJK on 1: 50,000 scale under the following project:

a. Geological mapping and mineral investigations of Kel area

(43-I/5) Azad Kashmir (Approximately 200 sq km)

3.17 PALEONTOLOGY & STRATIGRAPHY

a. Early Tertiary Paleontology and sequence stratigraphy of Sulaiman Range, A GSP-Museum of Paleontology, Michigan University, USA Joint Research Programme.

b. Compilation of stratigraphy of Balochistan. c. Stratigraphic and Paleontological studies of the K-T Boundary in

Balochistan and its economic significance.

3.18 BASIC AND APPLIED RESEARCH

a. Geochronological studies of magmatism of the Chilas Complex Kohistan arc, Northern Pakistan based on U-Pb Nireon technique.

b. Sedimentological studies along the modern Indus river in Northern Areas.

3.19 HYDROGEOLOGICAL RESEARCH

a. Hydrogeological investigations of Mastung area, Pishin Lora Hydro geological Basin, Balochistan.

b. Hydrogeological investigations of Mangochar area, Pishin-Lora Hydro geological Basin, Balochistan.

c. Hydrogeological studies including water quality of the open reservoirs (Lakes) of Southern Sindh.

3.20 ECONOMIC GEOLOGICAL RESEARCH

a. Evaluation and Exploration of Celestite Deposits in Eastern Salt Range, Jhelum and Chakwal Districts, Punjab.

b. Evaluation and Assessment of clay resources of Punjab. c. Dolomite Deposits of Khewra, Jutana and Basharat area, Eastern Salt

Range, Punjab, Pakistan. d. Environmental Geology, Mineral and Groundwater Investigations of

Khushab area (Toposheet No. 43 D/7) e. Chakwal District Resources Map (Continuous Project from last year). f. Lahore District Resources map (Continuous Project from last year). g. Evaluation and assessment of Iron ore in NWFP, Peshawar. h. Studies of Graphite Mineralization in Spinkai Tirah area Khyber Agency. i. Alteration study of Gold mineralization in Hushe and Runthuk areas of

District Khaplu Toposheet Nos. 52 A/7 and 52 A/12 respectively. j. Evaluation of poly metallic mineralization in Khan Kalan area, District

Muzaffarabad, AJK. k. Petrological studies of Eocene rocks of Meting area, Quadrangle 40 C/4,

Thatta District, Sindh, Pakistan. l. Study / Evaluation of celestite mineralization near Kalu Kahar (35 O/12)

Dadu District, Sindh. m. Petrography and Geochemistry of basalts to determine the tectonic

environment of their emplacement, Ranikot area, Dadu District, Sindh (35 O/12).

n. Mineral resources potential of District Dadu, Sindh, Pakistan.

o. Gemstone investigations in Chitral area, NWFP, Pakistan. p. Bastnasite investigation in Zagai Ghar, Warsak, Peshawar, Pakistan. (One

week field work and chemical & mineralogical studies) q. Economic appraisal of Manganese in Hazara area.

3.21 GEOPHYSICAL MAPPING, EXPLORATION AND RESEARCH

a. Gravity, Magnetic, I.P. and E.M. surveys over prominent aeromagnetic anomalies site in Alam Reg, Maski-Chah, Pachin Koh and Dalbandin, in Chagai District under Ground Follow-up of Aero-Magnetic Anomalies Project.

b. Geophysical surveys for iron ore exploration in Nooriabad area, District Dadu Sindh under Accelerated Mineral Exploration Project.

c. Regional gravity and magnetic surveys in Mardan areas, NWFP. d. Geophysical surveys for mineral exploration over part of Pre-Cambrian

Basement rocks in Kahna-Kasur area Punjab. e. Geophysical logging of exploratory bore holes for coal in Thar Extension

Blocks Sindh, under Thar Coal Project. f. Electrical surveys (resistivity, E. M., I.P) for groundwater, Engineering

geology and mineral exploration under spot investigation programme for public/private sector development agencies.

g. Integrated Geophysical Survey for Metallic Minerals in Precambrian Shield Rocks near Kahna Town, District Lahore, Punjab, Pakistan.

h. Magnetic survey for basement studies at Nagar Parkar, area Sindh. 3.22 DRILLING

Drilling of 18 shallow bore holes for a cumulative depth of 100 m. in Nooriabad for iron ore and 15 deep bore holes in Ghazij basin, Hangu, Chagai and Lasbella areas will be undertaken during the current year.

3.23 PUBLICATIONS

The department will publish the results of its research activities in the form of following reports and maps:

• Memoirs 1 Nos. • Records 1 Nos. • Mineral Information Series (MIS) 4 Nos. • Information Releases (IR) 12 Nos. • Maps 10 Nos. • GSP NEWS 2 Nos. • Misc. Reports 5 Nos.

3.24 COLLABORATIVE PROJECTS

a. Detailed studies of the limestone and gypsum resources in NWFP for utilization in cement industries will be carried out jointly with the PCSIR lab, Peshawar.

b. Geological and Hydro Geological investigation were carried out in

Mohmand Agency for Pakistan Army last year. The same will be extended whenever they demanded for the rest of the area of their interest.

3.25 RESEARCH THROUGH DEVELOPMENT PROJECTS

a. Systematic Evaluation and Appraisal of Coal Resources of Four Specific Tracts in Thar Coal Field, Mithi District, Sindh.

b. Exploration of Hangu and Karak Coal Deposits, NWFP, Pakistan. c. Assessment of Coal Potential of Ghazij Basin in Balochistan, Pakistan. d. Accelerated Mineral Exploration Programme of the Geological Survey of

Pakistan to Identify New Mineral Deposits of the Country. e. Ground follow-up of Aeromagnetic Anomalies in Chagai / Lasbela

Districts, Balochistan. f. Exploration for coal in Kotli Area, AJK. g. Accelerated Geological Mapping & Geochemical Exploration of the out-

crop area of Pakistan. h. Upgradation / Strengthening of Geoscience Advance Research Laboratories,

Geological Survey of Pakistan.

Chapter - 4

AUTONOMOUS BODY

http://www.hdip.com.pk

HYDROCARBON DEVELOPMENT INSTITUTE OF PAKISTAN

(HDIP)

4.1 INTRODUCTION Hydrocarbon Development Institute of Pakistan (HDIP) is an autonomous body under the Ministry of Petroleum & Natural Resources. It carries out applied research and renders advice to the Government on scientific and technical matters in the oil, gas and energy sector including energy-environment, energy-planning and energy-policy issues. The HDIP also provides consultancy and laboratory services for the oil and gas industry in Pakistan in diverse fields of its expertise. 4.2 INSTITUTIONAL STRUCTURE The HDIP was established in 1975 through a Resolution of the Government of Pakistan dated 10.9.1971, revised on 26.7.1984. It is registered under the Societies Registration Act, 1860. Its Board of Governors is chaired by the Minister for Petroleum & Natural Resources, while its chief executive is designated as Director-General. In order to comply with legal requirements necessary for establishment of autonomous bodies, the Government has proposed to establish HDIP under an Act of Parliament. A draft Bill is under consideration of the Senate. Board of Governors

OFFICIAL 1 Mr. Amanullah Khan Jadoon

Minister for Petroleum & Natural Resources Chairman of the Board

2 Mr. Ahmad Waqar Secretary, Ministry of Petroleum & Natural Resources

3 Mr. Hilal A Raza, Director General Hydrocarbon Development Institute of Pakistan

4 Mr. M. Iqbal Awan Financial Adviser (P&NR) Finance Division

5 Mr. M.Naeem Malik Director General (Petroleum Concession) Ministry of Petroleum & Natural Resources

NON-OFFICIAL 1 Mr. Salim Mehmud, S. I. 2 Mr. Farooq Rehmatullah

Chairman Oil Companies Advisory Committee

3 Mr. S. Munsif Raza Managing Director Pakistan Petroleum Limited

4 Mr. Vaqar Zakaria Chief Executive Hagler Bailly (Pvt) Limited

5 Mr. Salim Pervez Siddiqi Joint Secretary (Projects) Planning & Development Division.

4.3 ESTABLISHMENT The Head Office of the Institute is at Islamabad while its main laboratories are located at Islamabad and Karachi. In addition, it maintains four Petroleum Testing Centres at Lahore, Peshawar, Quetta and Multan, four CNG Stations at Islamabad, Karachi, Lahore and Quetta and four Cylinder Testing Labs at Islamabad, Karachi, Lahore and Peshawar. The HDIP has 230 employees. Its annual budget for 2004-05 was Rs 74 million comprising Rs 40 million provided as grant by the Government and Rs 34 million generated from HDIP's own resources that included CNG activities, analytical services and consultancy studies. 4.4 OIL & GAS EXPLORATION During the year 2004-05, HDIP's Geological & Geochemical Labs, located at Islamabad, performed pre-exploration studies of Oil and Gas basins for assessing regional prospectivity. The HDIP established, with Canadian assistance, the Pakistan Petroleum Core House, a national repository of rock samples, cuttings and cores from wells drilled in Pakistan for further studies to promote exploration in the country. This state-of-the-art facility, inaugurated on 17.12.2003, now houses 375,000 samples from 891 wells drilled all over the country for quick access, physical examination and scientific study. To meet the demand of increasing petroleum exploration activities, the HDIP provided advanced laboratory services and research inputs to the local and foreign companies engaged in oil and gas exploration in Pakistan. Some 800 rock samples were analyzed for determination of geological, geochemical and reservoir engineering parameters. Ten (10) consultancy projects of various companies completed and work on Punjab Platform Research Project is in progress. HDIP in collaboration of E& P companies organized a two-day workshop on �Oil & Gas Generation and Accumulation in Pakistan, April 4-5,2005 at Islamabad. Four Geoscientists of HDIP, presented their research papers in the workshop. 4.5 ANALYTICAL SERVICES HDIP's main Petroleum Analytical Labs are located at Karachi that have received ISO 9002 accreditation. These labs, together with smaller units at Islamabad and the four Petroleum Testing Centres, cover a complete range of analytical facilities of crude oil, petroleum products and natural gas. These labs provided standard analytical services to the national oil and gas industry, analyzing about 8,000 Oil and Gas samples and worked for the Government as the authorized labs for quality certification. They also conducted research in alternate fuels, combustion systems and process development. HDIP chaired several committees of the Pakistan Standards & Quality Authority, namely Chemical Divisional Council, Petroleum Products Sectional Committee, CNG Committee and Weights & Measures Committee. 4.6 CNG DEVELOPMENT A research Project of HDIP on using compressed natural gas (CNG) to replace liquid petroleum has grown into a country-wide industry. BMR of Karachi CNG station

was completed by installing two new compressors of 250 M3 / hr capacity each .As a result, 732 CNG refueling stations were operational on 30.6.2005 (including 4 by HDIP and 728 by private sector) catering to the needs of more than 750,000 CNG vehicles. HDIP is in process of establishing one more CNG station at Peshawar. The CNG cylinder testing labs of HDIP provided the essential and vital facility of retesting of in-use CNG cylinders as mandatory after five years. Besides, the HDIP continued its front line role of the promoter, facilitator and advisor for the use of environment friendly CNG fuel nationally and internationally. 4.7 REGULATORY INSPECTIONS The HDIP acted as the third party inspector, on behalf of the Oil & Gas Regulatory Authority (OGRA), to ensure compliance with technical and safety standards under CNG Rules 1992. About 1078 inspections of CNG stations were made during the year. A number of LPG installations were also inspected for their compliance with technical and safety standards under LPG Rules 2001 and reports rendered to OGRA. 4.8 INFORMATION DISSEMINATION The Institute played an important role in the development of domestic energy sector by maintaining a national energy database and publishing the official national energy statistics: "Pakistan Energy Yearbook", which is the most sought after Pakistani publication among national and international energy professionals, investors and financers. The HDIP also publishes a standard research journal carrying articles relating to Pakistan in the fields of oil and gas exploration, production, processing, utilization, economics, policy and planning, named "Pakistan Journal of Hydrocarbon Research". Twenty (20) research papers were presented by scientists of HDIP at various conferences or published in scientific journals, besides a number of technical reports for the government and the industry. 4.9 INTERNATIONAL COOPERATION HDIP held the Central Secretariat of an international forum "South Asia Geological Congress (GEOSAS)", that provided a platform for promoting cooperation in research and development in the geological sciences in the South Asia region covering 10 countries, namely, Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, Sri Lanka and Turkey. HDIP also worked as the Secretariat of Pakistan National Committee of the World Energy Council (WEC). Director General HDIP was elected Chairman World Energy Council South Asia Region for 2004-07. He has also recently been elected as Chairman of the SAARC Working Group on Energy constituted on the directive of the 12th SAARC Summit held at Islamabad in January 2004. 4.10 CONCLUSION The HDIP thus worked as the scientific and technical arm of the Ministry of Petroleum & Natural Resources in the oil, gas and energy sector while at the same time facilitating private sector investment in the sector by providing professional guidance and advice. Although a public sector outfit, it performed to high professional standards and earned 46% of its budget from its own services.

Chapter - 5

COMPANIES

http://www.ogdcl.com

5.1 OIL AND GAS DEVELOPMENT COMPANY LIMITED

(OGDCL)

5.1.1 INTRODUCTION

OGDC was created in September 1961 under an Ordinance, in pursuance of an Agreement signed by GOP with USSR for financing equipments, and services of Soviet experts for exploration of oil and gas in Pakistan. During Seventies, the Corporation introduced Western technology for updating its equipment base, and undertook an aggressive work program. This resulted in discovery of a number of oil and gas fields in the Eighties, thus giving the Corporation a measure of financial independence. Consequently, the Corporation was taken off from the national budget in 1989 to operate as a self-financing entity. In 1997, as a step towards restructuring, it was incorporated as a public limited un-listed company managed by an independent Board of Directors. The Company was provisionally listed in October 2003 and put on ready board w.e.f. 19th January 2004 on all three stock exchanges of the country. It competes on a level playing field with all other local and foreign E & P companies operating in the country, for grant of exploration licences or price for it�s oil and gas. 5.1.2 COMPANY�S PROFILE i. Name and Address of the company with Telephone and Fax number

Oil & Gas Development Company Limited OGDCL House Plot No.3, F-6 / G-6, Blue Area, Jinnah Avenue, Islamabad. Tel: (PABX) (051) 9209811-8 Fax: (051) 9209804-6, 9209708

ii. Name of Chief Executive Mohammad Raziuddin

iii. Type of Company Public Limited Company

iv. Annual Turnover Net Sales for the year ending 30th June 2005 was Rs. 73.710 billion v. Profit after Tax Rs. 32.968 billion

vi. Type of Business / Manufacturing Oil & Gas Exploration and Production

vii. Auditors M/s Taseer Hadi Khalid & Co., Chartered Accountants M/s M. Yousuf Adil Saleem & Co., Chartered Accountants

viii Legal Advisor M/s Khokhar Law Chambers

ix. Bankers

1 National Bank of Pakistan 2 Habib Bank Limited 3 Askari Commercial Bank Limited 4 Allied Bank Limited 5 Citi Bank 6 United Bank Limited 7 Bank Al-Falah Limited 8 Faysal Bank Limited 9 Metropolitan Bank Limited 10 Bank of Punjab 11 Bank Al-Habib Limited 12 Standard Chartered Bank 13 Soneri Bank Limited 14 Muslim Commercial Bank Limited 15 Union Bank Limited 16 PICIC Commercial Bank Limited 17 Prime Commercial Bank Limited

x Vision

To be the leading, regional Pakistani E & P Company, recognized for its people, partnerships and performance.

xi. Mission

Our mission is to become a competitive, dynamic and growing E & P company, rapidly enhancing our reserves through world class workforce, best management practices and technology and maximizing returns to all stakeholders by capturing high value business opportunities within the country and abroad, while being a responsible corporate citizen.

5.1.3 MANAGEMENT

The OGDCL Board of Directors has been reconstituted. The composition of newly constituted Board of Directors is attached at Annex-I. Mr. Mohammad Raziuddin was appointed Managing Director by the government. Mr. Raziuddin took over charge as MD on 7th February, 2005.

5.1.4 HISTORICAL PERFORMANCE

Since inception to June 2005, OGDCL has drilled 198 exploratory wells and 246

development wells. Since its creation, OGDCL has produced about 155.09 million barrels of oil and

about 3.34 trillion cubic feet of gas upto June 2005.

5.1.5 POSITION IN THE INDUSTRY

i. Concession Portfolio

The company�s concession portfolio as on June 2005 comprises on 45,428 sq. kms, (35,463 Sq Kms onshore and 9,965 Sq Kms offshore Exploration Licence acreage, which constitute approximately 28% of the total exploration and development area granted by the Government to the petroleum

sector in the country. In addition to this the company hold 11,342.50 Sq. Kms Reconnaissance Permit)

ii. Reserves

The company holds 115.16 million barrels of oil and 10.52 TCF of gas

remaining recoverable reserves on 30th June 2005. These constitute 37% and 32% respectively of the total oil and gas reserves of the country.

iii. Production

The average production of oil and gas during 2004-05 from OGDCL operated fields was 31,350 barrels per day and 856 MMcfd per day respectively. OGDCL�s average oil production including non-operated JV�s was 39,695 barrels of oil per day and gas 1,072 MMcfd, which constitutes about 60% and 29% of the country�s total production of oil and gas respectively.

5.1.6 HUMAN RESOURCES

OGDCL has developed a highly qualified pool of professionals who can

undertake and supervise all phases of oil and gas exploration, starting from preliminary geological surveys and culminating to the operation of oil and gas processing plants. OGDCL by June 2005 had total manpower strength of 1,931 officers, 9,826 regular staff and casual/work charge are 634. Company can proudly claim of having the largest professional/technical human resource base in the country. 5.1.7 MAJOR PROJECTS

OGDCL�s major ongoing projects are as follows: -

i. Dakhni Expansion Project

Dakhni Processing Plant/Field is located at Jand District Attock Punjab. The estimated cost of the project is Rs. 1056.08 million, which includes a foreign exchange component equivalent to Rs. 630.35 million. The proposed Dakhni Expansion Project includes installation of additional Sulphur Recovery Unit (S.R.U) alteration and modification of the existing facilities to process a total of 40 MMscfd feed gas. Upon completion of the project, the production will be enhanced to the tune of sale gas 35.7 MMscfd, condensate 1370 bbls/day, Sulphur 140M. Ton/day and LPG 29 M.Ton/day Vs existing production of 18 MMcfd of gas about 700 bbls/day condensate, 10 M. Ton/day LPG and 65 M. Ton/day of sulphur. The project is expected to be completed by the financial year 2006-07.

ii. Qadirpur Expansion Project

Qadirpur gas field is the 3rd largest in the country, it was discovered in

1990. The field is located in the central Indus basin, south of Kandhkot and Sui

gas fields, the field is being operated by OGDCL and it is joint venture partner in the project whose shares are as follows:-

OGDCL 75.0% PKP 09.5% KUFPEC 08.5% PPL 07.0%

iii. Supply of Gas to SNGPL/LPL

At present the Qadirpur plant is supplying around 500

MMscfd per day of pressure gas to SNGPL since November 2004. In addition to 500 MMscfd of pressure gas is being supplied to SNGPL. Raw gas in the range of 45 to 48 MMscfd is also being supplied to SNGPL for Liberty Power Limited (LPL). iv. Chanda Project

The Chanda Project located in District Kohat of NWFP, is a joint venture with M/s Zaver Petroleum and Government Holding (Pvt) Ltd. The field has been put on regular production since 17th July, 2004 and is presently producing 3000 barrels per day oil and 10 MMcfd per day of gas. The LPG production i.e. 45 M. Tons shall be produced upon shifting/installation/commissioning of Fimkassar LPG plant at Chanda field. The commissioning of LPG plant is expected to be completed by March 2006. v. Dhodak Expansion Project

The project is located at District Dera Ghazi Khan, Punjab. The scope of work of the project is rehabilitation of Garhi Hassu LPG plant and field study for installation of Garhi Hassu LPG plant at Dhodak. The estimated cost is Rs. 1,056 million. On completion of production would increase to 1700 BPD of condensate 30 MMcfd of gas and LPG 55 M. Tons. The current status of the project is as under:-

a. The reservoir study has been updated b. Tender Documents for engagement of consultant are under preparation. c. The Consultant is expected to be engaged by the end of September,

2005 5.1.8 NEW PROJECTS

OGDCL has envisaged following new projects for implementation:- i Sinjhoro Development Project The project is located at District Sanghar, Sindh. The scope of work of the project is being worked out. It is expected that the estimated cost of project would be US$ 110 million. The project will enhance OGDCL�s production

capacity of 3500 BPD of oil, 28 MMcfd of gas and about 125 M. Tons per day of LPG. ii Tando Allah Yar Complex Project

The project is located at District Hyderabad, Sindh. The scope of work includes drilling of 6 development wells, installation of gathering & processing facilities of these wells. The project will enhance OGDCL production capacity by 1500 BPD of oil, 16 MMcfd of gas and 15 Tons per day of LPG. The estimated cost of the project works out to US$ 52 million.

iii. Uch II Project

The project is located at Uch District Nasirabad and Dera Bugti, Balochistan. The scope of project includes drilling of 15 development wells, installation of their surface facilities and installation of gas processing plant. The estimated cost of the project is US$ 250 million.

