FINAL PROJECT OF Oil and Petroleum

Industry of Pakistan

MARKETING RESEARCH
Emergence of Shell, Caltex,Attock & PSO
MARKETING RESEARCH
MS MANAGEMENT SCIENCES
FIRST SEMESTER
 GROUP MEMBERS
- SARA NOOR
- SADIA TAQIR
- NOUMAN AHMED
- MAHTAB ALAM
- AZHAR UDIN
Contents
Overview ............................................................................................................................ 5
Introduction ........................................................................................................................ 6
Composition of Hydrocarbons ....................................................................................... 11
Sector division in Industry: ............................................................................................ 12
Oil Marketing Companies (OMC): ................................................................................ 12
Current Status................................................................................................................ 12
Volumetric Sales (Industry): .......................................................................................... 14
VOLUMETRIC INCREASE:........................................................................................ 15
Shell.................................................................................................................................. 31
Shell Revolutionizing Oil Transport .............................................................................. 31
Becoming Royal Dutch Shell ........................................................................................ 32
Post-War Expansion and The Oil Crisis ......................................................................... 32
Tapping New Resources and Expansion ........................................................................ 32
Caltex (Chevron Pakistan Limited).................................................................................... 33
For imported products: ...................................................................................................... 37
Oil and Gas sector structure:.......................................................................................... 37
Shell Retail.................................................................................................................... 38
Shell Refinery Limited .................................................................................................. 38
Shell Govt Receivables.................................................................................................. 38
Lubricants ..................................................................................................................... 39
Social Investment .......................................................................................................... 40
HSSE ............................................................................................................................ 40
Product Line ..................................................................................................................... 42
BUSINESS LINE:............................................................................................................. 42
RETAIL: ....................................................................................................................... 42
LUBRICANTS AND CHEMICALS: ............................................................................ 42
COMMERICAL FUELS IN BULKS: ........................................................................... 42
DISTRIBUTION CHANNELS: .................................................................................... 43
CALTEX.PRODUCTS.LINE: .......................................................................................... 43
2)Havoline Ultra V 501272 ....................................................................................... 44
3)Havoline Ultra R 501276........................................................................................ 44
 Havoline ProDS Fully Synthetic ECO 5 .................................................................... 45
Havoline ProDS Fully Synthetic LE 500002 .............................................................. 46
Four Stroke Lawnmower and Stationary Engine Oil 501601 ...................................... 47
TWO STROKE ENGINE OILS Super Outboard 3 (Green) 560319 ........................... 48
Havoline Super 2T 500676 ........................................................................................ 48
Two Stroke Lawnmower Oil 501600 ......................................................................... 49
TRACTOR OILS Super Tractor 500421.................................................................... 49
Delo 400 XLE Synblend 500289 ............................................................................... 50
Market Share..................................................................................................................... 52
Market Share of Shell .................................................................................................... 52
Political Factor .............................................................................................................. 57
Economical Factor ........................................................................................................ 58
Social Factor ................................................................................................................. 59
Technological factor ...................................................................................................... 59
Environmental Factor .................................................................................................... 60
Legal Factors................................................................................................................. 60
SWOT Analysis ................................................................................................................ 61
STRENGTH: ................................................................................................................ 62
WEAKNESS:................................................................................................................ 63
OPPORUNITIES: ......................................................................................................... 63
THREATS: ................................................................................................................... 64
Powers and Functions:................................................................................................... 66
GOVERNMENT OF PAKISTAN ..................................................................................... 67
MINISTRY OF LAW, JUSTICE, HUMAN RIGHTS AND PARLIAMENTARY AFFAIRS
......................................................................................................................................... 67
ORDINANCE NO. XVII OF 2002 .................................................................................... 67
ORDINANCE ............................................................................................................... 67
POLICY GUIDELINES ................................................................................................ 68
LICENCES ................................................................................................................... 68
Pakistan: Revenue minus production cost of oil, percent of GDP ................................ 72
Fuel extraction industry of Pakistan................................................................................... 72
References ........................................................................................................................ 73
Overview
The pioneer of the natural gas industry in the country, Pakistan Petroleum Limited (PPL) has
been a frontline player in the energy sector since the mid-1950s. As a major supplier of natural
gas, PPL today contributes over 20 percent of the country‘s total natural gas supplies besides
producing crude oil, Natural Gas Liquid and Liquefied Petroleum Gas.
The company‘s history can be traced back to the establishment of a public limited company in

June 1950, with major shareholding by Burmah Oil Company (BOC) of the United Kingdom for

exploration, prospecting, development and production of oil and natural gas resources. In

September 1997, BOC disinvested from the Exploration and Production (E&P) sector worldwide

and sold its equity in PPL to the Government of Pakistan (GoP). Subsequently, the government

reduced its holding through an initial public offer in June 2004, which was further decreased

with the initiation of the Benazir Employees Stock Option Scheme (BESOS) in August 2009

when PPL employees were allotted 12 percent shares from the government‘s equity. More

recently, GoP further disinvested its 5 percent shares, around 3.55 percent of the total paid-up

capital, in PPL through Secondary Public Offering in 2014. Currently, the

company‘s shareholding is divided between the government, which owns about 68

percent, PPL Employees Empowerment Trust that has approximately 7 percent — being shares

transferred to employees under BESOS — and private investors, who hold nearly 25 percent.

PPL has acquired 100 percent shareholding of MND E&P Limited, a company incorporated in
England and Wales. The name of the subsidiary has been changed to PPL Europe E&P Limited.
Introduction

Word petroleum comes from mixture of Greek and Latin as (Greek; Petra ―rock‖ &

Latin; Oleum ―oil‖) rock oil or crude oil which is naturally occurring phenomenon. Inflammable

liquid consisting of various amount of associated organic compound that are found in geologic

formations beneath the surface of Earth.

For the very first-time petroleum was formed by refining of kerosene, and is done by Russian

Dubinin brothers in their factory in 1823 (Korai, Bullo & Abro, 2018). In 1846 refining process

of coal from kerosene was discovered by Nova Scotian Abraham Pineo Gesner, and this process

was further improved by the lgnacyu Kasiewicz in 1852. The first rock oil mine was built near

krosno in bobrka in central European Galicia in 1853. The fractionate process for petroleum

done by distillation was discovered by Benjamin Silliman in New haven in 1854. The first

modern Russian Refinery in the mature oil fields was built by Meerzoeff at Baku in 1861 and, it

counts for the 90% of world‘s oil (Korai, Bullo & Abro, 2018).

Commercial oil well was drilled in Poland in 1853 for the very first time in the world and

is then lead by first oil refinery in Jaslo ―Poland‖. Romania was the only country in the world

that have its crude oil output officially recorded in international statistics, that shows 275 tons of

available crude oil by the end of 19th century the Russian Empire. The James Miller Williams

dug the first oil well in Canada, Oil springs in North America and, then in Ontario in 1858. The

petroleum industry in US was began by Edwin Drake (69-foot), by drilling oil well in 1859.
 The oil industry grew throughout the 18th century and, it became a major concern in the

early part of the 20th century. The introduction of concept of internal combustion engine

provided the demand that has largely sustained oil industry to current state of high demand for

insure the sustainability.

During 19th century, there found a series of oil fields around the globe. But access to oil

was and still is a central focus for several military conflicts of the current era, including the cause

of worse destructions in World War II, where it was facilitated as a major strategic asset and was

extensively bombed.

Oil industry over takes the coal industry during mid of 1950s and, later following the

1973 and 1979 energy crises the matter of focus circulated around the oil supply levels. Which

reflects that oil is a limited and most important resource and will be recognize by the most

powerful economical viable energy source in future.

While talking about the Pakistan industry, first Oil Company was found in 1974 when

government merged the National oil (PNO) and Dawood Petroleum limited (DPL) as Premiere

Oil Company limited (POCL). State Oil Company limited was found on August 23, 1976 by

renaming the existing institute Petroleum Storage Development Corporation (PSDC). Finally by

the merger of the Premier Oil Company Limited and State Oil Company Limited at the end of

1976, Pakistan state oil (PSO) was found. After formation of Pakistan state Oil series of

comprehensive renewal programs were occurred, which lead to fully developed and functional

implemented structure in 2004.

Along with the PSO there exists numbers of other market players such as Caltex, Shell, Zic,

Castrol, Hi-tech lubricants, PARCO, Puma Energy, Attock Oil refining and many more.
Pakistan‘s economy is growing at a very steady rate, where it comprises of petroleum, motor oils

& oil filters, gas, power and coal.

Pakistan has to import large quantity of oil and oil related products to satisfy the growing

domestic oil demand because of limited reserves of oil and gas with in country. First oil drilled

was found in 1866 at Kundal in the upper region of Indus Vally, and is further lead by numbers

of small other drills production of oil started in Baluchistan (Khattan). The first series of

commercial oil discoveries was made in Punjab (Potwar Basin) in 1915.

Pakistan has long been considered a petroleum province; the first well was drilled in 1866 at

Kundal in the upper region of Indus Vally. Shallow wells were drilled in the following years, and

from 1886, small scale production of oil started in Khattan (Balochistan). In 1915, the first of a

series of commercial oil discoveries was made in the Potwar basin (Punjab). The first major gas

discovery (9.6 TCF) was made in the Central Indus basin by Pakistan Petroleum Ltd. (majority

shareholder was Burmah Oil) in 1952 at Sui (in Balochistan).

So far 728 exploratory wells have been drilled across the country, out of which a total 219

remained successful. The rate in oil and gas exploration was ‗very high‘ in Pakistan as compared

to other discoveries at the international level.

There are almost four major national oil companies currently involved in the sector, namely

Oil and Gas development corporation limited (OGDCL), Pakistan petroleum limited (PPL),

Pakistan state oil company limited (PSO) and Pakistan oilfields limited (POL). These major

companies act as joint ventures and partnership between some domestic firms and with different

international companies. These four listed companies have cumulative market capitalization of

PKR 765 Billion and hold 22.5% weightage in KSE- 100 index. Major international oil
companies currently involved in the business in country are BP (UK), ENI (Italy) OMV

(Austria) and Orient petroleum (Canada).

Oil consumption of different energy products is dominated by Gasoline and Fuel oil. In

Pakistan transport sector in the biggest user of the petroleum products which accounts about 48

percent followed by power generation which uses about 36 percent, and industrial sector which

has a share of 12 percent while remaining is shared by the residential sector.

Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40%

of total energy consumption in the United States, but is responsible for only 2% of electricity

generation. Petroleum's worth as a portable, dense energy source powering the vast majority of

vehicles and as the base of many industrial chemicals makes it one of the world's most important

commodities.

Petroleum Exploration in Pakistan began more than a century ago. The first well was drilled in

1866 at oil seepage Kundal in the Mianwali District of Punjab Province. Right after seven year

of World's 1st well.

Activities continued during the last quarter of the 19th century with sporadic attempts to drill

shallow boreholes, as in rest of the world, the earlier exploration focused on seep-ages. Mainly in

the Sulaiman Fold Belt. Discovery of oil at Khattan in Balochistan was the main success where

thirteen shallow wells produced 25,000 barrels of oil between 1885 and 1892. The Government

of Indio-Pak controlled the drilling activities during this early phase.

Up to 1883, a number of shallow wells were drilled by the Government agencies, all near

seepages. However, due to rapid decline in production the Government agencies subsequent lost

their interest in oil exploration. The problems with drilling in areas of oil seepage were the low

rate of oil production and short life. With the advancement of knowledge about origin, migration
and occurrence of petroleum, and development of drilling technology, the exploration was

extended to other sedimentary regions. The first commercial success came with the

drilling of Khaur-1 by Attock Oil Company in 1915, on a surface anti-cline in the Potwar

Basin. Oil was discovered in sands in the lower part of the Miocene formation and a total of 396

shallow wells were drilled in the field from 1915 to 1954. Steady exploration drilling continued

in the Potwar Basin and led to the discovery of three oil fields. Pakistan's first oil field was in the

late 1952 in Baluchistan near a giant Sui gas field. The Toot oil field was not discovered in the

early 1960s in the Punjab. It covers 122.67 square kilometers (47.36 sq. mi). Pakistan Petroleum

and Pakistan Oilfields explored and began drilling these field with Soviet help in 1961 and

activity began in Toot during 1964.

The Toot area is one of the oldest oils producing regions in Pakistan with the first oil well was

drilled in 1964 when President Ayub Khan encouraged a mineral development policy. It is

located in the Potwar region, Punjab Province, which It is located approximately 135 km

southwest of the capital city of Islamabad. In 1964 the first well was drilled. The commercial

production started in 1967. There are about 60 million barrels of oil in place with 12%-15% of

which is recoverable. At its peak during 1986, the field was producing approximately 2,400

barrel of oil per day. It has grown steadily since then, producing both oil and, to a lesser degree,

natural gas. Oil production was entirely confined to the Potwar Plateau till 1981, when Union

Texas Pakistan discovered its first oil-field in Lower Sindh. By 1998-1999, the Lower Sindh gas-

fields were producing more oil than the Potwar Plateau. Since then, new deposits have

also been found here.

In 1968 after OGDC discovered Tut Oilfield (1967) and POL discovered oil at Meyal

(1968) several foreign companies began to show interest in Pakistan. As a result, the
Government of Pakistan signed agreements with American Oil Company (AMOCO) and

Wintershall in 1969, the former for onshore and later for offshore Indus Basin. Marathon Oil

Company of USA was also granted huge Concession in 1973 along the Makran Coast, half

onshore and half offshore. Wintershall withdraw after drilling three dry offshore wells and

Marathon closed its operations after drilling one onshore and one offshore well. Amoco

continued its drilling programmed but without success in Middle Indus Basin. In 1976 OGDC

announced the discovery of condensate gas field at Dhodak and discovered gas at Pirkoh in

(1977).

Composition of Hydrocarbons

While counting the composition of crude oil, it composes of mostly alkanes and cyclical alkanes

along with various aromatic compounds. The molecular composition for various oils products

varies but them exist a narrow limit extreme that is necessary to be followed as;

Element Percentage
Carbon 83 to 87%
Hydrogen 10 to 14%
Nitrogen 0.1 to 2%
Oxygen 0.05 to 1.5%
Sulfur 0.05 to 6.0%
Metals < 0.1%

In crude oil compositions, four types of hydrocarbon molecules are present. Crude oil varies in
their properties as in terms of varying percentage of associate molecules as;

Composition by weight
Hydrocarbon Average Range
Paraffin 30% 15 to 60%
Naphthenic 49% 30 to 60%
Aromatics 15% 3 to 30%
Asphaltic 6% Remainder
Sector division in Industry:

The oil associated industry is divided into two major sectors, known as ―upstream and

downstream‖. The upstream oil sector is also known as the ‗Exploration and Production‘ (E&P) sector.

Main operations of the sector include searching for potential natural gas and crude oil fields and

subsequently drilling and operating these sites for exploration of these resources. The downstream sector

includes ‗Refining and Marketing‘ (R&M) sector which involves refining of petroleum crude oil and the

processing and purifying of raw natural gas as well as the marketing and distribution of the final products.

Oil Marketing Companies (OMC):

There are almost 12 licensed operators majority of which are being captured by the government

own entities, Pakistan State Oil (PSO) with a market share of 55%, Shell Pakistan Limited

(Shell), Attock Petroleum Limited (APL), Total Parco Pakistan Limited/Total Parco Marketing

Limited

Current Status

During Mid Nineties to the end of the century companies like Lasmo (Now Eni), Premier, Shell

along with new comers like Tullow Oil of Ireland and BHP of Australia became active and as a

result gas was discovered at Sara, Suri, Chachar, Zamzma, Bhit and at Zarghun, all in the Middle

Indus Basin and Kirthar province except Zarghun which is located in Bolan Concession in

Baluchistan An Hungarian oil company, MOL, Polish Oil & Gas Company of Poland and

Malysia‘s Petronas were also grained Concessions. Polish Oil and Gas drilled a dry hole in

Sabzal Concession, N.E. of Mari but Petronas made a gas discovery in their Mehar Block. MOL
is currently drilling an exploratory well in Tal Concession in Bannu district. Recently OGDCL

made a break through when oil was discovered for the first time in Kohat region at Chanda

(former Shakardara Structure) from the Datta Formation of Jurassic. OGDC also made two oil

discoveries in their Sinjhoro Block in Sanghar district.

The Exploration in offshore regions which had started in 1961 remained limited to the drilling of

only eleven exploratory wells of which nine were located in the Indus offshore and two off the

Makran Coast. OGDC‘s Pak Can-1 drilled during 1985-86 was the first one to establish the

presence of hydrocarbons (gas) on the continental shelf but in sub-commercial quantities. The

last well drilled in Indus Offshore region was Sadaf-1 by Occidental. This well was also a

commercial failure. Most recently UMC (later Ocean) drilled a well near Pasni in offshore

Makran. The well apparently did not reach the objective Punjgur sandstone.

At present four blocks in the Indus Offshore region are held under license two by Total, one by

Shell and the fourth one by British Gas. Ocean Oil has two Offshore / Onshore adjacent blocks

along the Makran Coast. The lack of success and high cost of exploration has mainly caused the

slow pace of exploration in offshore areas although the prospects of locating upstands like the

giant Bombay High of India cannot be ruled out.

―Oil and gas regulatory authority (OGRA) has issued licenses to a number of new players

while additional new licenses are expected to be issued on account of which competition in the

industry is expected to increase.”

Table 1: Oil & Gas Sector Structure and Major Players

Pakistan Oilfields Limited
Pakistan Petroleum Limited
Oil & Gas Exploration Companies OGDCL
Mari Petroleum Company
Limited
 Sui Southern Gas
Company(SSGC)
Sui Northern Gas
Pipelines(SNGPL)
Attock Refinery Limited
Byco Petroleum Limited
Oil Refineries Pak Arab Refinery Limited
Pakistan Refinery Limited
National Refinery Limited
Pakistan State Oil (PSO)
Attock Petroleum Limited
Oil Marketing Companies Shell Pakistan Limited
Hascol Petroleum Limited

Volumetric Sales (Industry):

In the Energy mix of Pakistan, petroleum accounts for approximately one third of its total value.

Petroleum consumption grew at a Compound Annual Growth Rate (CAGR) of 2% over the last

20 years (1995-2015).Petroleum sales witnessed a growth of 4.7% during FY16 and amounted to

22.4mtons (FY15: 21.4mtons). High Speed Diesel (HSD), Motor Gasoline (MOGAS) and

Furnace oil (FO) contribute nearly 95% to total petroleum sales. Product-wise volumetric

growth was observed in the retail fuel segment (MOGAS and HSD) while FO off-take remained

stagnant with the availability of Liquefied National Gas (LNG). However, proportion of FO in

total petroleum sales remained the highest at around 40%. In percentage terms, sales of MOGAS

and HSD increased by 18% and 3%, respectively. Higher increase in sales of MOGAS was due

to lower prices (higher purchasing power for the population) and non-availability of CNG.

Increase in HSD sales was primarily due to increased infrastructure development spending by the

government and lower prices.

Motor Gasoline, High Speed Diesel, Furnace Oil

VOLUMETRIC INCREASE:

According to Oil Companies Advisory Limited (OCAC) provides the identification report

of volumetric increase in the oil and petroleum products as ―26.9m‖ tons till end of 2020. While

talking about individual increase in products are characterized as 10 % increase in MOGAS, 2%

increase in HSD, for FO report estimates no increase, and it will remain at the constant supply.

APL is the 3rd largest oil marketing company of Pakistan after Pakistan state oil (PSO) and Shell
and was established in 1998. The main aim of the company is to continuously provide quality
and environment friendly petroleum products and related services to industrial, commercial and
retail consumers, and exceeding their expectations through reliability, economy and quality of
products and services. APL is committed to benefiting the community and ensuring the creation
of a safe, responsible and innovative environment geared to client satisfaction, end user
gratification, employees‘ motivation and shareholders‘ value.
APL is procuring its product from Attock
Refinery Limited, National Refinery Limited, PARCO
refinery and imported product through Jetty. Currently
the company is operating from the following supply
points.
• Rawalpindi
• Machike. sheikhupura
• Karachi
• Gatti, Faisalabad
• TarruJabba, Peshawar
• Vehari, Sindh
• Mehmood kot, Muzzafargarh
• Shikarpur, Sindh
• Habibabad, Lahore

Company’s Process
Supply chain is believed to be back bone of any oil marketing company like APL where it plays
a vital role in successful operation. It consists of the processing, transportation, marketing, and
distribution of petroleum products, and it is usually characterized as a mature, rather competitive,
and complex industry (Hackworth & Shore, 2004). In APL, traditional approach towards supply
chain is denting the company's growth to a great deal.
Process Title
Attock Petroleum Limited:

Attock Refinery Limited (ARL) was incorporated as a Private Limited Company in November,

1978 to take over the business of the Attock Oil Company Limited (AOC) relating to refining of

crude oil and supplying of refined petroleum products. It was subsequently converted into a

Public Limited Company in June, 1979 and its shares are quoted on the Pakistan Stock Exchange

Limited in Pakistan. The Company is also registered with Central Depository Company of

Pakistan Limited (CDC).

