135464

Our Cover Page is a striking visualisation of our
multifarious engagements.
The OPEN SKY represents the possibilities that Mari

Petroleum is willing to explore and expand into.
The MAP of Pakistan symbolises our ongoing nation-wide

operational activities including seismic data acquisition
and the hard core drilling of wells as well as related
social responsibility schemes as part of our CSR culture.
The Company’s 360 degree focus on diversification is

depicted by the presence of a COMPASS, highlighting the
diverse opportunities being explored.
The BLUE SEA-SPACE shows the Company’s desire of

exploring our offshore waters in search of oil and gas.
About the
Report
The GREEN LEAF indicates our environment friendly
approach and our commitment to minimising any
negative effects of our operations on the Mother Nature.
All in all, the Cover Page of our Annual Report 2019

depicts our culture and the manner in which we do
business now and will continue to do in the future.
Contents Management's Responsibility towards the Preparation and Presentation of the Financial Statements 110
Compliance of International Financial Reporting Standards (IFRS) 110
Cash Flows & Financing Arrangements 112
Contribution to National Exchequer 112
Significant Changes in Financial Position 113
Horizontal Analysis - Statement of Financial Position 114
Vertical Analysis - Statement of Financial Position 116
Company Information 04
Horizontal Analysis - Statement of Profit or Loss 118
Notice of Annual General Meeting 06 Company Profile 12 Vertical Analysis - Statement of Profit or Loss 120
Our History 14
Key Financials 16
Ten Years at a Glance 122
Free Cash Flow 123
Our Vision & Mission 18
Composition of Local vs Imported Material and Sensitivity Analysis 123
Our Commitments 20
Statement of Value Added 124
Quality Policy 20
Statement of Charity Account 124
Integrated Management System Policy 20
Economic Value Added 124
Significant Changes from Prior Year 20
Pattern of Shareholding 125
Code of Conduct 22
Corporate Culture and Our Core Values 23 Directors’ Report 130
Profile: Board of Directors 24 Events after the Statement of Financial Position Date 158
Organogram 29 Geographical Presence 159
Chairman's Review 30 Statement of Compliance with the Listed Companies

(Code of Corporate Governance) Regulations, 2017 161
Managing Director's Outlook 32 Independent Auditors' Review Report
Calendar of Major Events 40 on Statement of Compliance 164
Risks and Opportunities Report 42
Strategic Business Plan and Resource Allocation 48 Financial Statements 165
Organisational Overview - Forward Looking Statements 53 Independent Auditors' Report on Financial Statements 167
Segmental Review of Business Performance 58 Statement of Financial Position 172
Success Stories 60 Statement of Profit or Loss 174
Opening up of Bannu West and Block-28 62 Statement of Other Comprehensive Income 175
Mari's Contribution to Food Security of the Country 64 Statement of Cash Flows 176
Sustainability and CSR Initiatives 66 Statement of Changes in Equity 177
Health Safety and Environment 68 Notes to and Forming Part of the Financial Statements 178
Human Resource - Management and Development 73 Definitions and Glossary of Terms 226
Value Added to the Shareholders' Net Worth 77 Directors' Report (Urdu) 248
Supply Chain Management 77 Proxy Form (Urdu) 249
Contribution to National Economy 77 Form of Proxy 251
Corporate Social Responsibility 78

Information Technology 82
Major Social Events 84
Awards and Recognitions 86
Corporate Governance 88
MPCL's Operated Blocks and Development & Production (D&P) Leases 102
MPCL's Non-Operated Blocks and D&P Leases 103
Performance Indicators 104
Variation in Results of Interim Reports with the Final Accounts 106
Return on Equity (Dupont Analysis) 107
Summary of the Statement of Cash Flows 108
Direct Method Cash Flow 108
Related Parties 109
M a r i P e t r o l e u m C o m p a n y L i m i t e d 04 05 A n n u a l R e p o r t 2 0 1 9
Company Information
Head Office Legal Advisor
21, Mauve Area, 3rd Road, G-10/4 Ali Shah Associates
P.O. Box 1614, Islamabad – 44000 Advocates High Court
Tel: +92 51 111-410-410 1-Ali Plaza, 4th Floor
+92 51 8092200 1-E, Jinnah Avenue
Fax: +92 51 2352859 Blue Area, Islamabad
Email: [email protected] Tel: +92 51 2825632
Web: www.mpcl.com.pk
Bankers
Field Office Daharki Allied Bank Limited
Daharki, District Ghotki Al Baraka Bank (Pakistan) Limited
Tel: +92 723 111-410-410 Askari Bank Limited
+92 723 660403-30 Bank Alfalah Limited
Fax: +92 723 660402 Bank Islami Pakistan Limited
Habib Bank Limited
Karachi Office Meezan Bank Limited
D-87,Block 4, Kehkashan, Clifton National Bank of Pakistan
P.O. Box 3887, Karachi – 75600 JS Bank Limited
Tel: +92 21 111-410-410 Standard Chartered Bank
Fax:+92 21 35870273 United Bank Limited
Quetta Liaison Office Registration,