5.1.9 RESTRUCTURING Prime Minister�s directive to the Ministry of Petroleum and Natural Resources:-

�OGDCL should be restructured on professional lines. The model of Petronas should be kept in view.�

In pursuance of above directive of the Prime Minister a two member delegation of OGDCL visited Petronas Head Office in Malaysia to study their organizational structure from 2nd April to 8th April, 2005. A delegation led by Minister of State for Petroleum & Natural Resources visited Shell Headquarters in Netherlands to study the present structure of Shell. The MD also visited the Headquarters of OMV in Vienna, Austria, to apprise himself of the transformation of OMV from a state entity to an international oil company. Restructuring is planned to be completed during FY 2005-06. 5.1.10 PHYSICAL ACHIEVEMENT OGDCL�s physical performance for the year 2004-05 in comparison with 2003-04 is attached at Annex-II. 5.1.11 FINANCIAL PROGRESS The gross sales during the period under review is expected to amount Rs. 75,840 million as compared to Rs. 52,600 million during the corresponding period last financial year. Details of financial achievements during the fiscal year 2004-05 are attached at Annex-III. (Financial audit of the company�s accounts 2004-05 is presently underway).

5.1.12 OIL AND GAS DISCOVERIES

The company has made remarkable achievements during the financial year by making five commercial discoveries namely Dars West, Dakhni-8, Jhal Magsi South,

Pasakhi Deep and Chak 63 South-East. These discoveries on development will add about 1,758 barrels of oil and about 53.30 million cubic feet of gas per day, and will help the country to save foreign exchange worth US $ 144.21 million per annum. 5.1.13 OFFSHORE ACTIVITIES

OGDCL has acquired 100% Participating Interest alongwith the operatership in offshore Block-G w.e.f. 1st January 2005. OGDCL plans to undertake work in this block. Indus Delta-A Block comprising an area of 2,499 sq. kms, located in shallow waters of offshore southern part of Thar Platform, had been granted to OGDCL on 23rd October 2004. Minimum work commitment in the block entailed undertaking 215.32 work units. OGDCL plans to undertake 3D seismic acquisition in this block to find a viable prospect. 5.1.14 FUTURE PLANS & TARGETS

OGDCL�s basic objective is to help the country to achieve self sufficiency in oil

& gas resources and to provide the nation energy security. In line with this objective OGDCL has set ambitious targets for the years 2005-06 & 2006-07 which can be seen in Annex-IV.

5.1.15 FUTURE OUTLOOK

i. Steps are being taken to run OGDCL on commercial grounds such as introduction of latest technologies, business process reengineering.

ii. The company has also placed great emphasis on progressive project management concepts and fast track completion of mega projects.

iii. Ambitious exploratory program envisaged. iv. Development of discovered fields on fast-track basis. v. Aggressive production enhancement plans.

5.1.16 ENHANCEMENT OF COMPANY FROM NATIONAL EXPOSURE TO INTERNATIONAL

i. Looking at E&P opportunities and joint venture collaborations outside Pakistan in countries like Sudan, Eritrea, Libya, Egypt, Syria and Qatar.

ii. Regional alliance with companies like Petronas and medium size MNCs for joint venture exploration ventures.

iii. Swap of assets for reserves acquisition with equal percentage of working interest in international market.

Annex-I

BOARD OF DIRECTORS AS ON 30TH JUNE, 2005

1. Mr. Arshad Nasar Chairman 2. Mr. Mohammad Raziuddin MD/CEO 3. Mr. G.A. Sabri Director 4. Mr. M. Iqbal Awan Director 5. Mr. Sikandar Hayat Jamali Director 6. Mr. Pervaiz Kausar Director 7. Mr. Azam Faruque Director 8. Mr. Khalid Rafi Director 9. Mr. Asad Umar Director 10. Mr. Alman Aslam Director 11. Mr. Aslam Khaliq Director 12. Al-Syed Abdul Qadir Jamaluddin Al-Gillani Director

Annex-II

OGDCL�S COMPARATIVE / PHYSICAL PERFORMANCE

STATEMENT CURRENT VS LAST YEAR

S.No Name of activity Achievements in 2003-2004 Upto

June 2004.

Achievements in 2004-2005 Upto

June 2005

% age change

1. i) Exploratory 8 11 100 ii) Development 9 7 -20 iii) Drilling Meterage (Meter) 48,818 62,920 71 2. Production

i) Oil (US Barrels) ii) Gas (MMcft) iii) LPG (Tonnes) iv) Sulphur (Tonnes)

7,803,692 (21,380)

254,709

(698)

75,194 (206)

20,774

(57)

11,442,845

(31,350)

312,298 (856)

96,210 (264)

20,537

(56)

47

27

25

2

(i) Production from OGDCL operated fields only. (ii) Figures in brackets show daily average production.

Annex-III OGDCL

FINANCIAL ACHIEVEMENTS

YEAR 2003-04

(Rs. IN BILLION)

YEAR 2004-05 PROVISIONAL (Rs. IN BILLION)

REVENUES 52.60 75.84

PROFIT BEFORE TAX 30.50 49.48

PROFIT AFTER TAX 22.40 32.96

DIVIDEND DECLARED % 40% 47.50%

EARNING PER SHARE (Rs. ONLY) 5.21 7.66

TOTAL ASSETS 95.92 113.8

PAYMENTS TO NATIONAL EXCHEQUER 37.93 57.42

NETWORTH 76.00 83.00

Annex-IV

TARGETS OF OGDCL FOR FISCAL YEARS 2005-06 & 2006-07

Sr.No. DESCRIPTION FY 2005-06 FY 2006-07 SEISMIC (COVERAGE)

1 2D (Line Kms.) Onshore 6,311 8,000

2 3D (Sq.Kms.) Onshore 1,200 3,000

3 4D (Sq.Kms.) Onshore 300

4 2D (Line Kms.) Offshore

5 3D (Sq.Kms.) Offshore 980 1,880 EXPLORATION (WELLS)

1 Exploratory 35 58 2 Appraisal 11 20 3 Development 11 29

Sub Total 57 107 1 Offshore - 6

Grand Total 57 113 WORKOVER (WELLS)

1 With Rigs 25 24*

2 Rig Less 60 75

Grand Total 85 99

PRODUCTION 1 Crude Oil (bbls/day) - Own Fields 29,816 35,000 2 Crude Oil (bbls/day) - JV Operated 3,234 5,000

3 Crude Oil (bbls/day) - JV Non Operated 9,976 10,000 Total Crude 43,026 50,000

1 Gas (MMSCF/day)- Own Fields 589 852 2 Gas (MMSCF/day)-JV Operated 369 490 3 Gas (MMSCF/day)- JV Non Operated 242 258

Total Gas 1,200 1,600

1 LPG (M.Tons/day)-Own Fields 295 460 2 LPG (M.Tons/day)-JV Operated 14 20 3 LPG (M.Tons/day)-JV Non Operated 119 120

Total LPG 428 600 1 Sulphur (M.Tons/day)-Own Fields 60 100

* Rig confirmed for 21 wells

Contingent for 3 wells

5.1.17 PROVINCE / REGION WISE BREAK-UP OF THE OFFICERS / STAFF i. Province-wise breakup of Officers

DOMICILE BASIC PAY GROUP OR

EQUIVALENT PUNJAB SINDH NWFP BALOCHISTAN AJK FATA/FANA TOTAL

Sub-Total 1044 480 225 65 32 55 1901

ii. Province-wise breakup of Staff

Sub-Total 4961 2311 732 917 222 30 9173

iii. Province-wise breakup of Work Charge /Mandays

Sub-Total 375 193 41 4 1 17 631

Grand Total 6380 2984 1028 986 255 102 11705

5.1.18 STATEMENT OF PAYMENT OF TAXES TO GOVERNMENT AS ON 30-06-05

Particulars Rs in Million Income Tax 16,052.32 Royalty 8,109.63 Excise Duty 1,402.75 Sales Tax 10,865.16 Development Surcharge 78.72 Total 36,508.58

5.1.19 FINANCIAL HIGHLIGHTS FOR LAST FIVE YEARS (Rs in Million)

Year ended 30th June

2001 2002 2003 2004 2005

Sales Revenue 38,297 39,805 45,070 51,326 73,710 Profit before Tax 23,227 25,688 26,417 30,515 49,020 Profit after Tax 16,498 16,775 20,673 22,414 32,968

Financial Ratios

2001 2002 2003 2004 2005 Current Ratio % 3.48 5.14 6.82 12.17 4.96 Acid Test Ratio % 2.94 4.24 5.88 10.32 4.40 Selling & Distribution to Sales Revenue

% 1.01 1.33 1.41 1.07 1.03

Financial Charges to Sales Revenue

% 1.31 0.75 1.43 0.07 0.01

Earnings per Share (EPS)

Rupees 3.84 3.90 4.81 5.21 7.67

Dividend per Share Rupees 1.55 2.50 3.00 4.00 7.50 Dividend Yield % - - - 6 7 Return on Average Capital Employed

% 35 31 34 32 41

Total Assets Turnover

% 60 56 56 57 70

http://www.sngpl.com.pk

5.2 SUI NORTHERN GAS PIPELINES

LIMITED (SNGPL)

5.2.1 INTRODUCTION Sui Northern Gas Pipelines Limited (SNGPL is the largest integrated gas company in the country, engaged in the business of transmission and distribution on natural gas beside construction of high pressure transmission and low pressure distribution systems. Frontier Province (NWFP) comprising over 6,121 Km of high-pressure pipeline ranging form 6� to 36� in diameter. The distribution activities covering 728 towns and villages in the Punjab and NWFP are managed through its Regional offices. An average of about 1471 Million Cubic Feat (MMCFD) gas was sold in 2004-05 to over 2.4 Million industrial, commercial and domestic consumers in there regions through distribution network of over 42,192 km. 5.2.2 DETAILS INFORMATION ON DIFFERENT ACTIVITIES OF SNGPL DURING 2004-2005

i. Province/Sector-wise gas sales analysis for 2004-2005 Figures in MMCF

SECTOR PUNJAB NWFP TOTAL Power 207,691 0 207,691 Fertilizer 42,760 67 42827 Cement 7,281 968 8249 CNG/Transport 15,431 3,794 19225 General Industry 116670 9,855 126,525 Commercial 17,347 2,010 19,357 Domestic 98,554 14,659 113,213

TOTAL 505,734 31,353 537,087

ii. New Connections provided During 2004-05 Figures in Nos. Sector New Connections

provided Targets Achievement Vs

Targets (%) Domestic 174,306 185,000 94 Commercial 3474 3,500 99 Industrial 422 300 141 Total 178,202 94

iii. No. of Customers as on 30.6.2005 Figures in Nos. Sector PUNJAB NWFP TOTAL Domestic 2,148,424 289,117 2,437,541 Commercial 34,172 7,186 41,358 Industrial 2,931 340 3,271

Total 2,185,527 296,643 2,482,170

iv. Distribution Lines laid During 2004.05 Figures in KM�s Description PUNJAB NWFP TOTAL Mains 2,803,094 354,145 3,157,239 Services 627,927 122,277 750,204

Total 3,431,021 476,422 3,907,443

v. Distribution Net Work as on 30.6.2005 Figures in KM�s

Description PUNJAB NWFP TOTAL

Mains 27,079,554 4,708,000 31,787,554

Services 8,921,038 1,483,000 10,404,038

Total 36,000,592 6,191,000 42,191,592

vi. Transmission Net Work Laid during 2004-05 Figures in KM�s Punjab 242.46 NWFP 14.54

Sindh 87.72 Balochistan 0.00

Total: 344.72

vii. Transmission Net Work As on 30.06.2005 Figures in KM�s

Punjab 5,103.10 NWFP 537.27 Sindh 360.26

Balochistan 120.37

Total: 6,121.00

viii. Province-wise Towns and Villages As on 30.06.2005 Figures in Nos.

Province Cities/Towns Villages TOTAL Punjab 146 412 558 AJK/Federal Capital 2 3 5 NWFP 38 127 165

Total 186 542 728

ix. Summary Showing Province-Wise Break-Up of Executives and Subordinates Working in the Company as on 01.09.2005 Province Executives Subordinates Total

AJ KASHMIR 4 68 72

BALUCHISTAN 7 51 58

FANA 3 3

FATA 3 93 96

NWFP 99 1297 1396

PUNJAB 634 4883 5517

SINDH ( R ) 7 7 14

SINDH ( U ) 12 39 51

SINDH ( U ) 12 39 51

Total 766 6441 7207

x. Tax Paid During 2004-2005 Rs. In mIllion

INCOME TAX 798.00

G.S.T. 1,781.00

TOTAL 2,579.00

xi. Financial Highlights

2005

PROVISIONAL 2004

ACTUAL 2003 2002 2001

SALES-GROSS VALUE (Million rupees) 84,000 64,276 45,649 42,005 36,522 PROFIT BEFORE TAX (Million rupees) 4,000 3,664 3,207 2,764 2,329 PROFIT AFTER TAX (Million rupees) 2,700 2,297 2,014 1,886 1,337 EARNING PER SHARE (rupees) 5.50 4.60 4.03 3.78 2.68

Board of Directors

1 Mr. Altaf M. Saleem Chairman, Lahore

2

Mr. Tariq Iabal Khan, Managing Director/Chairman, National Investment Trust (NIT) Ltd., Karachi.

3

Mr. A Rashid Loan, Managing Director, Sui Northern Gas Pipelines Limited, Lahore

4

Mr. Hussain Dawood Chairman, The Dawood Group, Karachi.

5 Mr. Mohammad Naeem Malik, Director General (Gas), Islamabad

6 Mian Raza Mansha, Nishat Group of Companies, Lahore

7 Mr. M. Iqbal Awan, Finance Adviser (P&NR) Islamabad

8

Mr. Shahzada Dawood Chief Executive, Dawood Hercules Chemical Limited, Lahore

9 Mr. Arif Saeed Lahore

10

Syed Mohammad Asghar Director Dawood Hercules Chemical Limited, Lahore

11 Mr. Amanullah Sheikh Karachi

12

Mr. Qasim Rabbani, Executive Director, Invest Capital & Securities (Pvt) Ltd., Karachi.

13 Mr. Abdul Bari Khan , Chief Executive Karachi

14

Mr. Munawar B. Ahmad, Managing Director, Sui Southern Gas Company Limited, Karachi

SSGCL http://www.ssgcl.com.pk

5.3 SUI SOUTHERN GAS COMPANY LIMITED (SSGCL)

5.3.1 INTRODUCTION Sui Southern Gas Company (SSGC) is a model gas utility Company of Pakistan. The company buys natural gas in bulk from a number of gas producers transmits it toward centers and distributes it across its franchise area. The company has over 50 years of operation. It has extended its network to over 29,000 kms, consisting of 2,940 kms of high-pressure gas transmission lines and 26,370 kms of distribution lines. It delivers cleanest and most environment friendly fuel to the doorstep of over 1.77 million customers in 120 towns and more than 930 villages in Sindh & Balochistan. Nearly 2,825 industrial customers including power plants, fertilizer factories and Pakistan Steel mills use gas as fuel, in addition to over 19,000 commercial customers. Geared towards supporting the industrial and the domestic customer sectors, SSGC is focused on charting new horizons and reaching to more and more people every day. It has developed extensive expertise in the construction, operation and maintenance of the gas supply infrastructure making it fully capable to provide innovative solution and manage the most challenging gas projects not only in Pakistan but also in the regions. The use of IT and other forms of technology extends across all major functions of the company making SSGC the most IT enabled company in Pakistan. Among the recent IT initiatives, Geographic Information System or GIS, is a computer-based system that can create seamlessly integrated intelligent drawings of the pipeline network using satellite data as base-map. GIS can also be used for real-time tracking of vehicles and providing GPS connectivity to field crews. It is currently being integrated with CIS, ERP and SCADA systems, the company�s state-of-the-art on-line network monitoring system, to achieve greater efficiencies and enhanced performance standards. The Health, Safety and Environment policy of the company ensures continuous improvements in the company�s operational environment to avoid work related health hazards and accidents, and keep environmental emission and wastage of energy under control. SSGC has been awarded ISO-14001 certification on Environmental Management, and OHSAS 18001 certification on Operational Health & Safety Management. �Service with Smile�, the company�s motto, is reflective of its renewed spirit and reflects the company�s abiding commitment towards customers in providing them prompt and comprehensive service. The commitment is backed by an infrastructure, consisting of Customer Facilitation Centers (CFCs), call Centers and the Emergency Help Line 119 to ensure the delivery of quality service. 5.3.2 COMPANY PROFILE

i. Name and address of the company

Sui Southern Gas Company Limited. SSGC House, Sir Shah Suleman Raod, Gulhan-e-Iqbal Karachi-75300 Ph: 092-21-9231500 Fax: 092-21-9231554 E-mail: info@ssgc.com Website: http://www.ssgc.com.pk

ii. Name of chief executive / managing director Munawar Baseer Ahmad

iii. Type of company

Public limited company incorporated in Pakistan and listed in Karachi, Lahore & Islamabad stock exchanges.

iv. Annual Turnover

Gross sales Rs. 54,376 Millions (un-audited) for the Year ended 30th June 2005

v. Profit Before Tax

Rs. 1,813 Millions (un-audited) 30 June, 2005

vi. Type of Business The company is engaged in the following business;

a. Transmission of natural gas from producers toward centers. b. Distribution and sales of natural gas in Sindh and Balochistan

provinces. c. Manufacturing and sales of gas meters. d. Sale of gas condensate as a by-product. e. Construction contracts for laying of pipelines.

vii. Auditors

M/s Taseer Hadi Khalid & Co. - Chartered Accountants

viii. Legal Advisor M/s Haider Mota & Co. Barristers At Law & Corporate Counsellors

ix. Company Vision

To be a model utility, providing quality service by maintaining a high level of ethical and professional standards and through the optimum use of resources.

x. Mission Statement To meet the energy requirements of customers through reliable, environment-friendly and sustainable supply of natural gas, while conducting company business professionally, efficiently, ethically and with responsibility to all our stakeholders, community and the nation.

5.3.3 PROJECTS

Three major projects have been completed during fiscal 2004-05, as part of GIREP-II (Gas Infrastructure Rehabilitation & Expansion) Project Phase-II. These projects are aimed at enlarging the SSGC network to 600 new towns and villages and reach out to nearly 2.2 million customers by the year 2010. Projects completed in the last year included:

i. The 116km long 24� diameter pipeline from Hyderabad to Karachi, ii. Laying of the 1,783 meters 30� overhead pipeline across the River Indus

near Jamshoro, and iii. The 18� x 18km Abe-Gum to Much loop-line, almost entirely across the

Bolan riverbed. 5.3.4 ACHIEVEMENTS

i. GAS CONSUMPTION SECTOR-WISE In MMCF

Sind Baluchistan Total

Jul'04- June'05 Jul'04- June'05 Jul'04- June'05

Power 125,678 9,578 135,256

Cement 5,132 2 5,134

CNG 5,191 - 5,191

General Industries 99,388 226 99,614

Fertilizer 25,719 - 25,719

Commercial 7,334 500 7,834

Domestic 51,499 7,457 58,956

Net Effect of Accruals (66)

Total 319,941 17,763 337,638

ii. TRANSMISSION NETWORK (KM)

Addition Jul'04-

June'05 Cummulative as at June '05

Sindh 125 2,343

Baluchistan 32 599

Total 157 2,942

iii DISTRIBUTION NETWORK (KM) Sind Baluchistan Total Sind Baluchistan Total

From July'04 to June'05 Cummulative As at Jun'05

Mains 716 443

1,158

16,322

3,632

19,953

Services 198 53

251

4,823

973

5,796

Total 914 496

1,410

21,145

4,605

25,750

iv NO. OF GAS CUSTOMERS

As at June '05

Sind

Karachi Interior Sindh

Baluchustan

Total

Industrial 2,492 276

44

2,812

Commercial 14,221 3416

1,557

19,194

Domestic 1,256,614 370330

145,312

1,772,256

Total 1,273,327

374,022

146,913

1,794,262

v CITIES / TOWN / VILLAGES ON GAS (NO.)