Original paid-up capital of the Company was Rs 80 million which was subscribed by the holding

company i.e. AOC, Government of Pakistan, investment companies and general public. The

present paid-up capital of the Company is Rs. 1,066.163 million

ARL is the pioneer of crude oil refining in the country with its operations dating back to 1922.

Backed by a rich experience of more than 90 years of successful operations, ARL‘s plants have

been gradually upgraded / replaced with state-of-the-art hardware to remain competitive and

meet new challenges and requirements.

It all began in February 1922, when two small stills of 2,500 barrel per day (bpd) came on stream

at Morgah following the first discovery of oil at Khaur where drilling started on January 22,

1915 and at very shallow depth of 223 feet 5,000 barrels of oil flowed. After discovery of oil in

Dhulian in 1937, the Refinery was expanded in late thirties and early forties. A 5,500 bpd

Lummus Two-Stage-Distillation Unit, a Dubbs Thermal Cracker Lubricating Oil Refinery, Wax

Purification facility and the Edeleanu Solvent Extraction unit for smoke-point correction of

Kerosene were added.

There were subsequent discoveries of oil at Meyal and Toot (1968). Reservoir studies during the

period 1970-78 further indicated high potential for crude oil production of around 20,000 bpd. In

1981, the capacity of Refinery was increased by the addition of two distillation units of 20,000

and 5,000 bpd capacity. Due to their vintage, the old units for lube/ wax production, as well as

Edeleanu, were closed down in 1986. Another expansion and up gradation project was

completed in 1999 with the installation of a Heavy Crude Unit of 10,000 bpd and a Catalytic

Reformer of 5,000 bpd. In 2000, a Captive Power Plant with installed capacity of 7.5 Megawatt

was commissioned.
The latest Expansion / Up-gradation Project completed in November 2016 comprised the

following:

Diesel Hydro Desulphurization (DHDS) unit: This has reduced Sulphur contents in the High

Speed Diesel to meet Euro II specification;

Preflash unit: This has increased refining capacity by 10,400 bpd;

Light Naphtha Isomerization unit: This has enhanced production of Premium Motor Gasoline by

about 20,000 M. Tons per month;

Expansion of existing Captive power plant by 18 MW.

ARL‘s current nameplate capacity stands at 53,400 bpd and it possesses the capability to process

lightest to heaviest (10-65 API) crudes. The Company is ISO 9001, ISO 14001, ISO/IEC 17025,

OHSAS 18001 certified and is the first refinery in Pakistan to implement ISO 50001 (Energy

Management System).

CHIEF EXECUTIVE OFFICER SECRETARIAT

Mr. M. Adil Khattak

Chief Executive Officer

Mr. M. Ilyas Ms. Amna

Aman

Executive (CEO Secretariat) Executive

(Coordination)
FINANCE AND CORPORATE AFFAIRS

Syed Asad Abbas

Assistant General Manager (Finance & Corporate Affairs)

Finance Department is responsible for overall financial planning, funds management,

management of information systems and optimal utilization and safeguarding of corporate

resources. The role of the department includes re-engineering of business processes and internal

controls by best utilization of state of the art information technologies. It also renders support

services to other functional areas for enhancing organizational efficiency and effectiveness for

long-term value creation.

Sections

Finance Secretariat Corporate Affairs

Financial Reporting Treasury and Accounts Payable

Payroll Budgeting & Planning

Oil Accounting Fixed Assets & Insurance

BUSINESS REVIEW & ASSURANCE

Mr. Usman Ishaq

Manager (BR&AD)

Business Review & Assurance Department (BR&AD) has been formed as a result of business
process reengineering of Internal Audit function. The vision of BR & AD is to be the Catalyst

for improvement in the organisation. BR&AD is a service tool, to be used as the most effective

control process in ARL with respect to the systems, controls, operations, management,

efficiency and accountability. BR&AD acts not only as a watchdog but also as a Consultant

helping the management in achieving the strategic goals and objectives of the company. The

BR&AD function cover a vast range of activities from simply carrying out transaction

verification to operations/efficiency reviews and consultancy services in areas which need

special expertise.

COMMERCIAL & MATERIAL MANAGEMENT

Mr. Asif Saeed

Assistant General Manager (Commercial & Materials Management)

Commercial and Materials Management department consist of following major sections of ARL:

Sales & Commercial Section is responsible for sale of petroleum products, execution of commercial agreeme

coordination with customers including pricing of petroleum products etc.

Procurement is responsible for Procurement of goods which includes imports and local purchases. Procurem

responsible for disposal of fixed assets including sludge disposal as well etc.

Materials Management is responsible for maintaining stock items as per predefined control levels and also re

correctly specifying the stocked goods.

 IT is responsible for providing software and hardware support.

HUMAN RESOURCES & ADMINISTRATION)

Brig. (R) Javed Iqbal Malik

Assistant General Manager (Human Resources & Administration)

The Human Resources and Administration (HR&A) department is responsible for optimization

and rationalization of human and other resources. The core of HR is to ensure efficient and

effective recruitment, selection and retention of high quality professionals, providing

opportunities to build their careers, evolving and implementing training and development plans

for developing technical and behavioral skills of employees, facilitating performance appraisal

process for employees to foster performance culture at ARL and undertaking cordial industrial

relations.

The Administration wing of HR&A department is mainly overseeing the affairs related to Office

Services and Transport, Dining facilities to the employees, provision of security and protection

of company land, Product Loss Investigation, legal compliance, Public Relations, CSR and

Horticulture activities etc.

Sections

Recruitment and Selection Security & Product Loss Investigation

Training and Development Horticulture

Staff Affairs Public Relations and CSR

 Time Office Land Section

Office Services and Transport Legal Affairs

MAINTENANCE

Mr. Salman Tariq

Assistant General Manager (Maintenance)

Maintenance Department plays a very significant and critical role in the refinery. It aims to

achieve excellence in performance by:

Providing Zero Defective repair and maintenance services of highest standards to company's

internal and external customers.

Enhancing skill level of technical staff and training them so that they can perform maintenance

in efficient manner.

Improving productivity by actively advancing towards the state of the art technology, system

and services that meet the emerging expectations of on-growing competitive environment and

achieve safe environment for zero loss time injuries.

Sections

Plants maintenance

Power Plant

Electrical & Instrumentation

 Offsite Maintenance

Planning & CMMS

Workshop, Transport, Heating Ventilation and Air Conditioning

Civil Structure and Building

OPERATIONS

Mr. Ejaz H. Randhawa

Deputy General Manager (Operations)

Operations department operates refining units and allied facilities. There are four distillation

units viz. HBU-I, HBU-II, HCU and Lummus. Downstream units include

Reformer/Isomerization units and Diesel Hydro De-Sulfurization unit for preparation of

premium quality gasoline and low sulfur diesel, respectively. Auxiliary units like Hydrogen unit,

Amine unit, Sour Water Stripper and an Effluent Treatment Plant are also in operation for

producing prime quality products in an environment friendly manner. The products include

LPG, premium motor gasoline, jet fuels, kerosene, high speed diesel, light diesel oil, furnace

fuel oil, Mineral Turpentine oil, Jute batching oil, solvent oil and various grades of bitumen.

Current nameplate refining capacity is 53,400 barrels per day. Following are different sections in

Operations department:

Sections

HBU's Reformer
 HCU ISOM unit

Lummus and Merox Diesel Hydro De-Sulfurization

Oil Movement-I Hydrogen unit

Effluent Treatment Plant Amine unit

Asphalt/PMB Blending Plant Sour Water Stripper

Oil Movement -II Sulfur Recovery unit

Utility Operations Oil Accounting

TECHNICAL SERVICES , PLANNING &

DEVELOPMENT

Mr. Munir A.Temuri

Assistant General Manager (Technical Services, Planning & Development)

Technical Services Department (TSD) plays a vital role in providing all kind of technical

support for trouble free operations of the Refinery. It has a multifunctional nature of work

ranging from Production Planning, Energy Auditing, Optimization and process design, Refinery

economics and pre-feasibilities, Plant Monitoring, Product quality control and Research &

Development. TSD work includes technical support to on-going and planned projects: it must

vet and approve all process modifications keeping in view need, technical viability and

economic justification for each proposed change.

ENGINEERING

Mr. Saeed Uddin Faruqi

Manager (Engineering)

The Engineering Department provides a wide array of services to all departments especially the

Operations and Maintenance departments. Its functions of Design, Inspection and Contracts each

separately headed by a Section Incharge ensure that all works carried out in the refinery meet all

international standards of quality and reliability. The routine in-service and shutdown

inspections ensure continuous and safe operation of the plant and equipment. The Design section

is fully equipped to carry out complete in-house designs of piping modifications and works

related to storage facilities. All major repairs and constructions are carried out through contracts

awarded by the Contracts section which follows an ISO certified procedure for evaluation and

monitoring of contractors.

Sections

Project Engineering

Contracts

Inspection

HEALTH, SAFETY, ENVIRONMENT &

QUALITY (HSEQ)

Mr. Anwer Saeed

Manager (HSEQ)

ARL is committed to provide the best quality products in the market, endeavors to protect the

environment and to ensure health and safety of its employees, contractors, and customers and

work for continual improvements in Health, Safety, Environment and Quality (HSEQ) systems.

ARL is committed to comply with all applicable Health, Safety, Environment and Quality laws

and regulations.

Corporate Opportunities

Corporate Opportunities Directors and employees are expected not to: a) take personal use of

opportunities that are discovered through the use of Company property, information or position.

b) use Company property, information or position for personal gains. Directors and employees

are expected to put aside their personal interests in favor of the Company interests. Competition

and Fair Dealing The Company seeks to outperform its competition fairly and honestly. Stealing

proprietary information, possessing trade secret information that was obtained without the

owner‘s consent or inducing such disclosures by past or present employees of other companies

is prohibited. Each director and employee is expected to deal fairly with Company‘s customers,

suppliers, competitors and other employees. No one is to take unfair advantage of anyone

through manipulation, abuse of privileged information or any other unfair practice. The

Company is committed to selling its products and services honestly and will not pursue any

activity that requires to act unlawfully or in violation of this Code. Bribes, kickbacks and other

improper payments shall not be made on behalf of the Company in connection with any of its

businesses. However, tip, gratuity or hospitality may be offered if such act is customary and is

not illegal under applicable law. Any commission payment should be justified by a clear and
traceable service rendered to the Company. The remuneration of agents, distributors and

commissioners cannot exceed normal business rates and practices. All such expenses should be

reported and recorded in the Company‘s books of accounts.