26, Survey-31, NTN and GST Numbers
Defence Officers Housing Scheme, Registration Number:
Airport Road, Quetta 00012471
Tel: +92 81 2821052,
National Tax Number:
2864085, 2839790
1414673-8
Fax: +92 81 2834465
GST Number:
Auditors 07-01-2710-039-73
Deloitte Yousuf Adil Symbol on PSX:
Chartered Accountants Mari
18-B/1, Chohan Mansion
G-8 Markaz, Islamabad – 44000
Tel: +92 51 8734400-3
Fax:+92 51 8350602
[email protected]
Email: aashah@d deloit
eloitte.co
t m
[email protected]
shal
ali@del
[email protected]
com
Web: www.deloitte.com
wwww.delooitte
itte.com
com
Shares Registrar
Reggistrar
Corplink
C
Corpl ink (Pvt)
(P
Pvt
vt) Limited
Wings
W ings Arcade,
Arca de, 1-K Commercial
ade
Model Town,
Tow
wn, Lahore
Tel:+92 42 35916714, 35916719
Email: [email protected]
[email protected]
MPCL Head Office Building, Islamabad

Notice of Annual General Meeting
Notice is hereby given that the 35th Annual General Meeting RESOLUTION FURTHER RESOLVED that the bonus shares to be 1. Book Closure
(AGM) of the Shareholders of Mari Petroleum Company issued against 5% Bonus Shares which are sub The Share Transfer Books of the Company will
Limited will be held on Tuesday, October 22, 2019 at 10:00 "RESOLVED THAT a sum of Rs. 121,275,000/- (One judice before the Sindh High Court be withheld by remain closed from October 16, 2019 to October
a.m. at the Registered Office of the Company situated at Hundred Twenty One Million Two Hundred Seventy the Company till the final decision of SHC in the 22, 2019 (both days inclusive). Transfers, in order,
21 -Mauve Area, 3rd Road, Sector G-10/4, Islamabad to Five Thousand Only) out of the Reserves of the matter. received at the Company's Shares Registrar,
transact the following business: Company available for appropriation as at June 30, M/s Corplink (Pvt) Limited, Wings Arcade, 1-K
2019, be capitalised and applied for the issue of FURTHER RESOLVED that the Company Secretary Commercial, Model Town, Lahore, at the close of
Ordinary Business 12,127,500 (Twelve Million One Hundred Twenty Seven be and is hereby authorised to give effect to this business on October 15, 2019 will be treated as in
1. To receive, consider and adopt the Audited Accounts of Thousand Five Hundred) ordinary shares of Rs.10/- resolution and to do or cause to do all acts, deeds time for the purpose of determining the entitlement
the Company for the year ended June 30, 2019 together each as fully paid bonus shares to the members of the and things that may be necessary or required for the for the payment of Final Dividend, issue of Bonus
with the Directors' and Auditors' reports thereon. Company whose names will appear on the Register issue, allotment and distribution of bonus shares.” Shares and to attend the AGM.
of Members as at the close of business on October
2. To approve, as recommended by the Board of Directors, 15, 2019 in proportion of one share for every ten Statement under section 134(3) of the Companies Act, 2. Attending AGM in person or through Proxy
the payment of final dividend @ Rs.2/- per share (20%) shares held (i.e. 10%), and that such shares shall rank 2017, pertaining to the Special Business referred to A member entitled to attend and vote at the AGM
for the financial year ended June 30, 2019. This is in pari passu in every respect with the existing ordinary above is annexed to this Notice. may appoint a person/representative as proxy
addition to interim dividend @ Rs.4/- per share (40%) shares of the Company. The proposed issue of this 10% to attend and vote on his behalf at the meeting.
already paid. Bonus Shares shall not be eligible to the final dividend The instrument of proxy must be received at the
declared for the year ended June 30, 2019. Registered Office of the Company not less than 48
3. To appoint Auditors for the year 2019-20 and fix their hours before the time of holding of the AGM.
remuneration. FURTHER RESOLVED that the fractional entitlement of
By order of the Board
the Members shall be consolidated into whole shares In case of a corporate entity, the Board of Directors’
4. Any other business with the permission of the Chair. and sold in the Stock Exchange. The sale proceeds resolution/power of attorney with specimen
thereof shall be donated as deemed appropriate by the signature of the nominee shall be produced (unless
Special Business Board. it has been provided earlier) at the time of the
5. To approve the issue of bonus shares in the ratio AGM. The individual members or representatives
of one share for every ten shares held (i.e. 10%) as FURTHER RESOLVED that the Share Transfer Books of corporate members of MPCL in CDC must bring
recommended by the Board of Directors in their of the Company be closed from October 16, 2019 to original CNICs or Passport and CDC Account and
meeting held on July 30, 2019 and if thought fit, pass October 22, 2019 (both days inclusive) for the purpose Islamabad: Assad Rabbani Participant ID Numbers to prove identity and
the following Resolution as Ordinary Resolution. of determining the entitlement for the bonus shares. September 30, 2019 Company Secretary verification at the time of meeting.
In this regard all shareholders who hold shares jointly are requested to dispatched to the shareholders in
provide the shareholding proportions of Principal shareholder and Joint- CDs. In accordance with section
holders in respect of shares held by them to our Shares Registrar in writing 235 (1) of the Companies Act,