As at June '05

Sind Baluchustan Total

Cities 19 7 26

Towns 79 15 94

Villages 725 205 930

Total 823 227 1050 vi. METER MANUFACTURING PERIOD/ MONTH Meter

Produced (in

numbers)

Sale of Meters

( in numbers)

Own Consumption

Karachi

Sindh & Balochistan

Outside sales to SNGPL

Others / Misc.

Total Sale

Sales Tax Paid

(Rs. in 000)

TOTAL 2004-2005 400,200 65,112 54,950 275,528 1,275 398,865 93,047 TOTAL UP TO 30-06-2004 2,956,370 698,380 413,600 4,960,413 4,145 2,979,458 680,603 CUMMU. SINCE COMMENCEMENT 3,356,570 763,492 468,550 5,235,941 5,420 3,378,323 773,650

5.3.6 TOTAL STRENGTH OF THE MANAGEMENT / EXECUTIVE NON � EXECUTIVE/STAFF AS ON 20.9.2005

Executive Staff (Included in the Establishment) 1,884 Executive Staff on Contract (Not included in the Establishment) 30 Subordinate Staff 3,243 Casual Staff 1,313 Grand Total 6,470

5.3.7 PROVINCE REGION WISE BREAK UP EXECUTIVE STAFF (INCLUDING IN THE ESTABLISHMENT)

Region Punjab Sindh NWFP Balochistan AJK FATA/FANA Total Total 108 1,616 47 111 1 1 1,884

5.3.8 EXECUTIVE STAFF ON CONTRCT (NOT INCLUDED IN THE ESTABLISHMENT)

Total 6 20 1 3 - - 30 5.3.9 SUBORDINATE STAFF

Total 342 2,343 219 265 48 26 3,243 5.3.10 PAYMENTS TO NATIONAL EXCHEQUER DURING 2004-2005 Rs. Million

Year Ended 30th June 2001 2002 2003 2004 2005 (Un-audited)

Income Tax 682 720 601 576 655

Sales Tax 3,807 4,826 5,409 7,090 8,136

Gas Development Surcharges 1,113 3,719 1,327 2,555 1,437

Total 5,602 9,265 7,337 10,221 10,228 5.3.11 SOCIAL RESPONSIBILITY & COMMUNITY DEVELOPMENT PROJECTS

i. HEALTH:

a. Contribution to AKUH Day Surgery & Imaging Building and expansion of Emergency Room

Rs.1 Million / Year for 3 years (2004 � 2006).

b. Medical camps to provide free advice & medication to the poor people in far-flung areas of Sindh & Balochistan:

Rs.0.15 Million.

ii. EDUCATION a. Adoption / contribution of Schools (Sohbatpur, Rojhan Jamali,

Baghead, Lyari) in Sindh and Balochistan: Rs. 2.6 Million. b. Adult Literacy projects with Literate Pakistan Foundation

covering 2,400 persons in 8 districts: Rs. 1.2 Million. c. The Citizen�s Foundation (TCF) Ilmathon to raise funds for

the foundation�s schools across Pakistan: Rs.0.75 Million. d. Faculty for Petroleum set up in the NED University of

Engineering in Karachi in collaboration with other corporate partners: Rs.5 Million.

e. IT Library in Umer Bashar IT University, University of Karachi: Rs.0.15 Million.

f. National Academy of Performing Arts (NAPA):Rs.0.5 Million.

15.3.12 FINANCIAL HIGHLIGHTS FOR LAST FIVE YEARS

Year Ended 30th June 2001 2002 2003 2004 2005 (Un-audited)

Sales Revenue (Rs. Million) 25,430 32,235 36,163 47,355 54,376

Profit Before Tax (Rs. Million) 1,975 2,154 2,049 1,572 1,813

Shareholder's Equity (Rs. Million) 8,711 8,998 9,304 9,348 10,512

Financial Ratios

Debt / Equity Ratio 43 : 57 42 : 58 39 :61 38 : 62 45 : 55

Current Ratio (acid test) 1.21 1.32 1.45 1.27 1.15

Interest Coverage Ratio 1.31 2.86 1.36 1.23 2.02

Transmission & Distribution cost to

Sales Revenue (%) 10.04 8.42 9.09 7.44 7.34

Financial charges to Sales Revenue (%) 4.77 2.36 2.41 1.47 1.04

Earning per Share - Basic / Diluted 1.93 2.14 2.16 1.49 1.73

Dividend Per Share (Rs.) 1.50 1.75 1.80 1.50 -

Dividend Yield (%) 15.0% 17.5% 18.0% 15.0% -

Return on Capital Employed (%) 15.67% 13.84% 13.99% 11.02% 9.49%

Fixed Assets Turnover Ratio 142% 178% 210% 271% 251% 5.3.13 INVESTMENT IN GAS DEVELOPMENT PROJECTS FOR

FY 2004-2005

Rs in Million 1) Company's own current annual development programme:

7,781

NEW TOWNS & VILLAGES 2) P.M. Directives where funds have been received 2,284 3) Tamee-e-Pakistan Programme 4) Provincial Govt's Programme 2,284 Less: GOP Grant (1,116) Company's investment in new towns/villages 1,168 Total Investment 8,949

Board of Directors

OFFICIAL 1 Mr. Aitzaz Shahbaz,

Chairman, Sui Southern Gas Company Limited, Karachi.

2 Mr. Munawar Baseer Ahmad, Managing Director, Karachi

3 Mr. Muhammad Naeem Malik Director General (Gas) Ministry of Petroleum & Islamabad

4 Mr. Muhammad Iqbal Awan Financial Advisor (P&NR) Islamabad

5 Mr. Khursheed K. Marker, Chairman, Merck Marker (Pvt) Ltd. Karachi.

6 Mr. Abdul Rashid Lone Managing Director Sui Northern Gas Pipelines Ltd. Lahore.042

7 Mr. Tariq Iqbal Khan Managing Director National Investment Trust Limited National Bank of Pakistan Bldg. (HO) Karachi

8 Mr. Muhammad Javed Khan Executive Director State Life Insurance Corporation of Pakistan Karachi

9 Mr. Qasim Rabbani

10 Mr. Sajid Zahid Joint Senior Partner, Orr, Dignam & Co. Karachi.

11 Mr. Saquib H. Shirazi Chief Executive Officer Atlas Group of Companies Atlas Honda Limited Karachi

12 Mr.Zahid Majid Lahore

13 Mr. Asif Saeed Defence Housing Authority Karachi

14 Mr. Samiullah Baloch Chief Executive Officer Baloch Construction (Pvt.) Ltd Quetta-

15 Mr. Aqeel Ahmed Nasir Company Secretary Sui Southern Gas Company Limited Karachi

http://www.psocl.com

5.4 PAKISTAN STATE OIL COMPANY

(PSOCL)

5.4.1 INTRODUCTION Pakistan State Oil (PSO) is the oil market leader in Pakistan having around 79% share of Black Oil market and around 58%* share of White Oil market. It is engaged in import, storage, distribution and marketing of various petroleum products, including Mogas, HSD, Fuel Oil, Jet Fuel, LDO, SKO, petro-chemicals, LPG and CNG. This blue chip company, the winner of �KSE Top Companies Award� and a member of World Economic Forum, has been a popular topic of case studies in Pakistan and abroad based on its radical corporate transformation over the last few years. 5.4.2 COMPANY PROFILE i. Name and address of the company with telephone and fax

numbers: Pakistan State Oil Company Limited PSO House, Khayaban-e-Iqbal, Clifton, Karachi-75600 � Pakistan Tele: 9203866-90 Fax: 9203835

ii. Name of Managing Director/CEO Mr. Jalees Ahmed Siddiqi iii. Nature of Business Oil marketing iv. Annual turnover Gross sales of Rs 254 billion during the year ending 30th June 2005 v. Profit after tax Rs 5,689 million for the year ending 30th June 2005 vi. Auditors

A.F. Ferguson & Co. Ford Rhodes Sidat Hyder & Co.

vii. Legal advisors Orr Dignam & Co. viii. Bankers

1 ABN Amro Bank N.V. 2 Allied Bank of Pakistan Limited 3 American Express Bank Limited 4 Askari Commercial Bank Limited 5 Bank Al-Habib Limited 6 Bank Al-Falah Limited 7 Citibank, N.A. 8 Deutsche Bank AG 9 Faysal Bank Limited 10 Habib Bank AG Zurich 11 Habib Bank Limited 12 Meezan Bank Limited 13 Muslim Commercial Bank Limited 14 National Bank of Pakistan 15 Standard Chartered Bank 16 The Hong Kong & Shanghai

Banking Corporation Limited 17 Union Bank Limited 18 United Bank Limited

5.4.3 EXCELLENCE IN CUSTOMER SERVICE PSO serves a wide range of customers throughout Pakistan, including retail, industrial, aviation, marine, and government/defence sectors. Professionals at PSO strive for providing unmatched and diverse services to the customers in line with best international practices. PSO�s state-of-the-art New Vision retail outlets are equipped with the most modern facilities, including auto car wash, electronic dispensing units, convenience stores, business centers and internet facilities. PSO has a network of over 108 convenience stores and SHOP Stops throughout the country. Also as part of its Retail Automation Programme, PSO installed Pump Controllers at the NVROs to automate flow of transaction data from fuel-dispensing unit to the Point of Sale terminal. . PSO launched Green XL Plus Diesel and Premier XL Gasoline, to deliver high value to customers at no additional cost in terms of improved engine performance, fuel economy and reduced noise and air pollution. The Quick Oil Lube Vans introduced by PSO, provide the lube change facilities at customers� doorsteps. Twenty-one ISO 9000 certified Mobile Quality Testing Units ensure top of the line quality of products and services. In addition to the launch of Loyalty Card, Corporate Card, Fleet Card and Prepaid Card, PSO has made collaborative arrangement with banks offering 0% service charge on use of Visa, Master card, and AMEX card for fueling at PSO retail outlets.

For efficient handling of customer complaints, queries and suggestions, PSO has developed 24-hour Customer Service Center, furbished with a toll free telephone number (0800-03000) and state-of-the-art Customer Relationship Management (CRM) module. An attractive and comprehensive PSO website (www.psocl.com) is available as a source of PSO-related news and information. 5.4.4 TOTAL QUALITY CONTROL PSO has been meeting the country�s fuel needs by merging sound business sense with national obligation. In order to satisfy the customers� needs while ensuring the highest quality of products and services, PSO has introduced total quality management system in its operational activities. Consistent conformance to prescribed standards and specifications across the whole range of activities from receipt, storage, transportation and delivery of products is the cornerstone of PSO�s quality management system. In addition to quality assurance in upkeep and maintenance of existing facilities, compliance with quality standards is ensured in construction of new facilities across the country.

* Excluding JP-1 export to Afghanistan

5.4.5 HEALTH, SAFETY AND ENVIRONMENT Ensuring the health and safety of PSO employees, contractors, customers and members of public likely to be affected by the Company�s operations is one of the basic corporate objectives, and as a priority it ranks equally with market share and profit. Accordingly, it is the Company�s policy to perform work in the safest practicable manner, consistent with best industrial practices while adhering completely to the requirements of health and safety codes and practices. The Company�s Health, Safety & Environment (HSE) Steering Committee monitors HSE compliance on regular basis while HSE Site Committees ensure that HSE Requirements are met at all operating locations, including Depots, Terminals, Plants, Retail Outlets and Airports. PSO is the

first OMC in Pakistan to install gas leak detectors at CNG Stations and obtain ISO 9001: 2000 certification of company operated retail outlets. PSO has also received ISO 9001:2000 Certification of the retail divisions and ISO 14000 certification of Keamari Terminal C. Use of relevant safety equipment at work is mandatory for employees. Regular HSE audit of facilities and HSE training of relevant staff is carried out and commissioning of new facilities is subject to HSE clearance. Adequate resources are made available to ensure the success of HSE policy. 5.4.6 REFORM OF CORPORATE GOVERNANCE PSO�s comprehensive and far-reaching corporate renewal programme resulting in a dramatic corporate transformation has been widely appreciated at various national and international forums, by world�s leading consulting and financial advisory firms and by leading educational institutions. This programme covers the revamping of the organizational architecture, rationalization of staff, employee empowerment and development, and efficiency and transparency in decision-making through Cross-Functional Teams. PSO�s corporate structure has evolved into a matrix, which has divided the Company�s major operations into independent activities supported by the financial, legal, information and other services. These activities operate in an autonomous and collegial manner in the form of Strategic Business Units based on the clear and transparent allocation of responsibility and accountability. This structural change has been reinforced and related checks and balances have been established by putting in place several corporate monitoring and control systems. One of the top priority areas of PSO�s corporate reform is Human Resource Development. The Company has undertaken several initiatives to ensure induction and training of professionals with the objective of ensuring high level of professionalism and productivity at all levels of its employees. 5.4.7 VISION To excel in delivering value to customers as an innovative and dynamic energy company that gets to the future first. 5.4.8 MISSION STATEMENT We are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers, based on:

i. Professionally trained, high quality, motivated workforce, working as a

team in an environment, which recognizes and rewards performance, innovation and creativity, and provides for personal growth and development

ii. Lowest cost operations and assured access to long-term and cost-effective supply sources

iii. Sustained growth in earnings in real terms

iv. Highly ethical, safe, environment friendly and socially responsible business practices

5.4.9 VALUES

i. Excellence Passion for Customers, Total Quality Management, Corporate Leadership

ii. Cohesiveness Teamwork, Effective Communication

iii. Respect Respect for Individuals, Valuing Contribution, Equal Opportunity

iv. Integrity Business Ethics, Honesty

v. Innovation Creative ideas, New products and processes

vi. Corporate Responsibility Health, Safety, Environment, Community Development

5.4.10 TOTAL STRENGTH OF STAFF i. Province/region-wise break up of staff

Sindh Urban 386 Sindh Rural 116 Punjab 236 NWFP 88 Balochistan 12 FATA 3 AJ&K 3 Others 1

TOTAL 845 ii. Category/post-wise break up of staff

ED/MD 4 I 7 II 19 III 42 IV 105 V 236 VI 308

VII 124 TOTAL 845

iii. Break up of regular/contractual staff

Regular-Management 845

Regular- Non-Management 1107

Contract 201 5.4.11 PROGRESS ON ANNUAL GOALS FOR FINANCIAL YEAR 2004-05

TARGET 2004-05 ACTUALS 2004-05

Product Volume Market Share Volume Market Share

('000 MTs) (%) ('000 MTs) (%)

White Oil

MOGAS 644 44.0% 594 44.7%

HSD 4,725 61.0% 4,624 59.8%

SKO 164 73.0% 162 69.7%

JP-1* 452 61.5% 445 63.0%

Sub-Total 5,985 58.2% 5,825 58.3%

Black Oil

LDO 151 75.0% 116 71.4%

FO 2,914 75.0% 3,650 79.5%

Sub-Total 3,065 75.0% 3,766 79.2%

Lubes 48 40.0% 49 36.5%

LPG 24 28.2% 16 23.0%

CNG 112 45.8% 104 46.8%

Chemicals 22 100.0% 19 100.0% Market Share represents PSO's share in OMCs-served market

* Excluding JP-1 export to Afghanistan 5.4.12 SALES PERFORMANCE PSO has ended FY05 as a market leader in all the major POL products, PSO sold approximately 9.7 million tons of POL products. PSO displayed a remarkable growth in White Oil (Motor Gasoline, Diesel, Kerosene and JP-1*), registering a growth of 4.4% against the industry growth of 5.5%. White Oil consumption represents economic activity of Pakistan. The motor gasoline sales volume of PSO grew by 7.5% against the industry growth of 5.3%. The market share in Mogas grew to 44.7% (up by 0.9% over preceding year�s market share). The HSD sales volume grew by 4.3% against the industry growth of 5.5% registering a market share of 59.8%. PSO displayed a growth of approximately 10.7% in JP-1 (domestic) sales as compared to the industry growth of 12.4% thus recorded a market share of 63%.

Black Oil (Fuel Oil, Light Diesel Oil) showed a positive change in FY 05 and registered an industry growth of 21.2%, against which PSO�s sales grew by 30.7%. FO volume of PSO increased by 33.8% against the industry growth of 23.4% thus recording a market share of 79.5%. Kerosene and Light Diesel Oil (LDO) showed a negative growth over last year due to the availability of substitute fuels. Since PSO has the largest market share of these products, the impact of declining industry consumption has affected the most to PSO in terms of volume and market share.

5.4.13 NEW VISION PROGRAMME New Vision Retail Outlets (NVROs) were expanded with the addition of 250 outlets making a grand total of 1,250 sites for FY 05. CNG facilities were also increased to 145 in FY 05. PSO has undertaken an ambitious and far-reaching programme for provision of state-of-the-art facilities along with the service of international standard to its customers through development of New Vision Retail Outlets. Such outlets are equipped with the most modern facilities, including auto car wash, electronic dispensing units, convenience stores, business centers, internet facilities and Easy Payment Centers for payment of utility and Citibank credit card bills. In addition, continuing with its innovative technological thrust, Retail Automation has been provided at 1,034 NVROs in FY 05.

5.4.14 PSO FUEL CARDS PSO continues to outshine its competitors in the innovative cards business by expanding cards infrastructure coverage to 162 cities with 1,110 POS terminals. The company has customer base of 2,650 entities having more than 35,000 Fleet and Corporate cards. PSO signed a Corporate MOU with Mobilink and successfully launched a co-branded PSO-UBL Road Miles card during the year.

5.4.15 TOTAL QUALITY MANAGEMENT In FY 2005, Retail Head Office with all 14 divisions, Aviation & Marine offices with eight aviation stations, Industrial Consumer with three divisions and Operations department�s three storage facilities were awarded the ISO 9001:2000 certifications. The company also installed state-of-the-art ABB (Automatic Batch Blending), SMB (Simultaneous Metering Blending) at Lubricants Manufacturing Terminal (LMT) Korangi, to achieve consistent quality and efficient manufacturing of all grades of lubricants.

5.4.16 INFORMARTION TECHNOLOGY FY 2005 has been a year of digitization and the company has set a new benchmark in South Asia with the automation of over 1000 New Vision Retail Outlets to provide its customers with better and more secure retail services. In FY 05, transformation process across all the functions of PSO has been completed for SAP implementation. This will mark the successful implementation of SAP involving the setup of financial, human resource, inventory, and sales and distribution modules.

5.4.17 FINANCIAL RESULTS PSO�s sound business practices and work efficiency translated into bottom-line financial performance. PSO�s sales revenue during FY 05 stood at Rs 254 billion. The company earned highest-ever profit before tax of Rs 9.2 billion up by 47%, while the profit after tax reached the staggering figure of Rs 5.7 billion, up by 35% over FY 04.

Based on this remarkable financial performance the company announced a cash dividend of Rs 10 per share (100%) to its shareholders, resulting in total dividend of 260% for the whole year, as against 175% cash dividend declared during the preceding year. The total cash payout comes out to be an unprecedented amount of Rs 4.5 billion as compared to the preceding year�s cash payout of Rs 3.0 billion (an increase of Rs 1.5 billion).

5.4.18 AWARDS AND RECOGNITION FY 2005 has been marked by national and global recognition of PSO�s corporate transformation and strategic development. The company actively pursued its strategic objective of participating in and contributing to broader strategic development through various initiatives. CEO of the World Economic Forum officially commended PSO�s professional contributions to global initiatives and work streams of the Forum. PSO signed the global accord on Partnering Against Corruption along with other leading organizations committed to ethical and transparent business practices. Based on evaluation of the companies (local and multinational) operating in Pakistan, PSO received both main awards in the area of Corporate Strategy -�Strategic Leadership Award� and �Professional Excellence Award�- established by Allama Iqbal Open University (Islamabad) and Commonwealth of Learning (Vancouver, Canada). In addition, PSO received MAP�s ��Management Excellence Award�, NFEH�s �Annual Environment Excellence Award�, �KSE Top Companies Award� and �AAA� rating by PACRA. PSO also achieved a distinction of citation among best international practices in this year�s Global Corporate Citizenship Initiatives (GCCI) report, jointly produced by the World Economic Forum, Switzerland; The Prince of Wales International Business Leaders� Forum, UK; and the Kennedy School of Harvard University, USA. 5.4.19 GOALS/TARGETS FOR FINANCIAL YEAR 2005-06

Product Volume Market Share

('000 MTs) (%) White Oil MOGAS 626 45.0% HSD 4,900 60.5% SKO 142 70.0% JP-1 558 59.0%

Export 100 45.5% Domestic 458 63.1%

Sub-Total 6,226 58.4%

Black Oil LDO 103 71.3% FO 2,880 80.0% Sub-Total 2,983 79.7% Lubes 52 38.0% LPG 28 28.0% CNG 137 30.0%* Chemicals 20 43.0%* Market Share represents PSO's share in OMCs-served market * Market Share based on PSO's share in total industry

5.4.20 MAIN OBJECTIVES AND STRATEGIES FOR FINANCIAL YEAR 2005-06

i. HSE compliance and quality assurance through audit of 250 NVROs, environmental risk assessment and ISO certification.

ii. Sales promotion schemes in collaboration with dealers, addition of 200 New Vision retail outlets and 30 CNG Stations.

iii. Augmentation and enrichment of PSO Cards portfolio, including launch of �PSO Privileged Loyalty Card� and �Supplementary Card� for Corporate Card holders.

iv. Automation of retail operations by implementing online Order Management System, Automated Price Change Units and merchandize bar coding.

v. Production and supply of 53,000 MT of Lubricants, road shows and high street promotion programs to capture niche market.

vi. JP-1 sale enhancement through optimization of efforts on scheduled airlines, technical landing, and export business.

vii. Retention of contractual business of Defence, Railways and private enterprises based on high quality of product and service.

viii. Infrastructure development, including provision of product handling facility for MG at Mehmoodkot and for LDO at Lalpir, and installation of SAAB Tank Radar Gauges and CCTV at various depots.

ix. Addition of 800 pilfer-proof, satellite-tracked tank lorries and introduction of fleet management system at Faqirabad, Tarujabba and Chakpirana.

x. Implementation of SAP across the company, including Phase-II modules, plant maintenance, product planning, business information warehouse as well as establishment of SAP Core Competency Centre and development of zonal network monitoring and technical support system.

xi. Human resource development through efficient resource allocation, training and skill development programmes.

xii. Fulfillment of corporate social responsibility towards internal and external stakeholders, including implementation of education, health and community support programmes.