EEQ

Equal Employment Opportunity The Company believes in providing equal opportunity to

everyone around. The Company laws in this regard have to be complied with and no

discrimination upon race, religion, age, national origin, gender or disability is acceptable. No

harassment or discrimination of any kind will be tolerated; directors and employees need to

adhere standards with regard to child labor and forced labor. Work Environment All employees

are to be treated with respect. The Company is highly committed to providing its employees and

directors with a safe, healthy and open work environment, free from harassment, intimidation or

personal behavior not conducive to a productive work climate. In response the Company expects

consummate employee allegiance to the Company and due diligence in his job. The Company

also encourages constructive reasonable criticism by the employees of the management and its

policies. Such an atmosphere can only be encouraged in an environment free from any prospects

of retaliation due to the expression of honest opinion.

Shell
Shell has been working on electric vehicle charging and have opened its charging points in

United Kingdom (UK). This strategy aims to push towards zero-emission vehicles.

The number of electric vehicles charging points is three and are placed in London, Surrey and

Derby. More electric vehicle charging points are expected by the end of the year. Shell made an

agreement with New Motion to buy electric vehicle charging.

Jane Lindsay-Green, future fuels manager of Shell said that, ―The electric vehicle market is

rapidly growing in the UK.‖ It was further informed that there is a raise in sales of electric cars.

Shell is determined to remove diesel powered and gasoline automobiles by 2050 in UK

especially London. London transport authorities and shell have joined hands to make this

initiative successful. Furthermore, Shell added that UK is the first country in which its

recharging service will be accessible.

Shell has also added other services like coffee and pizza at the charging point. David Elmes of

Warwick Business School has stated that, ―The next step is whether Shell starts to see

themselves as an energy services company, optimizing the multiple sources and uses of energy in

homes, offices, factories, communities, etc.‖

Climate change and environmental degradation is a reality and for the future generation it is

essential that more environmentally friendly policies are supported and initiated. It is indeed a

great step by Shell for sustainable development.

Shell Revolutionizing Oil Transport

The arrival of the internal combustion engine in 1886 led to a surge in demand for transport fuel.
Building on their shipping expertise, the Samuel brothers commissioned a fleet of steamers to
carry oil in bulk. They revolutionized oil transport with the maiden voyage of their first tanker,
Murex. In 1892, Murex was the first ever tanker to transit the Suez Canal. The brothers‘
company was named the Shell Transport and Trading Company in 1897. It used a mussel shell as
its logo.

Becoming Royal Dutch Shell

Shell Transport‘s activities in the East, combined with a search for new sources of oil to reduce
dependence on Russia, brought it into contact with Royal Dutch Petroleum. The two companies
joined forces in 1903 to protect themselves against the dominance of Standard Oil. They fully
merged into the Royal Dutch Shell Group in 1907.

Shell changed its logo to the scallop shell, or pecten, which is used today. By the end of the
1920s Shell was the world‘s leading oil company, producing 11% of the world‘s crude and
owning 10% of its tanker tonnage. The 1930s were difficult: the group‘s assets in Mexico were
seized and it was forced to concede generous terms to the Venezuelan government when it
nationalised its oil fields.

Post-War Expansion and The Oil Crisis

After the Second World War, as peace brought a boom in car use, Shell expanded into Africa
and South America. Shipping became larger and better powered. In 1947 Shell drilled the first
commercially viable offshore oil well in the Gulf of Mexico. By 1955 Shell had 300 wells. In
1958 Shell began production in Nigeria.

In 1969, Ghaddafi took power in Libya, cutting oil production and raising prices. Other
producers threatened to do the same and the Yom Kippur war of 1973 brought the crisis to a
head. Within weeks OPEC countries quadrupled the oil price and imposed a boycott for two
months. The effect on the West was economically catastrophic.

Tapping New Resources and Expansion

The 1970s were notable for Shell‘s development of the oil fields in the North Sea and South

America - difficult and expensive to do, but crucial given the reduced supplies from the Middle

East. In 1978 Shell completed the Cognac drilling and production platform in the Gulf of

Mexico, the world‘s tallest platform at 1,100 feet.

From the mid-1990s public scrutiny of the oil industry intensified as environmental issues gained

prominence. Shell was criticized over plans to dispose of the Brent Spar platform and also ran

into difficulties in Nigeria. As the new millennium got under way, Shell expanded in China and

Russia. In 2005 Shell dissolved its old corporate structure to create a single new company. Shell

remains one of the world‘s major oil and gas companies. We have interests in liquefied natural

gas and gas to liquids products; we help develop sustainable biofuels; and we are involved in

wind projects.

Caltex (Chevron Pakistan Limited)

Chevron Pakistan Limited (formerly known as Caltex Oil Pakistan Limited) is a part of Chevron

Corporation (earlier known as ChevronTexaco Corporation), a leader in the global integrated

energy business. Chevron is the fifth-largest integrated energy company in the world.

Headquartered in San Ramon, California, and conducting business in approximately 180

countries, this highly competitive corporation is engaged in every aspect of the oil and natural

gas industry, including exploration and production; refining, marketing and transportation;

chemicals manufacturing and sales; and power generation. With a diverse and highly skilled

global work force of more than 59,000 employees, Chevron and its people take great pride in a

commitment to community partnerships, social responsibility and environmental excellence.

Chevron Pakistan Limited has operated in the sub-continent since 1938 and apart from the main

oil storage facility at Karachi, has 10 Depots throughout the country, which includes three inland

terminals in Rawalpindi, Machike and Shikarpur. The company‘s Retail network consists of 598

outlets located throughout the country as well as a wide spread distributor network catering to

the demands of the Industrial, as well as the Agricultural sectors. Chevron installed its first CNG
facility at its Company managed retail outlet at Islamabad. Subsequently, more CNG facilities

have been added to the network in Karachi and Lahore increasing the number of CNG refueling

facilities to 66 nationwide. In addition, Chevron has also established three CNG conversion kit

centers. Pakistan's lubricants market size as per the line of business consists of consumer,

transport and industry. Transport sector is the largest lubricant consumer in Pakistan, generating

business for all lubricating oil manufacturing companies. Overall volumes of local consumption

including meager export to Afghanistan stand at around 400 million litres per annum.Total

demand of Pakistan is approximately 400 million litres (400,000 mt) per annum out of which

about 50 percent is produced locally by registered reclamation and blending plants with locally

available Lube Base Oils (LBOs) from National Refinery Limited (NRL). 11 percent of the

LBOs are imported in raw form which is further converted into finished products while 11

percent finished lubricants are being imported to meet local demand. The shortfall is met through

Iranian smuggled lubricating oils, spurious and substandard oils made by illegal reclaimers in the

Country particularly in Karachi. The illegal inflow of lubricants not only damage the legal

reclaimers and blenders but also cause heavy losses to the transporters in term of reducing

engines' life.

Due to network of petrol pumps spread across the Country, oil marketing companies (OMCs)

have an edge over their competitors and other manufacturers for increased share in the market to

sale and distribute lubricating oils in addition to various petroleum products. However, there are

several other factors which are responsible for market share of different lubricating brands.

These factors include pricing, quality, marketing and customers' opinion through different

channels including word of mouth.

PSO caters all kinds of lubricants customers including automotive and industrial consumers
having latest lubricants manufacturing terminal in Karachi. PSO has introduced Lubricant

security features which is first of its type in Pakistan. Consumers can authenticate the product

genuinity via SMS through the security code available on lubricant's pack. Pakistan State Oil

(PSO) being the state owned Company have the largest petrol pumps' network in the Country is

the largest seller of diesel and petrol as well but as far as lubricants are concerned, PSO stands at

number two, with market share of about 14 percent. The industrial oils produced by PSO include

gas engine oils, marine oils, turbine oils, compressor oils and many more.

The largest shareholder in the lubricant market is Shell Pakistan, which has captured 21 percent

lubricants' market in the Country. Shell is the number one global lubricant supplier, delivering

market-leading lubricants to consumers in over 100 countries. Shell Pakistan has established

itself as a valued multinational company of Pakistan. Shell offers different kinds of lubricating

oils and the top and latest brands offered by Company includes Helix Car Engine Oils, Advance

Motorcycle Engine Oils, Rimula Truck & Heavy duty Engine Oils, Helix Ultra (Synthetic Motor

Oils) and Helix Ultra Pure Plus (made from natural gas). Shell also produces and sells industrial

lubricants to different sectors including Power, Aviation, Automotive, etc.

Mal Pakistan Limited (formerly Mobil Askari Lubricants Ltd) produces and supplies both

automotive and industrial lubricant oils with different brand names of Mobil Delvac, Mobil

Delvac MX, Mobil Delvac Super, for commercial motors, Mobil 1, Mobil Special and Mobil

Super 1000 for passenger motors while Mobil 1 Racing is for Motorcycles. Wide range of

lubricants for industrial sector is also offered by the Company. Mal Pakistan entered into

Pakistani market in 1997 and is responsible for approximately 11 percent share in the lubricants
market of Pakistan.

Castrol has representation in 74 countries worldwide with delivery network in 120 countries. In

Pakistan Castrol sells automotive, aviation and industrial lubricants with approximately 1 percent

market share in the Country.

High Tech Lubricants Limited serves the Pakistan's lubricant market with brand name of Zic

through more than 20 thousand retail outlets and representation in all provinces including AJK. It

manufactures different lubricating oil including Gasoline & Hybrid, Diesel oils, Motorbike and

Under Hood. The Zic's share in local market is approximately 5 percent however other imported

brands contribute up to 11 percent in the lubricants' market of Pakistan.

Local brands which contribute to 15 percent of lubricants' market of Pakistan include Ken S-4

Advance, Kenwin GX-Super, Kenex 500, Ken GL-1, Ken-7, Ken Gold, etc., by KenLubes,

numerous Black Tiger lubricating oils, various lubricants by Master and variety of Total-Parco

brands. The remaining six percent is met through smuggled oils from Iran and illegal reclaimers

in the Country.