5.4.21 CORPORATE SOCIAL RESPONSIBILITY

PSO is highly committed to fulfillment of its corporate social responsibility and believes that the benefits of the Company�s progress and financial gains must flow down to public at large upto the grassroots levels, particularly to the under-privileged and deprived sections of the populace irrespective of ethnicity, caste and creed.

PSO has undertaken a wide range of initiatives to support several social, health-care, environment and educational programs. Such initiatives include instituting gold medals, cash awards and scholarships for top students of leading professional institutes, providing computer training to students and other residents of Badin district in rural Sindh province through a well facilitated training institute established for this purpose, providing moral and financial support in form of donation on compassionate basis to charitable institutions, installing direction signs and traffic signals at major streets and thoroughfares, supporting Citizen Police Liaison Committee and sponsoring road awareness programmes like Karavan Karachi for the children. PSO is the first Pakistani company to launch a major corporate responsibility initiative in the form of PSO Life Long e-Learning Project, under which PSO, in collaboration with UNIDO, exclusively sponsors e-Learning Cards for promoting training & skill development of meritorious individuals. 5.4.22 PAYMENT TO NATIONAL EXCHEQUER

(Rs in million) FY 2004-05

Sales Tax 32,673 Levies 4,240 Income Tax 1,580 Workers' Profit Participation Fund 330

TOTAL 38,823 5.4.23 FINANCIAL HIGHLIGHTS FOR LAST FIVE YEARS

Year ended 30th June Rs. Million (unless noted)

2005 2004 2003 2002 2001 Sales Revenue 253,777 195,130 206,376 182,323 195,039 Marketing & Administration Expenses 3,219 2,654 2,465 1,907 2,065 Profit before tax 9,226 6,263 6,209 5,137 3,451 Profit after tax 5,689 4,212 4,030 3,188 2,251

Capital Expenditure 1,506 2,096 1,643 1,430 1,254 Shareholders' Equity 17,313 15,446 14,264 12,396 10,666

No. of shares Outstanding (in million) 172 172 172 143 143

PROFITABILITY Gross Profit Ratio (%) 5.4 4.7 4.3 3.7 3.3

Net Profit Ratio (%) 2.2 2.2 2.0 1.7 1.2

Return on Shareholders' Equity (%) 32.9 27.3 28.3 25.7 21.1 Return on Capital Employed (%) 12.1 10.8 13.8 12.1 9.0 Return on total assets (%) 10.9 9.9 12.5 9.7 7.5

ASSET UTILIZATION

Inventory turnover ratio (x) 11.2 13.1 19.7 18.7 18.5 Debtor turnover ratio (x) 39.9 40.1 25.9 22.5 21.5

Total asset turnover ratio (x) 5.4 5.2 6.3 5.8 6.4 Fixed asset turnover ratio (x) 31.7 27.5 34.8 36.3 45.8

INVESTMENT

Earning per share (Rs.) 33.2 24.6 23.5 18.6 15.8 Market value per share (Rs.) 386.0 256.8 228.4 140.0 132.5

Price Earning per share (x) 11.6 10.4 9.7 7.5 8.4 Dividend per share (Rs.) 26.0 17.5 16.0 13.0 10.0

Bonus shares (%) - - - 20 -

LEVERAGE

Interest Cover Ratio (x) 26.0 34.1 23.6 10.0 10.3

Current Ratio 1.24:1 1.25:1 1.25:1 1.20:1 1.28:1

VALUE ADDITION

Employees as remuneration 1,870 1,474 1,403 990 1,292 Government as taxes 38,823 50,942 53,699 45,946 52,933

Shareholders as dividends 4,459 3,002 2,744 1,858 1,429

Retained within the business 1,230 1,210 1,290 1,040 820

Board of Management

1 Mr. Shaukat Hayat Durrani Additional Secretary, Ministry of Petroleum & Natural Resources

2 Mr. Mohammad Iqbal Awan Financial Advisor, Ministry of Petroleum & Natural Resources

3 Mr. Jalees Ahmed Siddiqi Managing Director & CEO, PSOCL

4 Mr. Tariq Iqbal Khan Chairman & Managing Director, National Investment Trust Limited

5 Mr. Istaqbal Mehdi Managing Director, Pak Kuwait Investment Company

6 Mr. Pervaiz Kausar Chairman BOM

7 Mr. Tariq Kirmani Member BOM, Chairman, Pakistan International Airlines Corporation (PIAC)

8 Mr. Kamran Mirza Member BOM, Chairman & Managing Director, Abbott Laboratories Pakistan Limited

9 Mr. Muhammad Yasin Malik Member BOM, Chairman, Hilton Pharma

10 Mr. Arshad Said Member BOM, Former Senior Executive, Shell Pakistan

http://www.mpnr.gov.pk/ppl

5.5 PAKISTAN PETROLEUM LIMITED (PPL)

5.5.1 INTRODUCTION Pakistan Petroleum Ltd is Pakistan's Premier E&P Company. The one of the oldest and largest Exploration and Production Company of the Country was incorporated on 5th June 1950, subsequent to the promulgation of the Pakistan Petroleum Production Rules, 1949 with the main objective of conducting exploration, development and production of Pakistan's oil and natural gas resources. PPL inherited all the assets and liabilities of the Burmah Oil Company (Pakistan Concessions) Limited and commenced business on 1st July 1952. Major production operations of the company are centered at Sui Gas Field, the largest ever gas discovery in Pakistan. Other areas of operations include Kandhkot Gas Field, Mazarani Gas Field and Adhi Gas/ Condensate Field. The Company has also working interest in Qadirpur Gas Field, operated by OGDCL, Miano and Sawan Gas Fields operated by OMV and Block � 22 operated by Petroleum Exploration (Pvt) Limited. Within the Tal Block, a Joint Venture operated by MOL significant discovery of gas and condensate from three reservoirs in the Manzalai structure was made in December 2002. An Extended Well Test (EWT) of the discovery well Manzalai-1 commenced in January, 2005 to evaluate sustained deliverability and Field potential. The second exploratory well drilled within the Tal Block on Makori structure also made a discovery. It is planned to install Early Production Facility (EPF) with commencement of production by end of the year 2005. Efforts to enhance the Company�s hydrocarbon reserves� portfolio have gained unprecedented momentum with a portfolio of 15 licenses including 9 PPL operated and 6 partner operated exploration blocks. The Company also operates a Baryte mine in Balochistan province in Joint Venture with the Balochistan Government. It produces oil well drilling grade Baryte powder from the mine, which has proven reserves of 1.25 million tones. For the year 2004-05, PPL's share of average production from its operated and non-operated fields was 958 MMscfd of gas, 1,404 BPD of oil/NGL and 25 tones per day of LPG. The gas, LPG and NGL production from PPL operated and non-operated fields for the year 2004-05 in terms of oil equivalent, was about 174,000 barrels of oil per day resulting in the foreign exchange saving of around US$ 2.5 billion for the current year assuming an average price of US$40 per barrel. The Company has a regular staff of about 2,557 as at 30 June 2005 including 430 qualified technical staff in the fields of engineering, computer and earth sciences. PPL has well established IT department and most staff in the Head Office has access to computers and are interconnected through Local Area Network (LAN). The Wide Area Network (WAN) has also been established connecting PPL's three major producing fields and Representative Office in Islamabad with the Head Office at Karachi. The Company has implemented SAP in 2004 integrating its core business processes. The Government of Pakistan (GoP) in September 1997 purchased the entire equity interest of Burmah Castrol PLC, formerly Burmah Oil Company, in the Company (comprising 21 million ordinary shares of Rs.10 each) representing 63.91 percent of the Share Capital thereby increasing its holding in the Company to 93.35 percent. Subsequent to June 2004, the GoP has disinvested a portion of its equity in the Company equivalent to 15% of the paid up share capital of (i.e. 102.875 million shares of Rs.10

each) through an Initial Public Offering (IPO). GoP Currently holds 78.35 percent of the Company's equity. GoP is in the process of offloading its majority holding in the Company equivalent to 51% of the paid up share capital with Management control to a Strategic Investor. A consortium led by Merril Lynch International and KASB Securities (Pvt) Limited have been appointed by GoP as the Financial Advisor (FA) for the strategic sale. The consortium also consists of Herbert Smith LLP (International Legal Consultants), Haidermota & Co. (Local Legal Consultants), Blackwatch Petroleum Services Limited (Technical Consultants) and Ford Rhodes Sidat Hyder & Co. (Accounting and Tax Consultants) to assist FA in the successful conclusion of the transaction. The Privatization Commission had invited Expression of the Interest in February, 2005 and by the last date for the submission of Statement of Qualification eleven (11) Companies have submitted the Statement of Qualification out of which four have been pre-qualified by the Privatization Commission (PC) to proceed further while prequalification of the two is conditional. The PC plans to conclude the Transaction in the last quarter of 2005. 5.5.2 COMPANY PROFILE

i. Name and address of the company with telephone and fax number Pakistan Petroleum Limited (PPL)

PIDC House Dr Ziauddin Ahmed Road, Karachi Tel: 111 568 568, Fax: 5680005

ii. Name of the Chief Executive Mr. Munsif Raza � Chief Executive and Managing Director

iii. Type of Company Pakistan Petroleum Limited (PPL) was incorporated in 1950 with the main objectives of conducting exploration, development and production of oil and natural gas resources.

iv. Annual Turnover Net sales for the year ended 30 June 2005 was Rs.23.3 billion. v. Oil and Gas Reserves (PPL Share) as on June 30, 2005

Gas: 4.692 Tcf Oil: 20.982 BBL LPG: 363 Thousand Tonnes

vi. Type of business / manufacturing

PPL is one of the oldest and pioneer exploration and production company in Pakistan with the main objective of conducting exploration, development and production of Pakistan�s oil and natural gas resources and has been actively involved in the augmentation of indigenous hydrocarbon resources.

vii. Auditors M/s Ford Rhodes Sidat Hyder & Co viii. Legal Advisors Surridge & Beecheno Orr, Dignam & Co. ix. Bankers

1 ABN Amro Bank 2 Askari Commercial Bank Ltd 3 Bank Al Falah 4 Bank Al Habib 5 Citibank 6 Deutsche Bank 7 Faysal Bank Limited 8 Standard Chartered Bank 9 Habib Bank Limited 10 Muslim Commercial Bank Limited 11 United Bank Limited 12 Inter Bank

5.5.3 VISION

Our vision is to maintain PPL�s position as the premier producer of hydrocarbons in the country and at the same time make a strategic transition to become an international company, exploiting oil and gas resources beyond the borders of Pakistan, resulting in value addition to shareholders� investment and to the nation as a whole. 5.5.4 MISSION STATEMENT Our mission is to optimize hydrocarbon production and pursue an aggressive exploration programme in the most efficient manner on the local as well as international horizons through a team of professionals utilizing the latest developments in the exploration and production technology and maintaining the highest standards of health, safety and environment. 5.5.5 GOALS / TARGETS FOR FINANCIAL YEAR 2005-06 The Company�s exploration strategy is aimed at replenishing and if possible, increasing its existing petroleum reserves. The availability of prospective open areas in Pakistan is limited as most of the low to medium risk / cost areas are already held under concessions and generally, medium to high risk / cost areas are left in open acreages. Therefore, the Company is also gradually venturing into relatively unexplored medium to high risk / cost frontier areas along with continuing exploration in the available open areas within the country. At the same time a strategy is being formulated to select International new business opportunities.

The Company plans to acquire a manageable portfolio of both operated and non-operated exploration blocks and maintain about 8-10 operated and similar number of non-operated areas. The Company presently holds working interest in seven operated onshore and two offshore blocks; and is also joint venture partner in six partner-operated blocks. It is also planned to drill about 100 wells (out of which 53 are planned as operated wells) in the next ten years in order to compete in the dynamic exploration environment of the

country with a view to achieve the Company�s objective of replenishment, and if possible, enhancement of its depleting hydrocarbon reserves.

Pursuing the above strategy, new venture evaluation of all of the sedimentary basins of the country is continuing. This effort is not limited to open areas only, but exploration acreage held by other companies, both onshore and offshore, are continuously being evaluated. For this purpose a dedicated team of geologists and geophysicists has been formed. This team has evaluated over 30 existing Blocks during last year.

PPL has recently signed a Farm-out Agreement with Shell for 20% participation in ultra deep offshore Indus Block �E�, where a well is planned to be drilled in 2nd Quarter of the year 2006. The Company is also seeking partnership in other offshore opportunities. Besides, the Company has also applied for exploration license over Offshore Indus Block �Q� as well as Onshore Baska Block (Ex-Block 34).

Exploration activities are also being undertaken in producing fields in terms of seismic and drilling to delineate and appraise deeper / additional prospects i.e. Pab, Lower Goru horizons in Sui, Sakesar and sub-thrust formations in Adhi and Mazarani and reservoir extension in Miano and Sawan fields.

5.5.6 INTERNATIONAL EXPLORATION

In addition to continuing with exploration efforts within the country, PPL plans to embark upon the evaluation of international new business opportunities, both in the direction of new venture exploration, as well as, buying undeveloped and developed reserves. This will enable the Company to secure additional reserves, which would also benefit the country in earning valuable foreign exchange.

As a first step favourite world regions have been identified. These regions do not necessarily fall in the best petroleum yield category, which usually invite high competition and big players in spite of implicit high risk, high cost. The relatively less explored regions with favorable commercial terms, low exposure and stable geopolitical conditions are also being given due preference as part of our international strategy.

5.5.7 HUMAN RESOURCE

The most valuable resource of Pakistan Petroleum Limited (PPL) is it�s over 2500 employees, contributing towards the Company's vision and objectives in their assigned roles. While part of the staff are working in Head office at Karachi, a majority are busy converting the Company's vision into reality at various field locations. Aligning the diverse needs of staff with the Company's production, profit and growth objectives is one of the core functions of the PPL's Human Resource team.

5.5.8 INFORMATION TECHNOLOGY

The Company successfully launched its website to make available and continuously update useful Company information to its users at large.

The Company stays committed to the ongoing improvement of its Business Processes and the achievement of resource efficiencies in line with industry best practices. To this effect SAP Enterprise Resource Planning (ERP) System reconfiguration is being planned to maximise utility from the available features of this world leading ERP System. The in-house SAP Customer Support Centre will also be implemented during this phase to ensure that users are able to fully benefit from and further develop the powerful report generation and scrutiny facilities offered by the system. To promote electronic information sharing and a �paperless office� culture, implementation of centralized portal is also underway

IT Infrastructure is being enhanced at different locations to provide fast, efficient, reliable and secure service. To enhance overall network efficiency and related security and access controls various risk mitigation measures are being undertaken which includes implementation of centralized policies and effective anti-viruses and anti-spamming controls. A warm site is under development while alternate networks are in the planning stage to further enhance network deliverability and assist with the Company's IT Site Disaster Recovery Plan. 5.5.9 FINANCE AND ACCOUNTS PPL has shown consistent growth in sales, operating profitability and cash flow generation in recent years and the current year was no exception. This has been possible due to multitude of factors including higher international crude oil prices; the phased price increase under the Sui and Kandhkot Gas Price Agreement 2002 supplemented by increase in sales volumes particularly from Sawan, Kandhkot, Qadirpur and Tal resulting in a 32% growth in turnover to Rs 23.3 billion. The Company has posted the highest ever profit after tax of Rs 8.6 billion, an improvement of 30% over last year. The earnings per share is Rs 12.57 as compared to Rs 9.65 in 2003-04.

5.5.10 FOREIGN EXCHANGE SAVINGS AND GOVERNMENT REVENUES

PPL contributes significantly to the national economy. The Company�s share of production of natural gas from its operated and non-operated fields, and production of Oil, LPG and NGL from Adhi Field for the financial year 2004-05 in terms of energy, was equivalent to 174,000 barrels of crude oil per day resulting in foreign exchange saving of around US$ 2.5 billion for the current year assuming an average crude oil price of US$ 40 per barrel. In addition, payments to the Government exchequer by the Company was around Rs 18.075 billion during the year on account of taxes, royalties, excise duty, sales tax, gas development surcharge and dividend.

5.5.11 SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT

The Company has been vigorously playing its role as a responsible corporate citizen and continues to contribute in development of human capital and infrastructure. During the year the Company has successfully planned and undertook community

development projects focusing mainly on health care, education and water supply both under the provisions of Petroleum Concession Agreements and by PPL Welfare Trust at different places throughout the country. The projects were aimed at enhancing the quality of life of the individual and community at large and reflected PPL�s resolve to contribute and play an active role for the well being of the local populace. Some of the major Corporate Social Responsibility initiatives undertaken by the Company are as follows:

i. Managing and operating Sui Hospital which is equipped with modern

facilities including Casualty and Children's Wards, X-Ray, Laboratory, Surgical Unit and Blood Bank. It has been providing valuable services to the people for the past many decades.

ii. Supply of potable water to the general population of Sui from PPL's water supply source, located at about 60 km near Guddu.

iii. Managing and operating Sui Model School where more than 2,800 students study. It offers education to the local populace up to higher secondary.

iv. Provision of free gas to the entire town of Sui v. Established Mobile Medical Unit at Mazarani Gas Field that provides free

medical treatment and medicines to the communities vi. Establishment of a building for Taleem Foundation School and a Computer

Training Centre and Reading Room-cum-Library building at Sui. vii. Constructed Library building and provided books, furniture and computers

for Library, Government Inter College, Dera Bugti viii. Constructed Classrooms in 5-Schools of District Attock and 4-Schools of

Gawadar & Pasni ix. Upgrade Basic Health Unit at Naushera in District Bolan, Balochistan and

provision of two ambulances to the District Administration, Bolan

PPL never remained limited to its obligations rather under an open heart policy responded immediately and appropriately to calls from the distressed and needy and took initiatives in discharging its social responsibilities in the following areas:

i. Donation to the Government of Pakistan for the victims of the Tsunami ii. Donation of medicines for Lashminiasis patients to District Shahdadkot

iii. Donation of relief goods to the flood affectees of Gwadar in Balochistan iv. Active participation in the relief operations in Gwadar

In addition PPL has contributed substantial sums for support and assistance of new initiatives by leading and prestigious names in the healthcare and education. The construction of Oncology Service Building at Agha Khan Hospital which houses the modern state-of-the-art comprehensive care centre facility for cancer treatment and establishment of Petroleum Engineering Program at NED University of Engineering and Technology, Karachi and establishment of a standalone School of Science and Engineering for starting undergraduate programs having separate school faculty at Lahore University of Management and Sciences, all carry PPL support and financial assistance.

PAKISTAN PETROLEUM LIMITED PRODUCTION VOLUMES

DURING THE YEAR 2004-05

Fields PPL's share % PRODUCTION VOLUMES

NATURAL GAS MMcfd PPL Operated Sui 100 664 Kandhkot 100 104 Adhi 39 8 Mazarani 87.50 10 Partner Operated Qadirpur 7 36 Block-22 35.526 6 Miano 15.158 25 Sawan 26.184 101 Tal 27.763 4 Total per day 958 MBOE per day 172 OTHER PRODUCTS (Annual Production) Crude Oil / Natural Gas Liquid (BBL) 512,561 Liquefied Petroleum Gas (Tonnes) 9,089

PAKISTAN PETROLEUM LIMITED EXPLORATION ACTIVITIES DURING THE YEAR 2004-05

For the Year 2004-05

G&A

Seismic Survey Acquried (A) / Purchased (P)

Process (P) / Reprocess (R) / Interpretation Activity

2D Line

Km. 3D Sq. Km.

2D Line Km. 3D Sq. Km.

No. of Explorator

y Wells

PPL Operated Blocks Block 2462-1 (Pasni) & Block 2462-4 (Offshore Makran Central) - - - - - 1** Block 2867-3 (Dadhar)

- - - 209(P) / 107 (R) - -

Block 3372-12 (Kot Sarang) - - - 144 (P) - - Block 2966-1 (Nushki) - - - - - - Block 2568-13 (Hala)

- 225 (A)

- 225(P)* / 136 (R)* - -

Block 2766-13 (Khuzdar) - - - - - - Block 2568-15 (Tajpur) - - - - - -

Block 2866-2 (Kalat) - - - - - -

Subtotal Acquire / Process - 225 (A)

- 578(P) - - Subtotal Purchase / Reprocess - 243(R)

Partner Operated Blocks

Block 3370-3 (Tal) - 202(A)* - - - -

Block 2668-4 (Gambat) - - 137 (A) * 800 (R) - 1 (d)

Block 2669-3 (Latif) - 71(A) 362(A) 71 (P) 362(P)* -

Block 3370-10 (Nashpa) - - 67(A)* 45(R) - 1*

Block 2768-3 (Ex Block-22) - - - - - 1 (d)

Subtotal Acquire / Process - 273(A) 566(A) 71(P) 362(P) -

Subtotal Purchase / Reprocess - - - 845(R) - -

New Venture 503(P)

Total Acquired / Processed - 498(A) 566(A) 649(P) 362(P) Total Purchase / Reprocessed - 503(P) - 1,088(R) - -

Total Wells Drilled 4

s = successful

d = dry hole

* In progress

** Preparations are underway to abandon the well

PAKISTAN PETROLEUM LIMITED EXPLORATION ACTIVITIES

DURING THE YEAR 2005-06

For the Year 2005-06

G&A

Seismic Survey Acquired (A) / Purchased (P)

Process (P) / Reprocess (R) / Interpretation (I) Activity

2D Line

Km. 3D Sq. Km.

2D Line Km. 3D Sq. Km.

No. of Exploratory

Wells

PPL Operated Blocks

Block 2867-3 (Dadhar) - - - - - 1

Block 3372-12 (Kot Sarang) ! - - - - 1

Block 2966-1 (Nushki) - 60 (A) - 60 (P) / 60 (I) - -

Block 2568-13 (Hala) - - 150 (A) / 150 (P) 136 (R)* 150 (I) -

Block 2766-13 (Khuzdar) - 160 (A) - 160 (P) / 160 (I) - -

Block 2568-15 (Tajpur) - - 210 (A) 200 (R) 210 (P) - Block 2866-2 (Kalat) - - - - - - Subtotal Acquire / Process - 220 (A) 360 (A) 220 (P) - - Subtotal Purchase / Reprocess / Interpretation - 150 (P) 336(R) /

220 (I) 210 (P) / 150(I) -

Partner Operated Blocks

Block 3370-3 (Tal) - 705 (A) 750 (A) 705 (P) / 705 (I) 750 (P) 2

Block 2668-4 (Gambat) - - 325 (A) * - 325 (P) / 325(I) - S.W. Miano � II - - - - - 1

Block 2669-3 (Latif) - - 350(A) 71 (I) 350(P) 362(I)* 1

Block 3370-10 (Nashpa) - 246 (A) 215 (A)* / 202 (A) 246 (P) 215 (P) 1*

Block 2768-3 (Ex Block-22) - - - - - 1 Block 2365-1 (Off Shore Indus-E) - - - - - 1 Subtotal Acquire / Process - 951(A) 1,842(A) 951(P) 1,640(P) - Subtotal Purchase / Reprocess / Interpretation - - - 776 (I) 687 (I) -

Total Acquired / Processed - 1,171(A) 2,202(A) 1,171(P) 1,850(P) Total Purchase / Reprocessed / Interpreted - 150(P) 336(R)/

996 (I) 837(I) -

Total Wells Drilled 9 s = successful d = dry hole * In progress from 2004-05

STAFF STRENGTH AS AT 30 JUNE 2005

TOTAL STRENGTH OF THE MANAGEMENT AND EXECUTIVE / NON-EXECUTIVE STAFF AS AT 30 JUNE 2005

Management / Executive (MPT Staff) 672

Non-Executive (Non-MPT Staff) 1885

Total 2557

PAYMENTS TO NATIONAL EXCHEQUER

a. PROVINCE / REGION-WISE BREAKUP OF STAFF STRENGTH AS AT 30 JUNE 2005

Province/ region-wise breakup of staff strength

Sindh Category Punjab

Urban Rural Total NWFP Balo-

chistan FATA Azad Kash- mir

Total

Management/ Executive (MPT Staff)

139 379 48 427 34 68 0 4 672

Non-Executive (Non-MPT Staff)

282 340 75 415 67 1077 0 44 1,885

Total 421 719 123 842 101 1,145 0 48 2,557

b. BREAK-UP OF REGULAR/CONTRACTUAL STAFF AS ON 30 JUNE 2005

Category Management/Executive Staff (MPT Staff)

Non-Executive Staff (Non-MPT

Staff) Total

Regular Staff 672 1,885 2,557 Contractual Staff 5 0 5

Total 677 1,885 2,562

c. CATEGORY-WISE BREAK UP OF STAFF STRENGTH AS ON 30 JUNE 2005 MANAGEMENT AND EXECUTIVE (MPT STAFF)

Senior Executive 254 Junior Executive 418

Total 672 NON-EXECUTIVE (NON-MPT STAFF)

Clerical/Supervisory 593 Junior Monthly Paid 1292

Total 1885 Grand Total 2557

FOR THE YEAR ENDED ON JUNE 30, 2005

RS IN MILLION

Royalty 2,396 Gas Development Surcharge 4,413 Corporate Tax 2,593 Dividend 2,687 Excise Duty 1,392 Sales tax 4,594 18,075

FIVE YEARS FINANCIAL HIGHLIGHTS

YEAR ENDED JUNE 30 2005 2004 2003 2002 2001 Sales revenue (Net of Government levies)

23,294

17,668

12,181

6,406

4,100

Profit before tax 13,475

9,063

4,839

2,382

1,167

Profit after tax 8,623

6,617

4,190

1,819

459

Shareholder's equity 21,245

16,051

10,806

8,650

6,537

FINANCIAL RATIOS Current ratio*

2.50 2.27 1.57 1.87 1.76

Quick ratio* 2.21 1.97 1.36 1.49 1.42 Earnings per share - basic 12.57 9.65 6.11 2.66 13.98 Dividend (%)** 55 45 30 16 30 Return on capital employed 41 41 34 21 7 Fixed assets turnover ratio 2.43 2.1 1.43 1.31 1.03

* Previous years figures have been rearranged for comparison purposes ** Includes final dividend declared by the Board of Directors subsequent to year end.

Board of Directors

1. Mr. M.A.K.Alizai Chairman, Board of Directors

2. Mr. S. Munsif Raza - Chief Executive / Managing Director , PPL Director

3. Mr. S.R. Poonegar , Former Chief Secretary, Balochistan Director

4. Mr. Sajid Zahid, Barrister-at-law Director

5. Mr. Shaukat Hayat Durrani, Additional Secretary, MP&NR Director

6. Mr. G.A Sabri, Director General (Petroleum Concession), MP&NR Director

7. Mr. Muhammad Iqbal Awan, Financial Advisor, MP&NR Director

8. Mr. Zahid Majid, Director, SSGCL Director

9. Mr. Rashad R. Kaldany, IFC Director

10. Mr. Michael G. Essex, Director (Alternate to Mr. Rashid R. Kaldany)

http:/ /www.parco.com.pk

5.6 PAK ARAB REFINERY LIMITED (PARCO)

5.6.1 INTRODUCTION PARCO as an energy company has a unique position in the energy supply chain through the integration of pipeline operation, strategic storage, leading edge refining and marketing of petroleum products. 5.6.2 COMPNAY PROFILE Incorporated in Pakistan in May 1974, Pak-Arab Refinery Limited (PARCO) is a 60:40 joint venture between the Governments of Pakistan (GOP) and Abu Dhabi. Established with an initial paid-up capital of Rs.540 million, currently the paid-up capital of the company is Rs.11.6 billion. Since the commencement of commercial operations 25 years ago, the company has expanded a phenomenal 67 times and has achieved an equity base of Rs.36 billion and an asset base approaching Rs. 98 billion or close to US$ 1.6 billion in current dollar terms. It was the first company to be rated AAA by PACRA and commands that credit worthiness for an unprecedented eighth year running. 5.6.3 STRATEGIC PIPELINE NETWORK PARCO operates a crude oil cum product pipeline. It transports mainly crude from Karachi to Mahmood Kot near Multan for its Mid Country Refinery, and refined products, like diesel and kerosene, to Faisalabad and to Machike, near Lahore through its 1228 KM long 16", 18" and 20" diameter pipeline. PARCO�s Pipeline System includes a network of highly sophisticated Telecommunication facilities and a comprehensive Supervisory Control and Data Acquisition (SCADA) System. PARCO�s 864 km Karachi to Mahmood Kot pipeline is capable of pumping up to 6.0 million tons. In June 1997, PARCO completed its 364 KM MFM (Mahmood Kot- Faisalabad �Machike) Pipeline Extension Project. The Project design allows for future spur lines from Faisalabad to Kharian and Sahiwal. 5.6.4 MID-COUNTRY REFINERY PARCO�s 100,000 BPD, state-of-the-art Mid-Country Refinery at Mahmood Kot completed at a cost of US$ 886 million represents more than 40% of the indigenous refining capacity of the country. It helps substitute imports of refined value added oil products to the tune of US$ 100 million per year. In Pakistan, PARCO pioneered the successful introduction of environment friendly 87 octane unleaded motor gasoline in June 2001, whose quality has been enhanced to 90 octane since March 2003. 5.6.5 MARKETING INITIATIVES Under a Technical Services and Support Agreement, SHV of Holland is marketing 25% of PARCO�s LPG production as �PEARL Gas�. PARCO is currently marketing OMV Austria�s lubricants under the brand name of �PEARL Lubes�. PARCO is also locally producing lubricants in three grades of engine oil PEARL energy for Gasoline engines, PEARL zabardast for Diesel engines and PEARL Speed for

motorcycles, whereas PEARL Gearup for gears and transmission systems, strictly under its own formulation and supervision to ensure the highest standard. "TOTAL PARCO PAKISTAN LTD (TPPL), a company formed as a joint venture of PARCO and TOTAL S.A. of France is marketing consumer petroleum products. Already 100 stations have been commissioned in the first 4 years of its operations. 5.6.6 ACHIEVEMENTS AND MILESTONES During the last twenty five years the company initiated, completed and successfully commissioned the following projects for the development of the energy infrastructure of the country.

Completion of Projects

Commissioning of Karachi-Mahmood Kot first crude-cum-product 1981 Pipeline system and a mid country Pumping Station at Shikarpur. Additional 50,000 tons of Petroleum Storage at Korangi and direct 1990 discharge of tankers in � land to ease pressure on Keamari to release congestion in the Oil Installations area of Keamari Harbour and improving oil transportation logistics up-country. Introduction of flow improving technology (CDR) to increase 1992 pipeline installed capacity of 2.9 to 4.0 million tons/ annum. Completion of Bubak (Sindh) and Fazilpur (Punjab) Pumping 1994 Stations (BFP) to reach the designed capacity of 4.5 million tons to be further increased to 6 million tons per year with the help of CDR. System Up-gradation /Modernization and Telecom,Scada System to 1995 improve the existing system thru removing bottlenecks, increasing overall operational efficiency,effectiveness and safety of the system. Completed and Commissioned 364 Kms MFM Pipeline Extension 1997 Project (from Mahmood Kot to Lahore via Faisalabad) to provide an all weather, reliable, sale and quick means of transporting petroleum products to upcountry. The Pipeline Extension Project is designed to pump upto 5.5 million tons / year of HSD and SKO from the present terminal (TS-2)at Mahmood Kot to Machike. Tankages having a capacity of 36000 tons each at Mahmood Kot and Faisalabad and 60,000 tons at Machike have also been constructed as part of this project to augment the much-needed Storage Capacity in the Country.

Completion and Commissioning of country�s largest Mid-Country 2000 Refinery of 4.5 Million tons / year, to expand and enlarge country's refining capacity so that local and imported crude could be processed closer to the centres of consumption. Soft commissioning of 817 km White Oil Pipeline Project (WOPP) 2004 in November 2004. 5.6.7 VISION STATEMENT For PARCO to remain among tomorrow�s corporate winners, it may not only need to have a clear vision but also a passion for translating that vision into reality. The big challenge is therefore, not only trying to figure out what future will be the right one, but to choose a future that will give definite competitive advantage to the Company over the long-term and to create a cause for action besides charting a course on how to get there. 5.6.8 MISSION STATEMENT To consolidate financial and organisational gains, PARCO pursues the following Mission / Objectives inherent in its name :

i. Professional and Progressive Corporate Outlook ii. Aggressive Technical Thinking and Advanced Planning

iii. Reliability of Service iv. Consistency in Performance v. Organised and Systematic Development

5.6.9 OBJECTIVES

i. To enhance and establish a professionally sound corporate identity. ii. To operate the existing Pipeline System in a manner that establishes it

as a centre of excellence in Pipeline and Refining Activities in the Country.

iii. To embark upon Integrated Investment Programme which takes cognizance of the existing bottlenecks and long-term petroleum needs of the Country.

iv. To provide a lead to the indigenous Petroleum Industry in finding of solution to Technical and Managerial problems.

v. To develop appropriate Human Resources for undertaking of large Energy Projects in the Country.

The Management of the company is vested in Board comprising of Directors of following members:- 5.6.10 EMPLOYMENT OPPORTUNITIES AND MAN POWER STRENGTH It has been the main objective of PARCO to generate direct and indirect employment opportunities by launching new projects in the country so that country has highly skilled people to meet the future challenges. PARCO Mid-country Refinery near

Multan, oil pipelines and other facilities are playing catalyst role in expanding country�s industrial base and have been instrumental in the development of down stream units located in under developed areas along their respective routes. A large number of retail outlets for distribution and marketing of LPG and petrol oil products have been established. The direct man power strength of the company at the end of June, 2005 is 1102. 5.6.11 PROGRESS ON ANNUAL GOALS/TARGETS FOR 2004-05 PARCO like any professional organization strive for self sufficiency, mitigation of risk and profitable operations. The salient features of the actual performance for the year 2004-05 are as under:- i. Record Sales & Profits

During the year 2004-05 the company achieved the highest ever sales of Rs. 95.33 billion which due to better margin on products, reduction in financial charges has contributed in achieving all time record net profit (provisional) of Rs. 12.70 billion. The production statistics of the refinery in the period July 2004 to June 2005 were as under:-

(Figures in M. Tons) Liquid Petroleum Gas 146,667 HOBC 9,947 JP-1 451,923 LDO 50,664 MS (90 RON) 670,936 Kerosene 91,447 High Speed Diesel 1,373,277 Furnace Oil 938,858 Sulphur 22,388 Total 3,756,107

ii. Completion of White Oil Project

a. The White Oil Pipeline (WOP) was formally commissioned in March 2005. The first vessel arrived on 5th October 2004 carrying 48,000 M. Tons of HSD, allowing for the soft-commissioning in November 2004. The total quantity received by WOP till 30th June 2005 is 1,350,720 M. Tons of imported HSD whereas 1,140,287 M. Tons of deliveries have been made to the OMCs. WOP has three Terminal Stations namely at Port Qasim with a storage capacity of 108,000 M. Tons, Shikarpur with a storage capacity of 5,800 M. Tons and Mehmood Kot with a storage capacity of 108,000 M. Tons. The average annual designed throughput of WOP is 12 million tons per year. Sharing of PARCO�s existing pipeline route and station facilities has reduced the capital cost of the project. Operation and Maintenance (O&M) of the White Oil Pipeline

System, by PARCO shall also keep the operating cost of the system at the most economical level.

5.6.12 GOALS/TARGETS FOR FINANCIAL YEAR 2005-06 The Prime Goals set for the year 2005-06 are as under:-

i. Consolidation of the good results achieved in 2004-05 and minimize the negative effects of the volatile prices of crude oil in international market.

ii. Revamping and upgrading of the pipeline and telecom system to increase

the efficiency of the existing system. 5.6.13 UP-COMING PROJECT The company is in the process of creating a pipeline link between

Karachi Port and Port Qasim. To integrate the two ports of Keamari and Port Qasim with up-country�s pipeline and pumping facilities thereby facilitating, optimal utilisation of ports for receiving and handling imported petroleum products and reduction of demurrages. 5.6.14 BENEFITS TO ECONOMY

i. Will integrate the two ports with PARCO�s pumping facilities. ii. Will optimize the receipts of imported petroleum products at the two ports

iii. Will substantially improve the reliability of supplies to up-country. iv. Will increase the capacity utilization of Port Qasim v. Will also transport crude, when required, for PARCO Refinery operating in

Mehmood Kot.

5.6.15 SOCIAL RESPONSIBILITY & COMMUNITY DEVELOPMENT PROGRAM UNDER TAKEN Like any responsible corporate enterprise in a developing economy, PARCO is fully aware of its role of a public sector enterprise. The welfare of the society is on its agenda. The Company strives for Zero impact on environment and contribute significantly to reduce the damage done to nature by man. i. Protection of Environment

Towards keeping the environment free from pollution PARCO adopted following measures.

a. Spent large amount on treatment of waste and to make sure that the air water sources and sub soles strata of the Mid Country Refinery remain free.

b. PARCO introduced lead free Motor Gasoline four years earlier than the deadline announced by world agencies. Modern estimates indicate that the worldwide lead contamination cause losses of billion of dollars annually on account of treatment of illness and losses in working ours. In this case of Pakistan such losses are estimated to be Rs. 4 - 6 billion per year, which have been minimized by the pioneering action by PARCO.

ii. Skilled Labor Force

Through continued launching of new project, PARCO has provided opportunities to local people to learn new technologies to take-up highly skilled job which has saved substantial foreign exchange.

Availability of LPG in northern areas to save Junipar trees in Balochistan and northern area is another contribution of PARCO to save the environment.

iii. Other Programs

Beside the above, in the field of health, education, community development, sports, science and technology and cultural heritage PARCO has given valuable support. Donation of ECG machine and Books and Mobile Dispensary Asthma Clinic in the Salt mines of Khewara are such examples.