For the growth of legal Lubricants business in Pakistan it is important to resolve the major

problems faced by this sector including inflow of smuggled Lube base oils and finished

lubricants, high rate of custom duty on imports of Lube Base Oils, eradication of commercial

operators in unregulated sector, illegal reclamation of Used Lubricating Oil and high cost of
doing business.

Policies, rules and regulations for this sector of economy should be simplified and reviewed in

accordance to the recommendations being forwarded by the Lubricants' manufacturers, so that

this sector may actively participate in the economic growth of the Country.

For imported products:

Import concerns for LNG products is aspect to reach 4.5bcfd for coming 5 years while

from Afghanistan particularly from Turkmenistan 1.3bcfd through TAPI. This import pattern

will put pressure over other segments especially over FO products.

Petroleum products
(Million Tons)
MOGAS HSD FO
2014-15 4.7 7.4 9.2
2015-16 6.0 7.5 9.0
2016-17 6.6 7.6 9.0
2017-18 7.2 7.8 9.0
2018-19 7.9 7.9 9.0
2019-20 8.7 8.1 9.0

Oil and Gas sector structure:

This industry structure is initiated by the exploration and production sections where the

reservoirs are processed by exploitation of hydrocarbons. Through this process the specific

crude-oil are produced, which is further lead by process of refining. The refining process occurs

continuously till have some functional operation form of this particular oil. Then marketing

companies purchases this product and further the process is carried through wholesalers and

retailer where actual oil market operates. This process id described as follows;
Shell Retail

SPL is the second-largest oil marketing company (OMC) and the largest private OMC in

Pakistan with a 25% share of the white-oils market. The Retail business comprises over 800

retail outlets.

Shell Refinery Limited

Pakistan Refinery Limited (PRL), located at Karachi, is the third largest refinery in the

country, with a refining capacity of 2.1 mm tons per annum. The refinery was set up in the

1960s, and Shell has a 26% equity interest in it. With the introduction of the deemed duty

element in the oil products pricing mechanism in 2001, the refineries profitability has improved

considerably. As 50% of its profits are mandated by the Government to be retained for

upgrading/modernization, PRL is now embarking on major up-gradation projects including

expansion and de-spherization

Shell Govt Receivables

One of SPL‘s biggest challenges to doing business in Pakistan is Government receivables owed

to it. These receivables are due on account of price differential claims, sales tax and Petroleum
Development Levy. Currently, they stand at an all-time high of Rs 13,800 million (94.5 million

GBP). Due to delays in the receipt of these receivables, Shell suffered approximately Rs 1,700

million in additional financing costs in 2011 to run day-to-day operations. Note: Given below are

headings in Wikipedia article on Royal Dutch Shell.

Lubricants

During the year, lubricants continued to be a strong pillar of your Company‘s overall business

performance, leveraging our market leadership position in driving strong volume growth across

all focus segments. In our journey towards connecting with our consumers; we launched a brand

campaign for our Helix motor oil ―Drive on Pakistan‖, bringing sustainable improvement in road

safety behaviors, tying in with our objective to be safety leaders in the industry. Another

campaign was launched on ―Rimula -What matters Inside‖; celebrating the hard-working

truckers and farmers of Pakistan. Both campaigns were very well received and appreciated by

not only the relevant target audience but also in the advertising community overall, increasing

our brand equity as well as delivering improved business results and increased market share. In

2018 we launched a new range of premium portfolio in our passenger motor car segment;

introducing high quality synthetic oils with our patent Pure Plus technology which offers

complete protection of a vehicle‘s engine, whilst reducing carbon footprint and contributing to

improving the environment in the country. Shell also hosted the industry‘s first Technology

Leadership Conference which was a first of its kind event where more than 200 customers from

various industries participated. The conference aimed to help enable our industrial customers

gain meaningful insights from our global experts about the new technology breakthroughs in the

Shell world across the lubricants portfolio and also enabled your Company to achieve improved

business opportunities and lead generation for our premium grade industrial lubricants.
Social Investment

To invest in the communities where we live and operate, through programmed that enable us to

share with communities the benefits that economic development brings. Shell Tameer program

continued with its mission of enabling young entrepreneurs to start their own businesses and

create employment in the country. Through the Shell Eco-Marathon competition, ten teams from

seven universities competed in the global competition, which gives engineering students a

platform to manufacture fuel efficient cars.

HSSE

Company continues to focus on ensuring safe operations across the supply chain and has had a

clean HSSE record in 2018. We remain focused on improving our incident reporting culture and

advancing the safety standards of fuel transport. The Road Transport Continuous Improvement

project ensures we safely deliver product to our customers and build road transport operations in

Pakistan strongly rooted in safety and safeguarded by robust assurances. Furthermore, in order to

manage safe supply through the Customer-Own-Collect model, fleets are being enhanced to

ensure road worthiness with an upgradation to international standards followed by Shell globally.

Additionally, with the White Oil Pipeline expected to become operational in Q3 2019, the

existing diesel pipeline will be converted to transport multi-grade products from Port Qasim to

Mehmoodkot, which will result in approximately 60% decrease in road exposure and will bring

strong monetary value and asset utilization to your Company.

Caltex Premium with Techron A highly refined, premium grade unleaded petrol designed for use

in all petrol-fuelled spark-ignition engines in mobile, portable and stationary applications. It has

an octane rating of 95 minimum, which makes it ideal for vehicles that require unleaded petrol
with octane ratings higher than the commonly available 91. It is also ideal for those cars, which

experience engine knocking or run-on problems when using ‗regular‘ unleaded petrol. Caltex

Premium with Techron contains an advanced, proprietary deposit control additive that cleans up

harmful intake and fuel system deposits, and can also keep these deposits forming in new

engines to ensure they operate at peak performance and efficiency. Volatility characteristics are

carefully adjusted seasonally to ensure easy cold starting and protection from vapour lock and

carburettor icing. Caltex Premium with Techron is coloured yellow and meets the New Zealand

Petroleum Products Specifications Regulations. Caltex Regular with Techron A highly refined

regular grade unleaded petrol designed for use in all petrol-fuelled spark-ignition engines in

mobile, portable and stationary applications. It contains the same additive system as Caltex

Premium with Techron to ensure total fuel system cleanliness so that engines operate at peak

performance and efficiency. Volatility characteristics are carefully adjusted seasonally to ensure

easy cold starting and protection from vapour lock and carburettor icing. Caltex Regular with

Techron has an octane rating of 91 minimum, is coloured Red and meets the New Zealand

Petroleum Products Specifications Regulations. NOTE: Motor petrol‘s are NOT suitable for

aircraft use. Automotive LPG A premium quality, clean burning, liquefied petroleum gas. It is an

unleaded high octane fuel suitable for all currently available automotive LPG engines or dual

fuel LPG/petrol engines. It meets the New Zealand Standard NZS 5435 (specification for LPG),

has a gross energy per unit mass of 50 MJ/kg and an octane rating of approximately 99. Regular

Kerosine Caltex Regular Kerosine is a product intended for use as a general purpose cleaning

solvent and as a fuel in most flued domestic heating appliances employing vaporising or

atomizing burners. Jet-A1 A kerosine-type aviation turbine fuel for civil, commercial and

military aircraft use. Manufacture and distribution are closely controlled to ensure that the
product meets or exceeds all requirements of the applicable specifications, including DEF STAN

91-91/3 and the AFQRJOS Joint Fuelling Check List. Caltex Diesel with Techron® D A

premium performance, deposit control diesel fuel designed for use in diesel engines in

automotive and industrial applications. The exclusive Techron® D additive controls deposits,

maintains fuel injector cleanliness and protects metal fuel system components against corrosion

and has been tested in both the latest and older technology engines and in a range of diesel

specifications including biofuel blends.

Product Line

BUSINESS LINE:
PSO serves all Pakistan‘s customer, they delivered product in three categories as;

1. Retail

2. Lubricant & chemicals

3. Commercial fuels in bulks

RETAIL:

This market segments includes dealers and customer, where all strategic focus is to

satisfy these two segments as priority. They counts for key specific products that is the part of

transactions such as Motor Gasoline (MOGAS), High speed diesel (HSD), Cards business and

Non-fuel retails.

LUBRICANTS AND CHEMICALS:

This market segments counts the dealers, Hi-Street customers and industrial Customers,

where the main key products for phase of transactions are lubricants, Light Diesel, Superior

kerosene Oil, Motor Gasoline, HSD, FO and chemicals.

COMMERICAL FUELS IN BULKS:

 This includes all the big giants such as; Industrial and Domestic Customers, Dealers, Air

Force and Army, Pakistan Navy, Railways, Bunkers, IPPS. This diverse market includes the

diverse range of key market products such as; Liquefied Petroleum Gas, HSD, FO, Jet-Fuel

(Local & Exported), Compressed Natural Gas, Liquefied Natural Gas.

DISTRIBUTION CHANNELS:

Oil and lubricant industry holds a major division section in any economy around the world and

this industry act as the power zone for stability of associate economy. In Pakistan main standard

provider is PSO. It serves in many streams for this industry and its distribution channels is

divided into here streams as;

 Up-stream

 Mid-stream

 Down-stream

UP-STREAM MID_STREAM DOWN-STREAM

Exploration Transportation Manufacturing

Field Processing Refining &

Development Petrochemicals

Production Storage & Wholesale &

Operations Distribution Marketing

CALTEX.PRODUCTS.LINE:

1)Havoline Energy 500210

SAE Grade: 5W-30
Performance Standards: API: SL/CF; ACEA: A1/B1; A5/B5; Ford: WSS-M2C913-C,

M2C913-D, Renault RN 0700

Description: Havoline Energy is a premium performance, friction modified multigrade motor

oil formulated from high performance additive technology and fully synthetic base oils, for use

in modern passenger car and light truck petrol engines to promote engine durability and

improved fuel economy.

Application: Recommended for naturally aspirated and turbocharged petrol engines where the

manufacturer requires a low viscosity multigrade oil or where superior fuel efficiency is desired.

Pack sizes: 208 litres, 4 litre and 1 litre.

2)Havoline Ultra V 501272 (To be renamed Havoline ProDS V in late 2017)

SAE Grade: 5W-30

Performance Standards: ACEA C3; VW Standard 504 00 and 507 00; BMW Longlife-04;

Mercedes Benz 229.51 and 229.31; Porsche Oil Category C 30

Description: Havoline® Ultra V is an enhanced performance, synthetic, multigrade motor oil

formulated from selected base fluids and high performance additive technology for use in

passenger car and light truck petrol and diesel engines under all operating conditions.