5.6.16 PAYMENTS TO NATIONAL EXCHEQUER PARCO has generated significant benefits for national economy against GOP�s initial investment of Rs.324 million. Upto June, 2005 it has paid/saved the following amounts to Government Exchequer:

Custom Duties/Taxes Rs. 4.6 billion Income Tax Rs. 11.5 billion Dividend Rs. 7.0 billion Freight Pool Rs. 20.0 billion Total Earning/Savings to GOP Rs. 43.1 billion

5.6.17 YEARLY FINANCIAL HIGHLIGHTS

2000-01 2001-02 2002-03 2003-04 OPERATIONAL PERFORMANCE

Refinery thruput (Thousand MT) 2,666 3,565 3,199 3,922 Delivery of oil products - KMK Pipeline (Thousand MT) 430 1,598 1,889 1,494

Delivery of oil products - MFM Pipeline (Thousand MT) 1,673 1,645 1,753 1,787 Delivery of crude oil - KMK Pipeline (Thousand MT) 2,728 3,552 3,237 3,869 Capacity utilization % - KMK Pipeline 79 115 114 119 Capacity utilization % - MFM Pipeline 56 56 58 60 Capacity utilization % - Refinery 71 79 70 87 Delivery of oil products - KMK Pipeline (Thousand MT) 3,158 5,150 5,126 5,363

PROFIT & LOSS SUMMARY (Rs. in Million) Turnover 25,249 43,672 47,603 65,808 Crude / lubricants consumed (21,178) (37,429) (37,658) (51,519) Other operating & administration expenses (4,431) (6,352) (6,328) (6,095) Operating profit / (loss) (360) (109) 3,617 8,194 Other income / charges � net 3,306 2,748 1,568 1,157 Financial & other charges (4,428) (6,114) (4,436) (3,140) Shortfall in Guaranteed Return (SGR) 4,058 7,961 3,542 904 Profit before taxation 2,576 4,486 4,291 7,115 Taxation 48 (525) (762) (2,682) Profit after taxation 2,624 3,961 3,529 4,433

BALANCE SHEET SUMMARY (Rs. in Million) Tangible & intangible fixed assets 60,647 60,908 61,078 61,417 Accumulated depreciation (8,264) (11,428) (14,670) (17,915) 52,383 49,480 46,408 43,502 Long-term investments & deposits 20,414 9,851 15,413 16,589 Other non-current assets 18 20 24 1,197 Current assets 18,170 31,438 22,950 27,329 90,985 90,789 84,795 88,617 Long-term loans & redeemable capital 52,762 37,094 34,062 28,179 Deferred liabilities 1 1 4,214 6,493 Current liabilities 22,558 34,798 24,851 29,043 Dividend 730 756 1,200 2,000 76,051 72,649 64,327 65,715 Total Net Assets 14,934 18,140 20,468 22,902 Represented by: Paid-up capital 2,160 2,160 11,605 11,605

Reserve for issuance of bonus shares 9,445 9,445

-

- Other reserves 3,330 6,535 8,863 11,296 Shareholders' equity 14,935 18,140 20,468 22,901

PERFORMANCE MEASURES (%) Operating & admin cost to turnover 17.5 14.5 13.3 9.3 Operating profit / (loss) to turnover (1.4) (0.2) 7.6 12.5 Net profit after tax to turnover 10.4 9.1 7.4 6.7 Return on net assets 17.6 21.8 17.2 19.4 Return on capital employed 3.8 8.1 7.9 13.9 Return on shareholders' equity 17.6 21.8 17.2 19.4

LEVERAGE RATIOS Current ratio (excluding current maturity of LT loans &

redeemable capital) 1.1:1 1.21:1 1.22:1 1.16:1 Debt: Equity 80:20 75:25 67:33 61:39

INVESTMENT MEASURES Earning per share (EPS) (Rs.) 12.15 18.34 3.04 3.82 Dividend per share (DPS) (Rs.) 3.38 3.50 1.03 1.72 Break-up value per share (Rs.) 69.14 83.98 17.64 19.73

Bonus shares

-

- 4.37:1

-

Board of Directors

OFFICIAL 1 Mr. S. Salim Abbas Jilani

Chairman 2 Mr. Mohamed Naseer Al Khaily,

Chairman, ADPI & Managing Director International Petroleum Investment Company (IPIC) Abu Dhabi

3 Mr. Abdul Karim Thabet Adviser to Managing Director, IPIC, Abu Dhabi

4 Mr. M Iqbal Awan Financial Advisor MP&NR

5 Mr. Khadem Al Qubaisi Divisional Investment, Manager, IPIC, Abu Dhabi

6 Mr. Shafeeq A. K. Hussain, Private Sector

7 Mr. Aijaz Ahmed Chaudhary Member National Assembly (Mandi Bahauddin)

8 Dr. Hans-Heinz Horrak ADPI�s/OMV Nominee IPIC

9 Mr. Sabar Hussain Director General (Oil) Ministry of Petroleum and Natural Resources

10 Mr. Mahmood Akhtar Joint Secretary (Budget) Finance Division, (Ministry of Finance)

11 Dr. Shahid K. Hak Managing Director, PARCO

5.7 SAINDAK METALS LIMITED

5.7.1 INTROUDUCTION

The Saindak Metals Limited (SML), formerly known as Resources Development Corporation of Pakistan (RDC), is a national company, which deals in exploration, exploitation and development of non-ferrous minerals and extraction of base metals like copper.

The Saindak Copper-Gold Project was completed by Metallurgical Construction Corporation (MCC) in 1995 and handed over to SML in January 1996 after trial production of 1,500 tones of blister copper. The project remained closed between 1996-2003. In February 2000, it was decided to restart the project through leasing option by inviting international bids. Accordingly, GOP awarded the lease to MCC Resources Development Corporation of China for a period of 10 years to operate the project as joint venture. MRDL (China) arranged finances including working capital for maintenance, preparation, and a rehabilitation and production activities amounting to US $ 25.915 million as per terms of contract. The project was handed over to MCC China and commercial production started in August 2003. 5.7.2 ACHIEVEMENTS FOR THE PERIOD SEPTEMBER 2004 TO JUNE 2005 Production

The SCGP remained in production during the period September 2004 to June 2005 and following quantities were produced :

i. Copper Ore 3,909,553.00 MT ii. Copper Concentrate 59,044.67 MT iii. Blister Copper 11,692.46 MT

5.7.3 SALES STATUS

MCC/MRDL exported following quantities of blister copper during the period from September 2004 to June 2005 : Blister Copper 13,326.22 MT Value US $ 56,892,221.00 5.7.4 PROFIT AFTER TAX FOR THE YEAR 2004 US $ 1.197 Million (50% share)

5.7.5 EXPANSION OF SAINDAK PROJECT

Owing to booming copper and gold prices, MCC/MRDL proposed expansion of

project to enhance the capacity by 30% agreement dated November 30, 2001 was signed

wherein MCC China has agreed to invest US $ 22 million for expansion of project.

5.7.6 GOVERNMENT TAXES

The lessee has paid Rs.112.422 million on behalf of SML on account of royalty @ 2% on sale value. Similarly, presumptive tax @ 1.25% and EPZ service charges @ 0.5%.

5.7.7 COMPANY�S PROFILE: i. Name and Address of the company with telephone and fax number Saindak Metals Limited A-73, 2nd Street Jinnah Town Quetta Cantt.

Tele: 081-9201690, 9201475 Fax: 081-2828336

ii. Name of Chief Executive Mr. Rashid Hussain Malik

iii. Type of Company Limited liability company with 100% owned by Government of Pakistan

iv. Annual Turnover US D 60,527,153 (equivalent Pak Rs.3,604.392 million)

v. Profit after Tax US D 2,395,376/- (equivalent Pak Rs.142.645 million) vi. Type of Business / Manufacturing Metal Mining

a. Auditors M/s Anjum, Asim, Shahid, Rehman, Chartered Accountants b. Legal Advisor

Mr. Muhammad Riaz Ahmed c Bankers

1 National Bank of Pakistan 2 National Bank of Pakistan 3 Habib Bank Limited 4 United Bank Limited

5.7.8 Vision To make the country economically and financial sound through production of copper, gold and silver.

5.7.9 Mission

To make Saindak Metals Limited, a vibrant organization capable of brining the mineable resources to a stage where investors (local and foreign) are attracted.

5.7.10 TOTAL STRENGTH OF THE MANAGEMENT

i. Executive / Non-executive staff

Executives 6

Regular / Non-Executive Staff (BPS 1-16) 7

Contractual / Non-Executive (BPS 1-16) -

Sub-Total: 13

Piecework basis workers/miners 6

Grand Total: 19

ii. Province / Region-wise Breakup

Province/Region Punjab Sindh NWFP Balochistan AJK FATA/FANA TOTAL

Officers 1 1 1 1 1 - 5 Officers on contract

- - - 1 - - 1

Staff - - 2 5 - - 7 Grand Total: 1 1 3 7 1 - 13

iii. Category and post-wise breakup of officers strength

Category/Post Managing

Director General Manager

Sr. Accounts Officer

Assistant Manager

Coord. Officer

Sr. Stenographer

TOTAL

Head Office, Quetta

- 01 01 01 - 01 04

Branch Office, Islamabad

- - - - 01 01 02

Grand Total: - 01 01 01 01 02 06

iv. Breakup of regular / contractual / piecework basis workers etc.

Head Office, Quetta 3

Branch Office, Islamabad 3

Total: 6

5.7.11 SOCIAL RESPONSIBILITIES AND COMMUNITY DEVELOPMENT PROGRAMME UNDERTAKEN

ii. Established Saindak Model School at Project site. iii. SML also established 50-Bed hospital and dispensary at Saindak Copper-

Gold Project to provide health services. iv. Lessee is providing potable water to the locals which is scarce in area.

5.7.12 PAYMENTS TO NATIONAL EXCHEQUER

Particulars Rs. in Million

Royalty 113.34

Development Surcharge 25.74

Presumptive Tax 64.26

5.7.13 FINANCIAL HIGHLIGHTS FOR LAST FIVE YEARS

Year Ended 31st December 2001 2002 2003 2004 2005 Sales Revenue (Rs. in million) Project remained

Stalled 586.238 3604.392 2287.356*

Profit Before Tax (Rs. in million) - do - - 142.645 **

Government Investment upto 1996 - do - - - -

* Figure upto 30th June 2005. ** Figure not available.

Note: Government has made capital investment of Rs.13,995.053 million and all assets have been handed over to Lease Operator on a annual rent of US $ 0.5 million plus 50% share of surplus.

Board of Directors

OFFICIAL

1 Mr. Ahmed Waqar Secretary, P&NR, Chairman

2 Mr. Rasheed Hussain Malik Director General (Minerals), Managing Director, SML

3 Mr. M. Iqbal Awan Financial Advisor MPNR

4 Brig. M. Khalid Sajjad Khokhar Managing Director, PMDC Islamabad.

5 Mirza Talib Hussain Director General (GSP), Quetta.

6 Maj. (R ) Nadir Ali Addl Chief Secretary (Dev) P&D. Division

7 Mr. Abdul Manan Kakar Secretary, Mines & Mineral Department, Quetta .

8 Mr. Mueen u Dar Chief, Planning and Development Division

web site: www.mpnr.gov.pk/lcdc.php

5.8 LAKHRA COAL DEVELOPMENT

COMPANY LIMITED

5.8.1 INTRODUCTION Lakhra Coal Development Company Limited (LCDC), was incorporated as a Public Limited Company on 6th February, 1990 under Companies Ordinance, 1984. The Company is a Joint Venture of Pakistan Mineral Development Corporation (PMDC), Government of Sindh (GOS) and Water & Power Development Authority (WAPDA) with equity capital of Rs.50 million shared in the ratio of 50:25:25 respectively. 5.8.2 LAKHRA COALFIELD The Company project comprising operating coal mines, is situated in Lakhra Coalfield located about 70 km north-west of Hyderabad city and 200 km North-East of Karachi. The property lies between latitude 25°-35� to 25°-55� (north-south) and longitude 68°-0� to 68°-12� (east-west). 5.8.3 MINING CONCESSION Presently an area of 7943 acres of Compact Block Coal lease is in possession of LCDC at Lakhra Coalfield for development of coal mines and supply of coal to WAPDA Thermal Power Station at Khanote, District Dadu, Sindh. The total proven reserves in the area are 42 million tonnes. 5.8.4 COMPANY�S OBJECTIVE Prime objective of the Company is to develop Lakhra Coal Mines to supply Coal to 150 MW Thermal Plant of WAPDA at Khanote which was originally planned for 6x50 MW with annual coal consumption of 15,00,000 M.Tonnes. However, only 3x50 MW plant was set up which also operated much below its rated capacity reducing the coal requirement to even less than 50% and rendering the mechanized mining uneconomical. At later stage it was decided that remaining 3 units would be set up by private sector instead of WAPDA and accordingly an area of 8622 acres, out of 16,564.71 acres of Compact Block was withdrawn from LCDC leased area for allotment to a private party, which later on was also withdrawn and presently it is in possession of the Government of Sindh. 5.8.5 IMPLEMENTATION STATUS LCDC engaged Chinese Company for Geotechnical studies and design and development of mechanized mines in the entire area of 16,564.71 acres. Geotechnical studies were completed and mine design prepared by the Company. LCDC was in the process of signing mine development contract with Chinese Company but it transpired that WAPDA had decided not to set up remaining 3 power units and the installed units operating at much lower capacity were expected to consume half of stipulated annual quantity of coal. Under these circumstances it also became difficult to arrange finances for the Company and thus it was decided to drop the idea of mechanised mines and was considered appropriate to develop coal mines with present semi mechanised system to meet the limited coal requirement of installed thermal plant. Heavy mechanization cost would have rendered the venture uneconomical if assured uninterrupted market for stipulated annual quantity of 750,000 tonnes was not available for operating coalmines.

At present LCDC is operating coal mines through local manual mining system through investment by its Coal Raising Contractor.

5.8.6 INFRASTRUCTURE FACILITIES For the purpose of development / operation of mines necessary infrastructure as stated below has been developed: -

i Fair weather roads have been constructed for transportation of coal from mines to main road leading to market. Also fair weather roads connecting various mines have been developed

ii Sufficient numbers of residential colonies for labour have been constructed along with necessary amenities.

iii Water supply arrangement for residential colonies as well as various mines have been made through water tanker as well as concrete water tank at colonies and mines

iv Electric generators have been set-up for emergency lighting and mines lamp charging

v A mobile phone communication has been set-up to facilitate fast communication with mines site office.

5.8.7 MINE PLANNING AND TECHNICAL SUPERVISION LCDC has employed a technical team of Mining Engineers, Geologist and survey officer supported with mine supervisory Sirdars and clerical staff. All operations of Raising Contractor are supervised/ guided by this team to ensure that all operations are carried out in accordance with statutory guideline and maximum possible recovery is ensured. The technical team overseas that the operations of Raising Contractor are in accordance with mine plan duly approved by LCDC. 5.8.8 STATUS OF MINE DEVELOPMENT LCDC has 45 mines fully developed and capable of each producing 40 to 50 tonnes coal per day while 25 mines are under development. Coal excavation is carried out by applying shortfall retreating method after developing coal panels at 50 ft interval. When a panel is completely mined, it is sealed off and coal excavation is started from next panel. Ventilation circuit is maintained through main incline as intake and main shaft as return air way. In case mine workings are extended far away from main shaft, an additional shaft is provided to improve airflow through coalface. Shaft is also used for coal hauling and material lowering while incline is also used as traveling way for labour.

5.8.9 COAL SALES

Thermal Plant remained under trial during 1992-93 to 1994-95 and regular coal supplies could be started from the year 1995-96. Initially, coal supplies were made by LCDC partially from its own mines and partially from PMDC. After developing of Company�s own mines, the Company is capable of meeting total coal requirement of Thermal plant. However, approximately 60% of coal supplies are made by LCDC and balance 40% supply from coal mines of PMDC through a internal arrangement between

LCDC and PMDC. Due to under capacity operation and frequent shutdowns of WAPDA Thermal Plant, coal supplies to plant are much below the planned quantity of 7,50,000 tonnes. The plant is hardly using 250,000 to 300,000 tonnes coal, which is also jointly supplied by LCDC and PMDC. Therefore, LCDC has started selling surplus coal in open market so that the company does not run in losses. The Company has sold total quantity of 2,362,708 tonnes of coal upto 30.06.2005. The yearly break-up since financial year 1994-95 to 2004-2005 is given below:

YEAR SALES TO WAPDA OPEN MARKET TOTAL

1994 - 1995 63,176 ---- 63,176

1995 - 1996 251,777 ---- 251,777

1996 - 1997 201,109 ---- 201,109

1997 - 1998 186,854 ---- 186,854

1998 - 1999 262,219 8,873 271,092

1999 - 2000 229,204 6,914 236,118

2000 - 2001 122,446 67,472 189,918

2001 - 2002 163,297 110,006 273,303

2002 - 2003 136,200 126,122 262,322

2003 - 2004 136,995 92,286 229,281

2004 - 2005 139,375 58,383 197,758

TOTAL 1,892,652 470,056 2,362,708

5.8.10 PROFIT & DIVIDEND FOR LAST 3 YEARS

Year Profit After Tax Dividend

2002-03 11.374 million 16%

2003-04 14.321 million 50%

2004-05

16.349 million (Provisional)

20% (Provisional)

5.8.11 COMPANY PROFILE

i. Name and address of the Company with telephone and fax number Lakhra Coal Development Company Limited, Bungalow No. C/4, KDA Scheme No.1, Near PNS Karsaz, Karachi Tele: 4545127, 4388791, 4543066 Fax: 4388768

ii. Name of Chief Executive: Muhammad Saleem Qureshi

iii. Type of Company: Public Limited (Unlisted)

iv. Annual Turnover: Gross sales for the year ending 30th June, 2005 was Rs. 170.605 million

(provisional)

v. Profit after taxation: Rs. 16.404 million for the year ending 30th June, 2005 (provisional).

vi. Type of Business / Manufacturing: Involved in the production and sale of Coal and Limestone.

vii. Auditors: M/s Kahlid Majid Rehman Sarfaraz Rahim Iqbal Rafiq &Co., Chartered Accountants.

viii. Legal Advisor: Mirza Adil Baig, Advocate, Karachi

ix. Bankers: 1. National Bank of Pakistan 2. United Bank Limited 3. First Women Bank Limited

5.8.12 VISION

To help and to make the country self sufficient in energy by development and exploitation of coal resources on scientific lines.

5.8.13 MISSION

To develop and operate the Coal Mines on scientific lines for large scale production for power generation and other uses.

5.8.14 TOTAL STRENGTH OF THE MANAGEMENT / EXECUTIVE / NON

EXECUTIVE STAFF Executive 14 Non Executive (BPS � 1 TO BPS � 16) 51

TOTAL: 65

5.8.14.1 PROVINCE / REGIONAL WISE BREAKUP

i. Officers

Province/ Region

Punjab Sindh NWFP Balochistan AJK FATA/ FANA

TOTAL

Total 2 11 - 1 - - 14

ii. Staff and Workers

Total 2 48 - 1 - - 51

5.8.14.2 CATEGORY AND POST-WISE BREAK UP OF OFFICERS STRENGTH

Category/

Post M.D. G.M. DGM Manager D.M. A.M. Total

Total: 1 - - 3 4 6 14

5.8.15 SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT PROGRAM UNDER TAKEN

i. To promote healthy environment, project staff is allowed full medical facilities for self and their family members.

ii. Recreational activities are also available at Site.

5.8.16 PAYMENTS TO NATIONAL EXCHEQUER

Particulars Rs. In Million Income Tax 8.833 Royalty 8.363 Excise Duty 0.311 Sales Tax 17.770

Total: 35.277 5.8.17 FINANCIAL HIGH LIGHTS FOR LAST FIVE YEARS

Year Ended 30th June 2001 2002 2003 2004 2005 Sales Revenue (Rs. In Million)

90.740 130.647 167.264 170.711 170.605

Profit Before Tax (Rs. In Million)

9.019 20.631 17.499 22.032 25.237

Shareholders Equity (Rs. In Million)

117.869 50.000 50.000 50.000 50.000

Financial Ratios Debt Equity Ratio (Rs. In Million)

100% 100% 100% 100% 100%

Current Ratio (Acid Test)

5.17:1 2.1:1 1.93:1 2.33:1 2.18:1

Interest cover ratio (No of times)

- - - - -

Selling % Distribution to Sales Revenue (%)

21.89 21.68 14.27 14.80 13.48

Earning per share-basic/diluted

5.19 2.68 2.27 2.86 3.28

Dividend per share (%) - 16% 16% 50% 16% Dividend Yield (%) N.A N.A N.A. N.A N.A Return on Capital Employed (%)

6.35 25.90 21.08 30.45 28.44

Fixed assets turnover ratio

39.97 66.35 72.13 77.96 38.86

Board of Directors

1 Mr. Irfanullah Khan Marwat Minister for Mines & Mineral Development Department, Govt. of Sindh/ Chairman of the Board

2 Mr. Mohammad Saleem Qureshi Managing Director/ Chief Executive

3 Mr. Abdul Hamid Akhund Secretary, Mines & Mineral Development Department, Govt. of Sindh

4 Brig. M Khalid Sajjad Khokhar Managing Director, PMDC

5 Mr. Mohammad Iqbal Awan Financial Advisor (P&NR)

6 Mr. Masood-ur-Rehman General Manager (Finance), PMDC

7 Mr. Haseeb Ahmed Khan Chief Engineer, WAPDA

8 Mr. Abu Adil Chief Executive Officer, GENCO-1, TPS, Jamshoro

9 Mr. Rasheed Hussain Malik Director General (Minerals)

http://www.ghpl.com.pk

5.9 GOVERNMENT HOLDINGS (PRIVATE) LIMITED

(GHPL)

5.9.1 INTRODUCTION Government Holdings (Private) Limited (GHPL) manages Government of Pakistan�s working interest in upstream petroleum Joint Ventures. GHPL participates in all Joint Ventures as non-operator. As such it does not have yearly drilling or survey targets like other oil & gas companies. The company monitors the activities of the Joint Ventures on behalf of the Government of Pakistan. GHPL has been assigned GOP�s working interest in 48 joint ventures. Current portfolio consists of 25 petroleum discoveries and 28 concessions in exploration stage. These 48 joint ventures also include 20 Development and Production Leases in which GHPL has a stake. GHPL is non-operating partner with local and foreign oil and gas exploration and production companies functioning as operator. Major operating companies in partnership with GHPL are BP, Shell, BHP Billiton, OMV, Petronas Carigali, Tullow, Premier Kufpec, MOL, OPI, OGDCL, PPL, POL and PEL. Major oil & gas fields currently under development in which GHPL has working interest are Manzalai and Makori being developed by MOL. 5.9.2 STATUS OF MAJOR PROJECTS i. Sawan (GHPL Working Interest 22.5%)