Application: For use in naturally aspirated and turbocharged petrol and diesel engines in

passenger cars and light trucks including those fitted with the latest catalytic converter (petrol) or

diesel particulate filter (DPF) technology. Particularly suited for use in the latest Volkswagen

and Audi petrol and diesel engines.

Pack sizes: 20 litres.

3)Havoline Ultra R 501276

SAE Grade: 5W-30

Performance Standards: ACEA C4; Renault RN 0720; Mercedes Benz 226.51

Description: Havoline Ultra R is a low SAPS, premium performance engine lubricant

formulated with synthetic base stocks and advanced technology additives and is designed to

perform under severe operating conditions as defined by the engine manufacturer.

Application: Recommended for use in high performance naturally aspirated and turbocharged

car and light van diesel and petrol engines equipped with modern three way catalysts (TWC) and

diesel particulate filters (DPF) requiring low SAPS oils. Approved to ACEA C4 which is

specifically required by Nissan in a range of their late model diesel engines fitted with DPF‘s.

Pack sizes: 5 litres.

Havoline ProDS Fully Synthetic ECO 5

SAE Grade: 0W-20 & 5W-30

Performance Standards: API: SN; API Resource Conserving; ILSAC GF-5; GM: dexos1TM

(licence GB1D1017089 for SAE 0W-20 & GB1C0930089 for SAE 5W-30).

Description: Havoline ProDS Fully Synthetic ECO 5 is a resource conserving, multigrade

petrol engine oil formulated with synthetic base oils for use in passenger car and light truck

engines requiring low viscosity, ILSAC GF-5, API SN or GM dexos1TM performance lubricants

under all operating conditions.

Application: Naturally aspirated and turbocharged petrol engines in passenger cars where
ILSAC GF-5, API SN, GM dexos1TM or earlier ILSAC or API ―S‖ performance categories are
specified.
Pack sizes: SAE 5W-30 available in 200 litre, 18 litre, 4 litre and 1 litre. SAE 0W-20 available
in 4 litre packs only
Havoline ProDS F (NEW PRODUCT) 500266
SAE Grade: 5W-20

Performance Standards: API: SN; ACEA: A1/B1; ILSAC GF-5; Ford WSS-M2C 948-A, Ford

WSS-M2C 945-A, Ford WSS-M2C- 948-B.

Recommended for: Ford WSS-M2C 913-C, WSS-M2C 913-A, WSS-M2C 925-B petrol

engines; Jaguar Land Rover applications requiring ST-JLR 03.5004

Description:

Havoline ProDS F is a premium performance, passenger car engine oil formulated with premium

quality synthetic based oils in combination with an advanced additive system.

Application: Specifically developed for use in direct injected, turbocharged, 1.0 L 3-cylinder

Ford Ecoboost engines requiring Ford WSS-M2C 948-A but also suitable for engines requiring

the other Ford specifications listed above.

Pack sizes: 208 litre, 20 litre, 4 litre and 1 litre.

Havoline ProDS Fully Synthetic LE 500002

SAE Grade: 5W-40

Performance Standards: API: SN; ACEA: C3; MB Approval: 229.51; Meets RN 0710/0700

performance; Porsche: A40 approval; BMW Longlife-04 approval; GM dexos2TM (license

GB2D0320089).
Description: Havoline ProDS Fully Synthetic LE is a premium performance, multigrade motor

oil formulated from selected synthetic base fluids and matching additive technology. It is

optimised to provide outstanding protection and value for cleaner, smoother-running engines.

Application: Specifically developed for use in low emission passenger car and light duty

vehicle engines fitted with the latest catalytic converter (petrol) or diesel particulate filter

technology and specifically where ACEA C3 oils are recommended.

Service Considerations: In December 2012, ACEA amended its some of its definitions such

that ACEA C3 has become mutually exclusive with ACEA A3/B3 and A3/B4. The changes were

made to emphasise the fact that today, the ACEA A3/B3 and A3/B4 Sequences are primarily

intended for applications where lower quality, higher sulphur content fuels are in use. Thus

ACEA A3/B3 and A3/B4 claims are no longer made for Havoline ProDS Fully Synthetic LE

SAE 5W-40, which is primarily an ACEA C3 oil. However, it remains suitable for use in those

applications calling for ACEA A3/B3 or A3/B4 oils where it has previously been used, and

where low sulphur fuels are being burned.

Pack sizes: 200 litre, 18 litre, 4 litre and 1 litre.

Four Stroke Lawnmower and Stationary Engine Oil 501601

SAE Grade: 30

Performance Standards: API: SJ/CF.

Description: A high performance monograde SAE 30 engine oil intended primarily for the

lubrication of petrol engines requiring an API SF performance lubricant and suitable for small

diesel engines where an API CF performance is specified.

Application: Recommended for four stroke petrol lawn mower engines and for other small four

stroke petrol and diesel stationary engines, such as generator sets and portable power equipment.

Pack Sizes: 1 litre.

TWO STROKE ENGINE OILS Super Outboard 3 (Green) 560319

SAE Grade: 20 (Pre-diluted).

Performance Standards: National Marine Manufacturers Association (NMMA): TC-W3

Certified

Description: A premium performance, two-stroke, marine outboard motor oil formulated with

a special ashless additive system that ensures that ash-induced deposits are not formed in the

combustion chamber thereby eliminating the risk of destructive pre-ignition from this source.

Pre-diluted with a high flash point solvent to facilitate mixing with petrol at all temperatures.

Dyed green.

Application: Recommended for all water-cooled, two stroke, marine outboard engines

including the latest designs under warranty, including Johnson, Mercury, Evinrude, Yamaha etc.

Suitable for both oil-injected and oil-petrol premix engines at petrol-to-oil ratios up to and

including 100:1.

Pack sizes: 4 litre, 1 litre.

Havoline Super 2T 500676

SAE Grade: 20 (Pre-diluted)

Performance Standards: JASO: FC (identification No. 061CTC684/5); ISO: EGC; API: TC

Description: A premium performance, ―low smoke‖, semi-synthetic, two-stroke motorcycle oil

formulated with a special low ash additive system and base fluids that provide superior lubricity

to reduce wear.

Application: Air and liquid cooled two-stroke motorcycle engines and particularly Japanese

high performance motorcycle engines. Also suitable for Japanese two stroke engines fitted to

stationary and portable power equipment, lawn mowers etc. Suitable for use in chainsaws - has

been successfully field tested in Stihl chainsaws in severe duty forestry applications and is

recommended for use in all Stihl chainsaws. Suitable for oil-injected engines and oil-petrol

premix engines at petrol-to-oil ratios up to 50:1. It is NOT recommended for use in marine

outboard engines, or any LPG fuelled engines.

Pack sizes: 20 litre, 4 litre, 1 litre.

Two Stroke Lawnmower Oil 501600

SAE Grade: 20 (Pre-diluted). Performance Standards: JASO: FB ; ISO : EGB.

Description: A two stroke all-mineral motor oil designed for two stroke lawn mower petrol

engines. Pre-diluted with a high flash point solvent to facilitate easy mixing with petrol.

Application: Recommended for two stroke petrol engine lawn mowers and other small air

cooled two stroke engines both oil-injected and oil-petrol pre-mix engine up to 50:1 ratios.

Pack sizes: 200ml.

TRACTOR OILS Super Tractor 500421

SAE Grade: 15W-40
Performance Standards: API: CF, CF-4/SF, API: GL-4; ZF TE-ML 06B, 07B. Suitable for

use where the following are specified: Ford: ESN-M2C159-B2; Ford New Holland: FNH

820092102, 890092103); Massey Ferguson: CMS M1144; New Holland NH 024C

Description: A shear stable, multi-viscosity super tractor oil universal (STOU) fluid, designed

for use in tractor engine crankcases, transmissions (including wet brakes), final drives and

hydraulic systems.

Application: A multi-functional oil suitable for: • Where the tractor manufacturer specifies the

use of an STOU type product. • Mixed fleets of agricultural tractors and associated equipment. •

Mobile or stationary diesel engines. • Older style petrol engines. • Automotive manual

transmissions and gearboxes. • Mobile hydraulic systems. • Enclosed oil immersed (wet) brakes.

• Power take off (PTO) clutches. Pack sizes: 200 litre, 18 litre

Delo 400 XLE Synblend 500289

SAE Grade: 10W-30

Performance Standards: API: CK-4, CJ-4, CI-4 PLUS, CI-4/SN; ACEA: E6, E9; Volvo:

VDS-4.5; Renault RLD4; Mack: EOS 4.5; DEUTZ DQC III-10 LA; Cummins: CES 20086;

Detroits Fluid Specification (DFS) 93K222; Caterpillar ECF-3; MB: 228.51, 228.31; MTU

Category 2.1; MAN: M 3575; ZF TE-ML 03K

Description: Delo 400 XLE SAE 10W-30 with ISOSYN Advanced Technology is formulated

using advanced additive technology to provide outstanding protection and improved fuel

efficiency for on highway applications including 2010 compliant engines.

Application: Excellent performance in new advanced engines developed to meet the latest

emissions and reliability standards and in engines equipped with features like fourvalve heads,
super-charging, turbo-charging, direct injection, higher power density, intercooling, full

electronic management of fuel and emissions systems, exhaust selective catalytic reduction,

exhaust gas recirculation, and exhaust particulate filters.

Pack sizes: 208 litre, 18.9 litre.

SAE Grade: 15W-40

Performance Standards: API: CI-4 PLUS, CI-4, CH-4/SL; ACEA: E7-08; JASO: DH-1;

EMA Global DHD-1; Caterpillar ECF-2, ECF-1-a; Cummins: CES 20078, 20077, 20076; DDC

93K214; Mack: EO.

 BRAND ADOPTION FUNNEL:

Pakistan market consists of numbers of the lubricant brands and each brand has its own

strategies and corporate focus while taking into consideration the major players in this most

competitive red ocean strategy are PSO, Shell, Total, Caltex, Attock, and Zic. Adoptive funnel is

used to calculate that how many of your customers are aware with your brand, awareness will

lead to expectations that they will consider our product. Numbers of customers how considered

your brand will comes under the phase of testing and after testing if satisfied will be the actual

converse numbers of customers who are converted from phase of absolute interactions.

While considered all the components you will see that Caltex is leading in this segment

irrespective of being less in power than the PSO, while Shell is the one who has the largest

conversion numbers of customers and it currently captured the rest.

Market Share
Market Share of Shell

SPL is the largest lubricant marketing company in Pakistan with over 20% share of the total

lubricant market in the country. SPL‘s lubricant business is the second most profitable within

Shell‘s Global Lubricant portfolio. The business is focused on sales of key Shell brands (Rimula,

Helix & Advance) to high street traders and the transportation sector as well as heavy-duty

brands to industrial customers and power sector customers.

 MARKET SHARE:

While considering all the major competitors of the market in oil lubricant and petroleum sectors

the major partners at top counts for PSO, Shell, APL & HASCOL. The following series of the

graphs shows that during the years 2015 & 2016, PSO has major share that counts for 55.5% and

55.8% respectively, and other half are filled by the other major players. For next of two years

2018 and 2019 the market share is maintain at the almost same extent with very minor changes

because of the political instability and changes that occurs in different distribution channels

respectively. For next five years according to the vision 2025 Pakistan it will be increase to a

twenty percentage for existing and five to seven percent for other minorities.
For specified three componential form of crude oil, there share is given in this next table, where

increase for its distribution segment is given in volumetric sale distributions.

For further year count the increase in the sales will help it again allocate their respective

share. These three major portions indicate the tax rates and along with associate margins. The

sale price for FO is highest in 2017 ―4,169 tons‖ and is the lowest at end of 2019 ―1,216 tons‖,

while in case of HSD the sale price in 2018 was ―3,929 tons‖ and at end of 2019 it decrease to

―3,129 tons‖ which indicate small amount of decline while the rest as constant. In case of

MOGAS the sale counts for ―3,129 tons‖ in 2018 and for 2019 it counts for ―3,040 tons‖, which
indicates the associate increase in the sale, so the expected rise will all focus on this line of

products.

For liquid mark share calculation for 2018 all are based on the strategic focus of OGRA along

with the PSO and by OCAC, which describe the changes as it is presented for year 2015 to 2016;

CAMPARATIVE PEOFILE MATRIX:

This matrix is used as bases of calculations for the each weight and ranks associate with

each critical success factor of various segments under study. On bases on CSF comparative

profile matrix is build which leads to successful strategic formulations. The concept of value

creating strategies is linked with this matrix, where it forms the bases for evaluations of firm

against their key rivals, zimmerer, scarboronger and wilson, 2018).

The criteria for formulation of offensive or defensive strategies is also dependent on this

concept, it consists of following three steps as;

  Attach weight to each individual‘s CSF, their sum will be 1.00, and rank them with

scalefrom (1-4), where 1 describes the major weakness and 4 describes the major

strength,which is associate with the recognized internal strength of organization,

 Then Multiple each weight with the CAF,

 Every weight column would be assign the equal importance just focus on the market

demand and desires associate with that particular segments.

For counting the CSF factors for the Petroleum and oil markets, the main players counts the factor

of interest are the share in that market, ―more share more will be distribution, dealer, interaction

more will be space to get the stability,‖ next is the product quality and customer services, ―both

strategies describes as a key factor in any interactive transactions it describe the success and

failure of rest of the market and this is the focus of defining competition,‖ oil product desire the

storage phase and in Pakistan market many channels are focus on the imported ones especially

LNG and many more that need proper storage for the product till time of delivery to distributors

and retailers and even to the position of customers where it has to be used,‖ in terms of describing

media as third world media or a in term if big-data association, every business need clear focus

over it in order to capture the customers especially these segments who just rely on media as

source of information,‖ and last the number of storage need and should be in coordination with

the number of outlets it actually possess, so we design the CPM for 4 major leading competing

brands in Pakistan for those factors which counts the most and picked the already used CSF in

that particular market.

Pestle Analysis of Industry

Pakistan is a developing country, which has population of about 180 million and majority of

population is living in rural areas. Most of rural population rear livestock and they live on

agriculture products. It has democratic system and government is elected by the people. It is

basically agricultural country and it grows most of the crops as it has fertile land and it also

houses the majority of minerals, which are found in KPK and Baluchistan.

Political Factor

The political system of Pakistan is not strong enough due to corruption as government does not

make effective legislation to nip the evil of corruption. The government is involved in serious

cases of money laundering and corruption, commission and other serious allegations. The law

and order situation in the country is not exemplary and there is consistent danger of terrorist

attacks. The public is not pleased with their policies as they think differently from the masses

and their priority list is not up to the expectations of the people. The government is imposing

taxes of all commodities even the eatable products, which has grown concerns among the people.

The economic situation is worse and government shows its interests in taking loans from
international monetary organizations and returns this loan with interest, which cause heavy

burden over the economy of the country and it affects badly the life of common people. The

executive of the government do not interested in investing their money in Pakistan and they are

inviting the foreign investors to come and invest their amount in different projects to give

strength to economy of Pakistan, which is very weak and selfish approach of present

government.

Economical Factor

Due to poor economic policy of the government, the net loss of the country is still increasing and

the government is taking interest in getting more loans. There are stories of corruption in the

government and private sector and the people on the top of the government do not pay taxes,

which has increased the diverse condition of the government economic policies. The prices of

the oil and gas are increasing and prices of the things are also increasing drastically and become

out of reach of the common people. Even a vegetable and fruit vender are challenging the writ of

the government. The terrorist activities have also shaken the economic situation and government

has to pay more attention over the restoration of the people. Government is not taking interest in

the problems of common people like load shedding, weak industrial policy and lack of education

or expensive education system.

The government has no control over the prices of milk and its products. The government can

control the supply of milk and should adopt such policy to pasteurize it and pack it in the packing

material and provide in the market at the fixed rate.

Social Factor

In the developing countries like Pakistan, Health and Education are two major issues, which need

deep and special attention of the government. The government should make the legislation for

the provision of quality education at the highly subsidized rate of fee and they should declare

education till the 10th class and compulsory for every child of the country. It is also the prime

responsibility of the government to provide health care facilities to each individual of the

country. They should declare health free of every citizen of Pakistan and provide costly medicine

for the treatment of deadly diseases, whose treatment is out of reach of the common people.

Unfortunately, the government is focusing on other issues, which are less important but they can

help them to become successful in the next elections. The network of roads is necessary for

quick traveling and also enhances the economic activities but it is not as important as health and

education or removing of power shortage.

Technological factor

Pakistan is the big user of mobile phone and IT technology and numerous mobile phone

companies are providing their latest mobile phones, tablets and IT products in the market. They

are developing their business by importing of new and fresh models of the smart phone. Pakistan

is giving attention on industries and new technology is being introduced for the manufacturing of

fabrics, garments, crockery and sports goods. The sport industry is mainly working in Sialkot

and it is importing its most of the products to the European, America, Middle East countries and

earns huge profit. Faisalabad is well known for manufacturing of textile and it is called

Manchester of Pakistan. The leather products are also made in Sialkot and it has the international

reputation.
Environmental Factor

There are serious issues of environment and they are becoming more dangerous especially in the

industrial areas. The industries are not complied with the environment laws and the

environmental policies of the government are not effective. The removal of solid waste is not

strictly adhered and government has shown less attention over such issues and they do not have

focus over powerful corporation system for the removal of dust and garbage from the center of

the cities and they cause smell and spread of various diseases.

Legal Factors

The legal position of the country is also weak as there is no focus on the legal position and

making new laws and regulations to keep the country on the right track. The growing concern

over the corruption and law and order situation is not good and no effective laws are made to

grip these evils with strong hand. It is the basic task of the parliament to make new laws and

regulations to remove the evils from the society b crimes. The law and order situations of the big

cities like Karachi is not exemplary as different nature of crime are the daily routine matter and

government does not pay attention over these issues, which has devastated the economy of the

city. The law and order situation in Punjab are also not good and it needs immediate attention to

curb the criminals from the rural areas of South Punjab but parliament does not show any interest

in making new laws or overcome the crimes. The law and order situations of the big cities like

Karachi is not exemplary as different nature of crime are the daily routine matter and

government does not pay attention over these issues, which has devastated the economy of the

city. The law and order situation in Punjab are also not good and it needs immediate attention to

curb the criminals from the rural areas of South Punjab.

Points Emerged from the Analysis

The main point that has emerged from the PESTLE analysis is that in response to pressure by

governments to reduce carbon emissions, Shell has evaded the responsibility and has been

devising strategies to survive. The company has engaged in agreements with governments, which

have allowed it to continue engaging in its highly carbon intensive operations. At the same time,

Shell has been attempting to develop a positive public image by trying to show that it has been

responsibly disposing wastes. This is a key point as it shows the response of Shell to the

increased pressure to reduce carbon emissions.

Another point that has emerged from the PESTLE analysis is that while Shell has been trying to

neutralize the effects of political and legal factors, technological and economic factors have been

favorable to the company. On the other hand, environmental and social factors have been

unfavorable. The combined effect of the factors is important since it has an impact on the overall

performance of the company.

The analysis of the internal environment of shell indicates that the successful performance of the

company has been highly supported by heavy investment in technological and human resource

factors.

SWOT Analysis
The most authentic formulation to recognize company own position is the SWOT analysis, while

talking about the oil lubricant and petroleum market industry the SWOT basis are same for all the

competitors although for major and minor it differ to an extent. But in general, all components

focus criteria are almost same. PSO has the advantage of Governmental support and even play very

important role in regula6ion of all the rules and regulations in association with OGRA and
federation systems. The purpose of writing the report is to high light the ingredients that describes

what should be the measure and focus for determining the strength, weakness, opportunities and

threats. Private sectors have totally different strategies because bases of their origin and

international relation effects them accordingly in term of leading with the tariffs and others legal

associations.

STRENGTH:

While considering the whole market for oil and lubricant industry the strength counts for the

initially the market presence, like PSO has a major presence with major share of 50% and its

strength is for having the association with the OGRA, Government along with the federation

system and every rules and regulation that circulates around the market is associate with the PSO

for rest of market. We have made CPM, where the market share weights for 0.30, next in market of

shell which counts for 20% of presence and next counts for all other groups where percentages

varies as according with their presence.

WEAKNESS:

The whole market weakness counts for the brand image that is associate with the perceptual

mapping as in mind of customers, where the game is totally different while counts for the PSO

where the image implications are not that good as compare to the other major competitors like

Caltex, HASCOL, and others. The CPM here counts for just providing the idea for the product

quality and services where PSO is much better but their innovation focus is little down then the

other market players.