Gas production from the Sawan continued in the year 2004-2005 at a steady rate. Average gas production from the field during the year was 375.9 MMSCFD.

ii. Zamzama (GHPL Working Interest 25%)

Zamzama gas and condensate field produced gas and condensate on continuous basis. Average production from the field during the year was 262.20 MMSCF of gas and 1734 BBLS of condensate per day. BHP Billiton (Operator) has finalized the phase-II planning and design work.

iii. Hasan, Sadiq & Khanpur (GHPL Working Interest 22.5%)

Average production from the three fields (Hassan, Sadiq and Khanpur), operated by PEL, during the year was 17.9 MMSCF of gas per day.

iv. Chanda (GHPL Working Interest 17 ½%)

The Chanda field, the first oil and gas discovery in NWFP started producing from 24th July, 2004. Stable quantity of oil and gas is being produced from the field. Average production from the field at the end of June, 2005 was 11 MMSCF of gas and 2801 BBLS of oil per day.

v. Mazarani (GHPL Working Interest 12 ½%)

Production from the field started in June, 2003. Average production from the field during the year 2004-05 was 11 MMSCF of gas and 65 BBLS of condensate per day.

vi. Pariwali (GHPL Working Interest 17 1/2%)

Pariwali was assigned to GHPL after it could not be privatized. Production in the field has been increased substantially on completion of well No.5. Average production from the field was around 1150 BBLS of oil, 11.23 MMSCF of gas, 44.7 BBLS of gasoline and around 30.3M. Tons of LPG per day, during the year 2004-05. Current production from this field is around 2367 BBLS oil, 21 MMSCF gas, 85 BBLS of gasoline and 58 M.Tons of LPG per day.

vii. Minwal (GHPL Working Interest 17 1/2%)

The field has almost been depleted. Its average production during the year was about 69.80 bbls of oil per day.

viii. Jhaberi South, Junathi South, (GHPL Working Interest 25%)

In year 2004-05 combined production from both fields were at an average of 2.8 MMSCF of gas and 38 BBLS of Oil per day (Jhaberi South).

ix. Ali Zaur, (GHPL Working Interest 25%)

During the year 2004-05 the field was producing at an average of 1.91 MMSCF of gas and 745.3 BBLS of oil per day.

x. Shah Dino (GHPL Working Interest 25%)

During 2004-05 this one well field was producing an average of 469 BBLs of Oil and 0.42 MMSCF of gas per day.

xi. Mirpur Khas/Khipro (GHPL Working Interest 25%)

GHPL has share of 25% in the Mirpukhas/Khipro, discoveries. Five discoveries of gas and condensate namely Naimat Basal, Siraj South, Umar, Usman and Kausar produced 60.3 MMSCF of gas, 1075 barrels of condensate/oil, 11 M.Tons of LPG per day during the year 2004-05.

xii. Manzalai � Tal Exploration License

Manzalai is NWFP�s second gas and condensate discovery. It was brought on Extended Well Test production on fast track basis. Average production during the year 2004-05 from one well was 31.8 MMCF of gas and 330 BBLS of condensate per day. Second Well on the structure is under drilling.

xiii. Rehmat- Mubarak Exploration License

Development and Production Lease was granted over Rehmat Field w.e.f. 22nd March, 2004. Average production from the field was 37.9 MMSCF of gas and 140 BBLS of condensate per day during 2004-05.

xiv. Offshore Indus �M� & �N� Blocks

Production Sharing Agreements were signed between GHPL and Eni Pakistan Ltd on 25th February, 2005. First Management Committee Meeting was held on 14th April, 2005. Operator is planning for 2D/3D Seismic Survey in both the blocks.

xv. Offshore Indus �E� Block

After obtaining good data of 3-D seismic, Shell (Operator) and its partners, KUFPEC, GHPL decided to drill a well. Negotiations continued for quite a long time to bring OGDCL and PPL as new partners. OGDCL and PPL have agreed to take up 30% and 20% working interest respectively. Production Sharing Agreement between GHPL and partners will be signed in early September, 2005. A well is expected to be drilled in April-May 2006.

xvi Offshore Indus Delta-A

This is the first offshore block operated by OGDCL. Production Sharing Agreement was signed on 23rd October, 2004 between GHPL and OGDCL. OGDCL is planning to acquire 3D seismic data in the block.

xvii. Offshore Indus �J�

Offshore block has recently been awarded to PEL. Operator is negotiating terms for the Production Sharing Agreement.

5.9.3 DISCOVERIES MADE DURING FISCAL YEAR 2004-2005

Different operators made following oil and gas discoveries from the blocks in which GHPL is also a JV partner.

Discovery Oil/Gas Operator Concession

Makori Gas/Condensate MOL TAL

Bilal North Gas/Condensate OPI Khipro

Bilal Gas/Condensate OPI Khipro

TandoAllah Yar North Gas/Condensate OGDCL TandoAllah Yar

Chak-63 South East Gas/Condensate OGDCL Sinjhoro

Jhal Magsi South Gas OGDCL Kotra

Fateh Shah North Gas BP Badin-III

Haseeb Gas Hycarbex Inc Yasin

5.9.4 PRODUCTION PROFILE As of 30th June, 2005 GHPL�s share of average daily production from all fields is as follows: Oil 1183 BBLS per day Condensate 590 BBLS per day Gas 181.3 MMCF per day LPG 7.1 M.Tons per day Total 30,280.5 Barrels of Oil Equivalent per day 5.9.5 INVESTMENTS, REVENUES AND ROYALTY During 2004-05 GHPL invested Rs 2250 million in the development of discovered oil and gas fields and generated Rs 9264 million from sale proceeds of oil and gas. Out of the revenues Rs 1148 million were paid to GoP as royalty. 5.9.6 GOALS AND TARGETS OF GHPL DURING JULY 2005 TO JUNE 2006 AND EXPECTED ACHIEVEMENTS During the Financial Year 2005-2006, GHPL will invest about Rs 2,706.5 million in development and production operations of oil and gas and is expected to generate revenue to the tune of Rs. 9,300 million from oil and gas sales proceeds. Following is the quarterly break up of GoP�s Investments and Revenues from oil and gas sale proceeds during that period. i. Investment (Rs. Million)

JULY-SEPT 2005 OCT-DEC 2005

Jan-Mar 2006

Apr-Jun 2006

TOTAL

477.3 652.2 668.7 908.3 2706.5 ii. Revenue

2100 2300 2400 2500 9300

Board of Directors

S.No OFFICIAL 1 Mr. Ahmad Waqar

Secretary Petroleum & NR Chairman

2 Mr. Khurshid Anwar, Managing Director/Chief Executive GHPL

3 Mr. M Iqbal Awan Finance Advisor (P&NR)

4 Mr. Bashir Ahmad Chauhan Joint Secretary (Admn) M/o Petroleum & NR

5 Agha Sher Hamid Zaman Director (Technical) GHPL

http://www.pmdc.gov.pk

5.10 PAKISTAN MINERAL DEVELOPMENT CORPORATION (PVT)

LIMITED (PMDC)

5.10.1 PERFORMANCE OF PMDC DURING FY 2004-05 PMDC is coming up as a progressive organization and its physical and financial achievements are improving year by year. During the financial year 2004-2005, PMDC achieved record production and sale of rock salt and coal. It also earned record profit. All this has been made possible because of the policies of the present Government, better management and concerted efforts of the employees of the Corporation. Performance and achievements of PMDC during the FY 2004-05 are summarized in the following paragraphs.

5.10.2 PHYSICAL PERFORMANCE

i. Production & Sale of Salt

During the FY 2004-05, production of salt was 835,431 tons which was 111% of the budgeted target of 751,000 tons and 110% of salt production of 756,076 tons during 2003-04. The sale of salt during the FY 2004-05 was 839,019 tons which was 112% of the budgeted target of 751,000 tons and 111% of 757,370 tons sold during the corresponding period last year. During FY 2004-05, PMDC exported 14,500 tons salt to India and Afghanistan. The production, sale and export is ever highest in the history of PMDC. Project wise production and sale figures are given below:

Project wise Production & Sale of Rock Salt (Tons)

PROJECTS 2004-05 (Target) 2004-05 (Actual )

Production Sale Production Sale

Khewra Salt Mines 344,000 344,000 369,159 376,556 Warcha Salt Mines 310,000 310,000 350,095 346,286

Kalabagh Salt Mines 43,000 43,000 53,540 53,540

Jatta / B.Khel Salt

Quarries 54,000 54,000 62,637 62,637

TOTAL 751,000 751,000 835,431 839,019

ii. Production & Sale of Coal:

Production of coal from PMDC coal mines during the financial year 2004-05 was 447,143 tons which was 104% of the budgeted target of 431,000 tons but was 117% of production of 383,731 tons achieved during the last financial year. Sale of coal during the FY 2004-05 was 447,002 tons which was also 104% of the budgeted target of 431,000 tons and 117% of the sale of 383,502 tons coal during the same period last year. The production and sale of coal is ever highest in the history of PMDC. Project wise production and sale figures are given below:

Project wise Production & Sale of Coal (Tons)

PROJECTS 2004-05 (Target) 2004-05 (Actual) Production Sale Production Sale

Degari 20,000 20,000 13,034 12,884 Sor-Range 66,000 66,000 59,101 59,129 Sharigh 95,000 95,000 138,844 138,828 Lakhra 250,000 250,000 236,164 236,161 TOTAL 431,000 431,000 447,143 447,002

5.10.3 FINANCIAL PERFORMANCE FOR THE FY 2004-05 On overall basis PMDC earned a record profit of Rs. 195.955 million (before tax) during the FY 2004-05 as compared to the budgeted profit of Rs. 151.367 million and a profit of Rs. 95.358 million earned during the last financial year. 5.10.4 OTHER ACHIEVEMENTS

i) The share of PMDC Rock Salt production/sale in the country has been increased from 48% to 52% approx.

ii) PMDC has increased its coal market share from 11% to 13% of production/sale in the country.

iii) It may be mentioned that GOP equity in PMDC is Rs. 10 million only. PMDC is now in accumulated profit of over Rs. 200 million. There is no loan liability, nor any bank borrowing.

5.10.5 GOAL /TARGETS FOR FINANCIAL YEAR 2005-06 i. Physical Goals/Targets for FY 2005-06

Projects Production (Tons) Sales (Tons)

Rock Salt 840,000 840,000 Coal 500,000 500,000 ii. Financial Goals/Targets for FY 2005-06

Budgeted

Profit Before Tax Rs. 204.956 million

5.10.6 FUTURE OUT LOOK

i. PMDC is well set to meet the targets fixed for the financial year 2005-06 and expected to give better physical and financial results.

ii. Coal is an important energy substitution. PMDC has undertaken development of its mines to meet the enhanced demand of coal for cement & power plants which were previously fired by the furnace oil/ natural gas. In this way, the use of coal by the above said plants will help to reduce the foreign exchange required for the import of furnace oil.

iii. All efforts are being made to further increase the export of rock salt to India & Afghanistan and the value added products to other countries.

iv. PMDC is determined to increase the profitability of the corporation by enhancing its share of coal & salt in the domestic market.

5.10.7 COMPANY�S PROFILE

i. Name and Address of the company with telephone and fax number Pakistan Mineral Development Corporation (Pvt) Limited, 13 � H/9, Islamabad. Tele: 9258701-03 Fax: 9258705-06

ii. Name of Chief Executive Brig. Muhammad Khalid S. Khokhar, SI (M)

iii. Type of Company Private Limited

iv. Annual Turnover Gross sales for the year ending 30th June 2005 was Rs. 801.709 million

(Provisional) v. Profit after Tax Rs.192.025million. vi. Type of Business/Manufacturing

Involved in the production & sale of Rock Salt & Coal. Also undertakes exploration and development of mineral resources.

vii. Auditors

M/s Anjum, Asim, Shahid, Rehman Chartered Accountants. M/s Awais, Haider, Nawaz, Rizwan Chartered Accountants

viii. Legal Advisor

Mr. M. Ashraf Malik Advocate, Islamabad.

a. Bankers Name of Bank

1. Habib Bank Limited. 2. National Bank of Pakistan. 3. First Women Bank.

5.10.8 VISION

To make the country economically viable through development of mineral resources.

5.10.9 MISSION

To make Pakistan Mineral Development Corporation, a vibrant organization, capable of bringing the mineable resources to a stage where investors (local & foreign) are attracted.

5.10.10 TOTAL STRENGTH OF THE MANAGEMENT/ EXECUTIVE/NON- EXECUTIVE /STAFF Executives 71 Regular Non-Executive Staff (BPS 1-16) 716 Contractual Non-Executive (BPS 1 � 16) 249 Sub-total 1036 Piecework basis workers/Miners 1413 Grand Total 2449

a. Province/region wise breakup

Province/ Region

Punjab Sindh NWFP Balochistan AJK FATA/FANA Total

Officers 38 11 13 06 01 02 71 Supervisors 25 01 04 03 - - 33 Sub-Total 63 12 17 09 01 02 104

Staff & Worker Khewra Salt Mines, Punjab.

230 - 02 - - - 232

Warcha Salt Mines, Punjab.

134 - - - - - 134

Kalabagh Salt Mines, Punjab.

24 - - - - - 24

Jatta/B.Khel Salt Quarries, NWFP.

01 18 - - - - 19

Sor-Range Collieries, Balochistan.

10 - 18 88 05 - 121

Sharigh Collieries, Balochistan.

04 - 02 46 - - 52

Degari Collieries. Balochistan

01 - 16 57 01 - 75

Lakhra Coal Mining Project, Sindh.

07 101 22 - 02 - 132

PMDC Brach Office, Quetta.

02 03 01 12 - - 18

PMDC Marketing Office, Lahore.

12 - - - - - 12

PMDC Head Office, Islamabad.

63 04 28 - 15 03 113

Sub-total 488 108 107 203 23 03 932 Grand Total 551 121 124 212 24 05 1036

b. Break up of regular /contractual/piece work basis workers etc.

Khewra Salt Mines 642 Warcha Salt Mines 102

Kalabagh Salt Mines - Jatta/B.Khel Salt Quarries - Sor-Range Collieries 113

Sharigh Collieries - Degari Collieries 180 Lakhra Coal Mining Project 376 Total 1413

5.10.11 SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT

PROGRAM UNDER TAKEN

i. Establishment of Schools & Colleges to provide education for the mining community.

ii. Establishment of Hospital & dispensaries to provide health services.

5.10.12 PAYMENTS TO NATIONAL EXCHEQUER

Particulars Rs. In million Income Tax 39.436 Royalty 34.720 Excise Duty 5.055 Sales Tax 118.583

Total 197.794

5.10.12 FINANCIAL HIGH LIGHTS FOR LAST FIVE YEARS

Year Ended 30th June

2001 2002 2003 2004 2005

Sales Revenue (Rs. In million)

311.706 406.799 465.273 584.864 801.709

Profit Before Tax (Rs. In million)

3.664 19.682 63.350 146.403 195.955

Shareholders Equity (Rs. In million)

10.000 10.000 10.000 10.000 10.000

Financial Ratios Debt Equity Ratio 145 : -45 140 : -40 117 : -17 52 : 48 10 : 90 Current Ratio (acid test)

1.17 1.25 1.74 1.97 1.83

Interest Cover Ratio (No. of times) 1.30 2.63 11.31 361.60 405.03

Selling & Distribution to Sales Revenue (%) 11.98 9.50 6.12 4.39 4.49

Financial charges to Sales Revenue (%) 3.98 2.96 1.32 0.07 0.06

Earning Per Share-Basic / Diluted

2.11 17.65 60.82 123.38 146.96

Dividend Per Share (%)

- - - - -

Dividend Yield (%) - - - - - Return on Capital Employed (%)

21.06 176.48 608.24 1233.75 1469.63

Fixed Assets Turnover Ration

5.982 10.372 16.771 25.023 31.452

Board of Directors

OFFICIAL

1 Mr. Ahmad Waqar Secretary P&NR (Chairman)

2 Brig Muhammad Khalid S Khokhar, SI (M) Managing Director, PMDC

3 Mr. Muhammad Iqbal Awan Financial Advisor P&NR

4 Mr. Rashid Hussain Malik Director General (Minerals) P&NR

5 Mirza Talab Hasan Director General GSP.

NON -OFFICIAL 6 Dr. Engr. Asaf Ali Qureshi

Ex- Member PCSIR 7

Prof. Engr.Abdul Ghaffar Khan Ex- Dean, Faculty of Chemical & Mining Engg UET, Lahore

8 Engr. Khalid Aziz Chief Executive Officer, Katha Digwell Coal Co.

5.11 INTER STATE GAS SYSTEMS (PVT) LIMITED

(ISGSL)

5.11.1 INTRODUCTION

Inter State Gas Systems (Pvt.) Limited (ISGSL) was incorporated on August 4, 1996 as a private limited company, wholly owned by the two main gas transmission and distribution companies of Pakistan i.e. Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited. The Company was reactivated in the year 2000 to serve as an interface between the Government of Pakistan and other external agencies for the import of natural gas. Natural gas is seen as playing an important part in supplying new power plants, plus as a means of diversifying away from expensive oil imports. As a result, natural gas usage has increased rapidly, providing more than 50% of Pakistan�s energy supplies. However, as several supply-demand studies indicate, the country�s domestic gas reserves, after reaching their peak in 2009, will rapidly start depleting after 2012-13 and by the year 2015 the country is expected to face a gas shortfall in the range of 2200-2900 mmcfd at GDP growth rates between 6.5-7.5 percent. In order to meet the energy deficit the Government of Pakistan is seeking to import natural gas from across its borders from Turkmenistan, Qatar and Iran. ISGSL is actively pursuing all three options with the governments of respective countries. Project team at ISGSL comprises of qualified professionals from the fields of engineering, law, economics and finance. Current organization structure and a list of its Board of Directors are given below. 5.11.2 COMPANY�S PROFILE i. Name and Address of the company with telephone and fax number

Interstate gas systems (Pvt) Ltd. 1st Floor, Ajmal House 27-Engeton Road, Lahore Tele No. 042-9202336 Fax: 042-9202330

ii. Name of Chief Executive Abdul Rasheed Lone iii. Type of Company Private Limited iv. Type of Business/Manufacturing v. Auditors

M/s Tanzeem & Co, Chartered Accountant vi. Legal Advisor 1. Rizvi, Isa, Angell & Afridi, Karachi. 2. Orr, Dignam & Co., Karachi. 3. Cornelius, Lan & Mufti, Lahore.

vii. Bankers Name of Bank: Bank Alfalah Limited 5.11.3 TOTAL STRENGTH OF THE MANAGEMENT/EXECUTIVE/NON- EXECUTIVE/STAFF

S.No Name of Post No. 1 Executives 12 2 Regular/Non-Executive Staff (BPS 1-16) 1 3 Contractual Non-Executive (BPS 1-16) 2 Sub-Total 15

5.11.4 TOTAL PROFESSIONALS EMPLOYED

S.No. Professional No. 1 Engineering 4 2 Finance 1 3 Economist 1 4 Accounts 1 5 Commercial Accounts 1 6 Law 1 Total 9

Board of Directors

S.No. OFFICIAL

Mr. A Rashid Lone Managing Director, ISGSL & SNGPL

Mr. Munawar B. Ahmad Managing Director, SSGC

Mr. Naeem Malik Director General (Gas), M/o P&NR

Mr. Muhammad Iqbal Awan Financial Adviser, M/o P&NR

Mr. Umer Alisherzai DG (Economic Coordination), M/o Foreign Affairs

Mr. Shaukat Hayat Durrani Additional Secretary, M/o P&NR

Mr. Aitzaz Shahbaz Chairman, Board of Directors

Mr. Javed Hussain

Annexure � I

ORGANIZATIONAL CHART OF THE MINISTRY

Annexure � II

PUBLIC SECTOR ORGANIZATIONS UNDER THE MINISTRY

Annexure - III SANCTIONED STRENGTH OF

MINISTRY OF PETROLEUM AND NATURAL RESOURCES (Main Ministry and Mineral Wing)

S.No. Name of Posts BPS No. of Posts

1 Secretary 22 1

2 Additional Secretary 21 1

3 Joint Secretary 20 2

4 Director General 20 1

5 Deputy Secretary 19 4

6 Director 19 2

7 Deputy Director 18 2

8 Section Officer/OSD 17/18 11

9 Network Administrator 18 1

10 Private Secretary 17/18 5

11 Assistant Accounts Officer 16 1

12 Superintendent 16 1

13 Assistant Incharge 15 1

14 Stenographer 15/16 14

15 Stenotypist 12 16

16 Assistant 11/15 12

17 Upper Division Clerk 7 4

18 DMO 7 1

19 Telex Operator 7 1

20 Dispatch Rider 7 1

21 Lower Division Clerk 7/5 9

22 Staff Car Driver 7/4 6

23 Daftari 4/2 2

24 Qasid 2 2

25 Naib Qasid 1 33

26 Farash 1 1

Total 135

Annexure - III

SANCTIONED STRENGTH OF MINISTRY OF PETROLEUM AND NATURAL RESOURCES

(Policy Wing) S.No. Name of Posts BPS No. of Posts

1 Director General 20 4

2 Director 19 11

3 Deputy Director 18 20

4 Assistant Director 18 15

5 Accounts Officer 17 2

6 Research Officer 17 4

7 Deputy. Asstt. Director 16 3

8 Superintendent 16 1

9 Accountant 16 1

10 Stenographer 15 10

11 Stenotypist 12 27

12 Assistant 11 16

13 Accounts Assistant 11 1

14 Draftsman 11 1

15 UDC 7 6

16 LDC 5 11

17 Ferro Printer 4 1

18 DMO 4 2

19 Driver 4 4

20 Dispatch Rider 4 1

21 Daftary 2 1

22 Naib Qasid 1 39

23 Chowkidar 1 3

24 Farash 1 2

25 Sweeper 1 3

Total 189

Grand Total 324

Ann

exur

e-IV

M

inis

try

of P

etro

leum

and

Nat

ural

Res

ourc

es

Goa

ls /

Tar

gets

Fin

anci

al Y

ear

2005

� 2

006

S.N

o.

Goa

ls /

Tar

gets

Q

1 Q

2 Q

3 Q

4 C

omp

Stat

us

Rev

iew

G: 1

D

rilli

ng o

f Exp

lora

tory

and

Dev

elop

men

t wel

ls fo

r O

il an

d G

as.

T: 1

D

rillin

g of

10

Expl

orat

ory

wel

ls a

nd 1

5 D

evel

opm

ent w

ells

.

T: 2

: D

rillin

g of

10

Expl

orat

ory

wel

ls a

nd 1

5 D

evel

opm

ent w

ells

.

T: 3

: D

rillin

g of

10

Expl

orat

ory

wel

ls a

nd 1

5 D

evel

opm

ent w

ells

.

T: 4

: D

rillin

g of

10

Expl

orat

ory

wel

ls a

nd 1

5 D

evel

opm

ent w

ells

.

G: 2

E

nhan

cing

indi

geno

us o

il an

d ga

s pr

oduc

tion

T: 1

Pr

oduc

tion

of O

il (B

arre

ls p

er D

ay):

6600

0 an

d G

as (M

MC

FD):

3750

.

T: 2

: Pr

oduc

tion

of O

il (B

arre

ls p

er D

ay):

6850

0 an

d G

as (M

MC

FD):

3800

.

T: 3

: Pr

oduc

tion

of O

il (B

arre

ls p

er D

ay):

7100

0 an

d G

as (M

MC

FD):

4000

.

T: 4

: Pr

oduc

tion

of O

il (B

arre

ls p

er D

ay):

6650

0 an

d G

as (M

MC

FD):

3800

.

G: 3

D

evel

opm

ent a

pla

n fo

r in

crea

sing

oil

and

gas

prod

uctio

n

T: 1

: C

onsu

ltatio

n w

ith E

&P

com

pani

es.

T: 2

: R

ecom

men

datio

ns o

f the

E&

P co

mpa

nies

T: 3

: Fi

naliz

atio

n of

the

plan

in c

onsu

ltatio

n w

ith c

once

rned

Min

istri

es.

T: 4

: A

ppro

val o

f the

Gov

ernm

ent.

S.

No.

G

oals

/ T

arge

ts

Q1

Q2

Q3

Q4

Com

p St

atus

R

evie

w

G: 4

D

evel

opm

ent o

f mar

ketin

g st

rate

gy to

att

ract

fore

ign

in

vest

men

t in

Petr

oleu

m fo

r ex

plor

atio

n of

hyd

roca

rbon

in

Pak

ista

n.

T: 1

: D

evel

op m

arke

ting

strat

egy

of n

ew a

reas

/ bl

ocks

.

T: 2

: O

rgan

izin

g an

int

erna

tiona

l co

nfer

ence

on

expl

orat

ion

and

futu

re p

rosp

ects

of

oil a

nd g

as in

Pak

istan

.

T: 3

: R

evie

w a

nd fo

llow

up

of th

e m

arke

ting

stra

tegy

.

G: 5

E

xpan

sion

of S

aind

ak C

oope

r G

old

Proj

ect,

Bal

ochi

stan

(US$

22

Mill

ion)

T: 1

Pr

epar

atio

n of

exp

lora

tion

prog

ram

me.

T: 2

: Ex

ecut

ion

of e

xplo

ratio

n pr

ogra

mm

e.

T: 3

: Es

timat

ion

of o

re re

serv

es a

nd la

b sc

ale

test.

T: 4

: Fi

nal d

ecis

ion

by M

CC

on

initi

atio

n of

pro

ject

.

G: 6

D

evel

opm

ent o

f Rek

o D

iq C

oppe

r-G

old

Proj

ect

Bal

ochi

stan

(H-4

Sta

rter

Pro

ject

) (U

S$15

0 M

illio

n)

T: 1

C

ompl

etio

n of

min

e en

gine

erin

g, c

omm

ence

men

t of

dat

a pr

oces

sing

and

m

etal

lurg

ical

stud

ies.

Fina

lizat

ion

of s

hare

hold

er a

gree

men

t.

T: 2

: C

ompl

etio

n of

da

ta

proc

essi

ng

and

met

allu

rgic

al

studi

es,

com

plet

ion

of

envi

ronm

enta

l and

soc

ial i

mpa

ct s

tudy

, acq

uirin

g of

min

ing

leas

e.

T: 3

: En

viro

nmen

tal a

ppro

val,

com

plet

ion

of m

iner

al a

gree

men

t and

oth

er a

ppro

vals,

sta

rting

con

stru

ctio

n of

wat

er p

ipel

ine.

T: 4

: C

ompl

etio

n of

wat

er p

ipel

ine.

Sta

rting

con

struc

tion

of a

cces

s roa

ds, a

irstri

p an

d in

frastr

uctu

re.

S.

No.

G

oals

/ T

arge

ts

Q1

Q2

Q3

Q4

Com

p St

atus

R

evie

w

G:

7 Fa

cilit

atio

n in

com

mis

sion

ing

of 6

00 M

W p

lant

by

M/s

She

nhua

in T

har

coal

fiel

d.

T: 1

C

ompl

etio

n of

stud

y fo

r com

mis

sion

ing

of p

ower

pla

nt.

G:

8 R

evie

w o

f Nat

iona

l Min

eral

Pol

icy.

T: 1

A

ppoi

ntm

ent o

f con

sulta

nt.

T:2

R

evie

w o

f exi

sting

Pol

icy

and

prep

arat

ion

of n

ew d

raft

polic

y.

T: 3

Fi

naliz

atio

n of

dra

ft in

con

sulta

tion

with

pro

vinc

es.

T:4

Fi

nal a

ppro

val o

f the

Gov

ernm

ent.

G: 8

Fe

asib

ility

stu

dy o

n G

asifi

catio

n of

Tha

r C

oal,

Dis

tric

t T

harp

arke

r, S

indh

. T

: 1

Sele

ctio

n of

con

sulta

ncy

firm

for c

ondu

ctin

g fe

asib

ility

stud

y.

T: 2

: La

bora

tory

sca

le s

tudy

by

cons

ulta

ncy

firm

.

T: 3

: Pr

e-fe

asib

ility

stud

y of

Tha

r coa

l gas

ifica

tion.

T: 4

: B

anka

ble

feas

ibili

ty st

udy

base

d on

com

mer

cial

sca

le te

st.

G: 9

M

arke

ting

stra

tegy

for

Min

eral

s exp

lora

tion/

deve

lopm

ent.

T: 1

A

rran

ging

an

inte

rnat

iona

l eve

nt i.

e. �M

ines

& M

oney

200

5� in

Lon

don.

T: 2

: Fo

llow

up

�Min

e &

Mon

ey 2

005�

and

par

ticip

atio

n in

oth

er in

tern

atio

nal e

vent

s.

T: 3

: Le

sson

s lea

rnt �

Rev

iew

of t

he M

arke

ting

stra

tegy

for n

ext y

ear.

S.

No.

G

oals

/ T

arge

ts

Q1

Q2

Q3

Q4

Com

p St

atus

R

evie

w

G:

10

Res

truc

turi

ng o

f Geo

logi

cal S

urve

y of

Pak

ista

n.

T: 1

Se

lect

ion

and

appo

intm

ent o

f int

erna

tiona

l con

sulta

nt w

ith d

onor

ass

ista

nce

for

restr

uctu

ring

/ re-

stre

ngth

enin

g of

GSP

.

T: 2

Su

bmis

sion

of f

irst d

raft

repo

rt fr

om th

e C

onsu

ltant

.

T: 3

C

onsu

ltatio

n w

ith p

rovi

ncia

l aut

horit

ies a

nd su

bmis

sion

of t

he F

inal

Rep

ort.

T: 4

C

onsid

erat

ion

and

appr

oval

of A

ctio

n Pl

an b

y G

OP.

G: 1

1

Res

truc

turi

ng a

nd r

e-st

reng

then

ing

of P

akis

tan

Min

eral

Dev

elop

men

t Cor

pora

tion

(PM

DC

)/Lak

ra C

oal

Dev

elop

men

t Cor

pora

tion

(LC

DC

). T

: 1

App

oint

men

t of C

onsu

ltant

and

aw

ard

of c

ontra

ct.

T: 2

: R

ecei

pt o

f rep

ort f

rom

the

Con

sulta

nt.

T: 3

: Fi

naliz

atio

n of

Res

truct

urin

g Pl

an.

T: 4

: A

ppro

val /

Impl

emen

tatio

n.

G: 1

2 Fo

rmul

atio

n of

pol

icy

fram

ewor

k on

Oil/

Petr

oleu

m.

T: 1

: Fo

rmul

atio

n of

pol

icy

guid

elin

es b

y th

e co

nsul

tant

in

cons

ulta

tion

with

all

stake

hold

ers.

T: 2

: R

evie

w o

f the

con

sulta

nt�s

repo

rt.

T: 3

: Fi

naliz

atio

n/ap

prov

al o

f rep

ort.

T: 4

: Im

plem

enta

tion

of re

port.

S.

No.

G

oals

/ T

arge

ts

Q1

Q2

Q3

Q4

Com

p St

atus

R

evie

w

G: 1

3 Fo

rmul

atio

n of

CN

G P

olic

y.

T: 1

: Fo

rmul

atio

n of

dra

ft C

NG

pol

icy.

T: 2

: C

onsu

ltatio

n w

ith th

e st

akeh

olde

rs.

T: 3

: A

ppro

val o

f the

pol

icy.

T: 4

: Is

suan

ce o

f pol

icy

guid

elin

es to

OG

RA

.

G: 1

4 In

crea

se g

as c

onne

ctio

ns:

a) I

ndus

tria

l:

60

0 b)

Dom

estic

:

275

000

c) C

omm

erci

al:

5

000

T: 1

: a)

Indu

stria

l: 15

0 b)

Dom

estic

: 600

00

c) C

omm

erci

al:1

200

T: 2

: a)

Indu

stria

l: 15

0 b)

Dom

estic

: 750

00

c) C

omm

erci

al:1

300

T: 3

: a)

Indu

stria

l: 15

0 b)

Dom

estic

: 750

00

c) C

omm

erci

al:1

300

T: 4

: a)

Indu

stria

l: 15

0 b)

Dom

estic

: 650

00

c) C

omm

erci

al: 1

200

G: 1

5 T

o en

hanc

e L

PG p

rodu

ctio

n

T: 1

: To

pro

duce

125

0 to

nnes

LPG

per

day

.

T: 2

: To

pro

duce

130

0 to

nnes

LPG

per

day

.

T: 3

: To

pro

duce

135

0 to

nnes

LPG

per

day

.

T: 4

: To

pro

duce

140

0 to

nnes

LPG

per

day

.

S.N

o.

Goa

ls /

Tar

gets

Q

1 Q

2 Q

3 Q

4 C

omp

Stat

us

Rev

iew

G: 1

6 G

as I

mpo

rts f

rom

Iran

/ Q

atar

/ T

urkm

enis

tan.

T: 1

: A

ppoi

ntm

ent o

f Con

sulta

nt.

T: 2

: Pr

iorit

izat

ion

of th

e pr

ojec

t and

inte

rim re

port

on p

roje

ct st

ruct

ure.

T: 3

: C

apac

ity b

uild

ing

of M

PNR

/pro

ject

team

(ISG

SL)

T: 4

: D

evel

opm

ent o

f Dra

ft A

gree

men

ts.

G: 1

7

Res

truc

turi

ng o

f OG

DC

L o

n pr

ofes

sion

al li

nes

(PE

TR

ON

AS,

Mal

aysi

a M

odel

be

kept

in v

iew

). T

: 1

App

oint

men

t of C

onsu

ltant

for R

estru

ctur

ing

Plan

of O

GD

CL.

T: 2

: D

evel

opm

ent

of d

raft

restr

uctu

ring

plan

/ s

ubm

issi

on o

f dr

aft

restr

uctu

ring

plan

in th

e M

inis

try.

T: 3

: Fi

naliz

atio

n of

the

Dra

ft R

estru

ctur

ing

Plan

.

T

: 4:

Impl

emen

tatio

n �

initi

atio

n pr

oces

s.

G: 1

8

Man

agem

ent o

f GO

P�s

wor

king

inte

rest

in u

pstr

eam

Pe

trol

eum

join

t ven

ture

s.

T: 1

To

inv

est

Rs.

477.

3 m

illio

n an

d to

ach

ieve

rev

enue

ear

ning

s of

Rs.2

,100

m

illio

n.

T: 2

: To

inve

st R

s. 65

2.2

mill

ion

and

to a

chie

ve re

venu

e ea

rnin

gs o

f Rs.2

,300

m

illio

n.

T: 3

: To

inve

st R

s. 66

8.7

mill

ion

and

to a

chie

ve re

venu

e ea

rnin

gs o

f Rs.2

,400

m

illio

n.

T: 4

: To

inve

st R

s. 90

8.3

mill

ion

and

to a

chie

ve re

venu

e ea

rnin

gs o

f Rs.2

,500

m

illio

n.

S.N

o.

Goa

ls /

Tar

gets

Q

1 Q

2 Q

3 Q

4 C

omp

Stat

us

Rev

iew

G: 1

9 D

evel

opm

ent a

nd e

xplo

itatio

n of

Dud

dar

Lea

d Z

inc

Proj

ect (

US$

72

mill

ion)

. T

: 1

Des

igni

ng p

roce

ssin

g pl

ant.

G: 2

0 Fe

asib

ility

stu

dy o

n G

asifi

catio

n of

Tha

r C

oal,

Dis

tric

t T

harp

arke

r, S

indh

. T

: 1

Sele

ctio

n of

con

sulta

ncy

firm

for c

ondu

ctin

g fe

asib

ility

stud

y.

T: 2

: La

bora

tory

sca

le s

tudy

by

cons

ulta

ncy

firm

.

T: 3

: Pr

e-fe

asib

ility

stud

y of

Tha

r coa

l gas

ifica

tion.

T: 4

: B

anka

ble

feas

ibili

ty st

udy

base

d on

com

mer

cial

sca

le te

st.

G: 2

1

Inst

alla

tion

of C

oast

al R

efin

ery.

T: 1

Pu

blic

atio

n of

Exp

ress

ion

of I

nter

est

for

setti

ng u

p of

Coa

stal

Ref

iner

y at

K

halif

a.

T: 2

: Fa

cilit

atio

n of

pre

para

tion

of B

lue

Boo

k.

T: 3

: Pr

oces

sing

of E

OI b

y B

OI f

or p

ropo

sed

refin

ery

proj

ect a

nd e

valu

atio

n of

EO

I if

rece

ived

any

.

T: 4

: Fi

naliz

atio

n/ap

prov

al fo

r aw

ard

of p

roje

ct.

G: 2

2

Form

ulat

ion

of L

PG P

olic

y.

T: 1

Fo

rmul

atio

n of

dra

ft LP

G p

olic

y.

T: 2

: C

onsu

ltatio

n w

ith st

akeh

olde

rs.

T: 3

: A

ppro

val o

f the

pol

icy.

T: 4

: Is

suan

ce o

f pol

icy

guid

elin

es to

OG

RA

S.N

o.

Goa

ls /

Tar

gets

Q

1 Q

2 Q

3 Q

4 C

omp

Stat

us

Rev

iew

G: 2

3 E

xpan

sion

of g

as in

fras

truc

ture

by

layi

ng o

f T

rans

mis

sion

and

Dis

trib

utio

n ne

twor

k.

Tra

nsm

issi

on (k

m) :

168

D

istr

ibut

ion

(km

):

473

9 T

: 1:

Tran

smis

sion

(km

) :

26

Dis

tribu

tion

(km

) :

1002

T: 2

: Tr

ansm

issi

on (k

m) :

30

D

istri

butio

n (k

m) :

12

46

T: 3

: Tr

ansm

issi

on (k

m) :

8

D

istri

butio

n (k

m) :

12

48

T: 4

: Tr

ansm

issi

on (k

m) :

104

D

istri

butio

n (k

m) :

12

43

G: 2

4 Im

port

of L

NG

T: 1

: A

ppoi

ntm

ent o

f Con

sulta

nt

T: 2

: Su

bmis

sion

of d

raft

repo

rt on

requ

irem

ent/t

imin

g of

the

LNG

impo

rt pr

ojec

t.

T: 3

: Fi

nal R

epor

t/App

rova

l/Dec

isio

n

G: 2

5

Intr

oduc

tion

and

Ado

ptio

n of

E-G

over

nmen

t.

T: 1

: A

rran

ging

add

ition

al IT

pro

fess

iona

ls.

T: 2

: B

asic

IT tr

aini

ng fo

r BPS

-5 a

nd a

bove

em

ploy

ees /

off

icer

s.

T

: 3:

Net

wor

king

and

com

pute

rizat

ion

with

the

help

of I

T &

Tel

ecom

Div

isio

n.

LIST OF ACRONYMS

Acronyms Description

ADB Asian Development Bank

APL Attock Petroleum Ltd

ARL Attock Refinery Ltd

AAS Annual Automation Control Service

BCDP Bobi Complex Development Project

BME Bolan Mining Enterprises

BPL Bosicor Pakistan Ltd

CIDA Canadian International Development Agency

CNG Compressed Natural Gas

COCO Company Owned Company Operated

COPL Caltex Oil Pakistan Limited

CPECC China Petroleum Engineering & Construction Corporation

CRM Customer Relationship Management

CWP Community Welfare Program

DEP Dakhni Expansion Project

ECA Export Credit Agencies

ECC Economic Coordination Committee

EOI Expression of Interest

EPC Engineering, Procurement and Construction

ERP Enterprise Resource Planning

FO Furnace Oil

FOTCO Fauji Oil Terminal Company

GHPL Government Holding Private Limited

GIREP Gas Infrastructure Rehabilitation & Expansion Project

GOP Government of Pakistan

GSP Geological Survey of Pakistan

HDIP Hydrocarbon Development Institute of Pakistan.

HSD High Speed Diesel

IMC Independent Monitoring Consultant

JICA Japan International Cooperation Agency

Acronyms Description

JMC Joint Ministerial Commissions

LCDC Lakhra Coal Development Company

LPG Liquid Petroleum Gas

MCC Metallurgical Construction Corporation

MCR Mid-Country Refinery

MFM Mehmood Kot - Faisalabad - Machike

MOU Memorandum of Understanding

MPNR Ministry of Petroleum and Natural Resources

MRDL Material Resources Development Limited

NMP National Mineral Policy

NRL National Refinery Limited

OCAC Oil Company Advisory Committee

OGDCL Oil and Gas Development Company Limited

OGRA Oil and Gas Regulatory Authority

OHSAS Occupational Health Safety Administration Series

OMC Oil Marketing Companies

PDL Petroleum Development Levy

PMDC Pakistan Mineral Development Corporation

PPL Pakistan Petroleum Limited

PRL Pakistan Refinery Ltd

PSDP Public Sector Development Program

PSOCL Pakistan State Oil Company Limited

RE Rheinbraun Engineering

SCGP Saindak Copper Gold Project

SFGCS Sui Field Gas Compressor station

SML Saindak Metals Limited

SNGPL Sui Northern Gas Pipeline Limited

SPL Shell Pakistan Limited

SSGCL Sui Southern Gas Company Limited

TD Target Depth

WOPP White Oil Pipeline Project