Advertisement counts for the awareness that much leads towards approval with the other rest of

brands, PSO is the one where the implementation for advertisement payments are acceptable while

for others they have to focus a lot in terms of providing the message to the target audience.

While considering the focus of NVRO ―Northern Virginia Regional Office‖ the focus of

providing services at that place is the channel, where we hardly have branches for PSO and a very

small amount for Shell. This factor counts for the major strength and weakness for that region.

OPPORUNITIES:

Opportunities for this market counts for the growth segments directly, because the Pakistani

consumers are rapidly capture or attract by those brands where the availability describes its

presences, currently shell, TOTAL, and Caltex are focusing in this segments and rest of minors are

importing the German incorporative technologies. Next counts if for the presences of Synthetic

lubricants segments which will in future change total dynamics of the market both for major and

minors.

Next the focus on the retailers is the most important to maintain the position in market and by

focusing on the associate rates, margins especially the IFEM margin.

THREATS:

All above factors if are not considered properly then will leads towards the threats for stability and

even in earning profits. The main is the market share, if you have deep penetrations then it will

lead to acceptability of the products like this petroleum. The case of berlin where the market share

is very low instead, they associate it with the German technology will impose them to create is as

wrong perception and deliver the less acceptability by all the audience. The main threat is the less

focus on the retailers because more than half market is in their hands which directly coordinate

with your end customers. So, their margins should be entirely focus while interacting with market.
 OGRA Rules & Regulations

Oil and Gas Regulatory Authority (OGRA):

Vision to achieve energy self-sufficiency for Pakistan by becoming the most successful and
efficient discoverer and producer of oil and gas.

Mission to serve the people of Pakistan in an area critical to their economic development by
employing, training and developing the best people available and empowering them to deliver
extraordinary results while insisting that they conform to the highest standards of professional
and ethical conduct.

Oil and gas regulatory authority:

Consequent upon the establishment of OGRA, the Natural Gas Regulatory Authority (NGRA)
was subsumed by the OGRA. All properties and works done by the NGRA were transferred to
and protected under the OGRA Ordinance. OGRA was, therefore, in a position to start its
functions in respect to natural gas immediately upon its establishment.

Powers and Functions:

The powers and functions of the Authority are contained in Section 6 of the Ordinance. The
Authority has the exclusive power to grant licenses for regulated activities in the Natural Gas,
Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG)
and Oil sectors. These activities include construction of pipelines, development of transmission
and distribution network, sale and storage of Natural Gas, installation, production, storage,
transportation and marketing of CNG, LPG and LNG, laying the pipelines,
establishing/operating refineries, construction/operation of storages, lube oil blending plants and
marketing of petroleum products in the oil sector. Some of the specific major functions are:

 Determination of revenue requirement and prescribed prices of natural gas utilities and
notification of prescribed and consumers sale prices.
 Computes & notifies ex-refinery price of SKO including ex-depot prices of SKO & E-10 and
Inland Freight Equalization Margin (IFEM) for all products.

 Monitoring the pricing of petroleum products under the deregulated scenario.

 Enforcement of technical standards and specifications (best international practices) in all the
regulated activities.

 Resolution of public complaints and disputes against licenses and between licenses

GOVERNMENT OF PAKISTAN
MINISTRY OF LAW, JUSTICE, HUMAN RIGHTS AND PARLIAMENTARY AFFAIRS

(Law, Justice and Human Rights Division)

Islamabad, the 28th March, 2002

F.No.2(1)/2002-Pub.- The Following Ordinance promulgated by the President is hereby

published for general information: -

ORDINANCE NO. XVII OF 2002

ORDINANCE

WHEREAS it is expedient to foster competition, increase private investment and ownership in

the midstream and downstream petroleum industry, protect the public interest while respecting
individual rights and provide effective and efficient regulations and for matters connected
therewith or incidental thereto;

AND WHEREAS the President is satisfied that circumstances exist which render it necessary
to take immediate action;
NOW, THEREFORE, in pursuance of the Proclamation of Emergency of the fourteenth day of
October, 1999, and the Provisional Constitution Order No. 1 of 1999, read with the
Provisional Constitution (Amendment) Order No.9 of 1999, and in exercise of all powers
enabling him in that behalf, the President of the Islamic Republic of Pakistan is pleased to
make and promulgate the following Ordinance: -
POLICY GUIDELINES

Powers of the Federal Government to issue policy guidelines:

1. The Federal Government may, as and when it considers necessary, issue policy guidelines
to the Authority on matters of policy not inconsistent with the provisions of this Ordinance
or the rules and the Authority shall comply with the policy guidelines in the exercise of its
powers and functions and in making decisions.
2. Without prejudice to the generality of the foregoing, the Federal Government may issue
policy guidelines in relation to-
(a) planning for infrastructure development;
(b) pricing of petroleum including development surcharge as defined in section 8
and the petroleum development levy as defined in the Petroleum Products
(Petroleum Development Levy) Ordinance, 1961 (XXV of 1961)
(c) standards and specifications for refined oil products;
(d) supply of natural gas and refined oil products to service new areas and
provision of financial incentives in cases where the service is not
economically viable;
(e) establishment and maintenance of the strategic petroleum storage;
(f) open access, common carrier and common operator;
(g) marketing of refined oil products; and
(h) tariff applicable to petroleum.

LICENCES

1. Exclusive power to grant licenses.

 (1) The Authority shall have the exclusive power, to be exercised in the manner
prescribed in the rules, to grant, issue, renew, extend, modify, amend, suspend, review,
cancel and reissue, revoke or terminate, a license in respect of any regulated activity.
2. If a licensee is of the opinion that it is not financially viable for it to supply natural gas
to a particular area based on the tariff applicable to it, it shall give reasons to the
Authority therefor.
3. If the Authority agrees with the licensee that it is not financially viable for such licensee
to supply natural gas to a particular area based on the tariff applicable to it unless the
Federal Government makes special financial arrangements with the licensee, it shall
report the matter to the Federal Government and the licensee shall not be obligated to
supply natural gas to the said area unless suitable financial arrangements are made by
the Federal Government.
4. On receipt of instructions from the Authority, the licensee shall supply natural gas to the
said area within such time as the Authority may specify.
5. Grant of licenses. –
(1) No person shall –
(a) construct or operate any pipeline for natural gas;
(b) construct or operate any natural gas testing facility or natural gas storage
facility;
(c) construct or operate any natural gas installation; or
(d) undertake transmission, distribution or sale or natural gas,
unless a general or specific license to undertake such activity has been issued and is in full
force and effect and the person is the licensee.

1. No person shall -
2. construct or operate any pipeline for LPG;
3. construct or operate any LPG or LNG production or processing facility;
LNG, LPG or CNG testing facility or LPG, LNG or CNG storage
facility.
4. construct or operate any installation relating to LPG or LNG; or
5. undertake transporting, filling, marketing or distributing of LPG, LNG
or CNG,
6. unless a general or specific license to undertake such activity has been
issued and is in full force and effect and the person is the licensee.

7. An application for the transfer or assignment shall be submitted to the

Authority on the prescribed form and in accordance with the
regulations.
8. An application under sub-section (2) shall be accompanied by the
prescribed fee, if any.
9. A transfer or assignment of a license shall have no effect until the
Authority has consented to the transfer or assignment.
10. Pakistan oil contribution to GDP Pakistan bureau of statistics Imports
by Commodity/Groups
 As July 2019 Pakistan mineral‘s fuel and lubricants of 175805 million of Rupee in
billions will make 175.805 Billions of rupees as total from January 2019 to July 2019
1255.5729 Billion rupees.
Where as in 2014-15 the total oil imports was 1274.8358 Billion rupees according to
Pakistan bureau of statistics.
According to Quora, Pakistan is the 25th largest importer of crude oil in the world. In 2013
Pakistan imported 372,800 b/p day. Pakistan‘s largest oil import partners remains Kingdom of
Saudi Arabia, Iran, Kuwait, Qatar in that order.
Pakistan imports crude oil maximum from United Arab Emirates, followed by Saudi Arabia and
Qatar. Here are trade figures of these countries recorded in the year 2016.

1. United Arab Emirates: USD 1099 million

2. Saudi Arabia: USD 869 million
3. Qatar: USD 14 million
Pakistan: Revenue minus production cost of oil, percent of GDP
: For that indicator, The World Bank provides data for Pakistan from 1971 to 2017.
The average value for Pakistan during that period was 0.53 percent with a minimum of
0.02 percent in 1971 and a maximum of 1.11 percent in 1990. See the global
rankings for that indicator or use the country comparator to compare trends over time.

Fuel extraction industry of Pakistan

Pakistan's first oil field was discovered in the late 1952 in Baluchistan near a giant gas field at
suo Sui in Baluchistan. The Toot oilfield was discovered in the early 1960s Islamabad in the
Punjab. Production has steadily increased since then.

Pakistan's first gas field was the giant gas field at Sui in Baluchistan which was discovered in the
late 1952. Pakistan is also a major producer of Bituminous coal, Sub-bituminous coal and
Lignite. Coal mining started in the British colonial era and has continued to be used by Pakistani
industries after independence in 1947

Pakistan produced about 45 tons of Uranium in 2006.

Gross Domestic Product of Pakistan grew 5.5% in 2018 compared to last year. This rate is 3 -
tenths of one percent higher than the figure of 5.2% published in 2017.

The GDP figure in 2018 was $314,588 million, Pakistan is number 41 in the ranking of GDP of
the 196 countries that we publish. The absolute value of GDP in Pakistan
dropped $10,021 million with respect to 2017.

Date Annual GDP GDP Growth (%)

 Date Annual GDP GDP Growth (%)

2018 314,588M.$ 5.5%

2017 304,567M.$ 5.2%

2016 278,655M.$ 4.6%

2015 270,556M.$ 4.1%

2014 244,361M.$ 4.1%

2013 231,218M.$ 3.7%

2012 224,384M.$ 3.8%

2011 213,588M.$ 3.6%

2010 177,166M.$ 2.6%

2009 167,875M.$ 0.4%

2008 170,853M.$ 5.0%

2007 152,362M.$ 5.5%

According to media reports, if oil deposits are discovered as expected, Pakistan will be among
top 10 oil-producing countries. Pakistan currently meets only 15 per cent of its domestic
petroleum needs with crude oil production of around 22 million tons; the other 85 per cent is
met through imports.

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