as follows: 2017 the shareholders may
MARI PETROLEUM COMPANY LIMITED
request for a hard copy of the
FORM OF JOINT SHAREHOLDING PROPORTION annual audited accounts, which
Principal Shareholder Joint Shareholders shall be provided within seven
Folio/CDC Total
Name of Principal
Shareholder and
Shareholding
Proportion (No.
Names of Joint
Shareholders
Shareholding
Proportion
days of receipt of such request.
Account No. Holding CNIC No. of Shares) and CNIC No. (No. of Shares) Signatures
Further, in terms of SRO No
787(I)/2014 dated September 8,
2014, the shareholders can also
opt to obtain annual balance
The joint accounts information must reach our Shares Registrar within sheet and profit and loss account,
10 days of this Notice. In case of non-receipt of the information, it will be auditors' report and directors'
assumed that the shares are equally held by Principal shareholder and the report etc. along with the Notice
Joint Holder(s). of the AGM through email. For this
purpose, we hereby give you an
The corporate shareholders of the Company in CDC are advised to ensure opportunity to send us written
that their National Tax Numbers (NTNs) have been updated with their request alongwith valid email ID to
respective participants, whereas corporate physical shareholders must send provide you the same via email.
a copy of their NTN Certificates with their Folio Numbers mentioned thereon
to the Company or its Shares Registrar. For the convenience of the
shareholders, a Standard Request
As per FBR Circulars C.No. 1(29)WHT/2006 dated 30 June 2010 and C.No.1 Form for the provision of a hard
(43) DG (WHT)/2008-Vol.II-66417-R dated 12 May 2015, the valid exemption copy of the annual audited
certificate is mandatory to claim exemption from withholding tax u/s 150 of accounts has also been made
the Income Tax Ordinance, 2001 (tax on dividend amount) where the statutory available on the Company's
exemption under clause 47B of Part-IV of Second Schedule is available. The website http://mpcl.com.pk/.
shareholders who fall in the category mentioned in above clause and want to
3. Payment of Cash Dividend IBAN bank account details are updated. In case of unavailability of IBAN, the avail exemption U/S 150 of the Ordinance must provide valid Tax Exemption 7. Change of address and Zakat
through Electronic Mode: Company would be constrained to withhold dividend in accordance with the Certificate to our Shares Registrar before commencement of book closure, Declaration Status
The provisions of section 242 of Companies (Distribution of Dividends) Regulations, 2017. otherwise tax will be deducted on dividend as per applicable rates. Members are requested to
the Companies Act, 2017 require immediately notify the change, if
that the dividend payable in 4. Deduction of Income Tax from Dividend and Exemption from 5. Consent for Video Conference Facility any, in their mailing addresses and
cash shall only be paid through deduction Pursuant to Section 132 (2) of the Companies Act, 2017, Members may zakat declaration status to the
electronic mode directly into the The current prescribed rates for the deduction of withholding tax under avail video conference facility for this AGM provided the Company receives Company’s Shares Registrar.
bank accounts designated by the section 150 of the Income Tax Ordinance, 2001 from payment of dividend by consent from the members holding aggregate 10% or more shareholding at
entitled shareholders. Therefore, the companies are as under: least 7 days prior to the date of meeting. The requisite forms for availing the 8. Contact Details
to comply with the provisions facility are available in the proxy form attached with this Annual Report-2019. For any query/information,
of the law, all those physical For filers of income tax returns : 15% the shareholders may contact
shareholders who have not yet For non-filers of income tax returns : 30% 6. Transmission of Annual Audited Accounts and Notice of Annual General Corporate Affairs Department,
submitted their International Meeting Phone: 051-111-410-410, Email:
Bank Account Number (IBAN) The income tax is deducted from the payment of dividend according to the The Company will place the financial statements and reports on the [email protected] or to the
details to the Company are Active Tax-Payers List (ATL) provided on the website of Federal Board of Company's website: http://mpcl.com.pk/ at least twenty one (21) days prior Company’s Shares Registrar,
requested to provide the same Revenue (FBR). All those shareholders who are filers of income tax returns to the date of the AGM. M/s Corplink (Pvt) Limited,
on the Dividend Mandate Form are therefore advised to ensure that their names are entered into ATL to Wings Arcade, 1-K Commercial,
available on Company’s website enable the Company to withhold income tax from payment of cash dividend Further, in accordance with SRO 470(I)/2016 dated 31 May 2016, the Model Town, Lahore. Phone:
at http://mpcl.com.pk. The @ 15% instead of 30%. Securities and Exchange Commission of Pakistan (SECP) has allowed 04235916714, 04235916719.
shareholders of the Company in companies to circulate the annual audited accounts to their members Email: [email protected],
CDC are requested to provide Further, according to clarification received from FBR, withholding tax will be through CD/DVD/USB instead of transmitting the hard copies at their [email protected]
the same to their Participants in determined separately on 'Filer/Non-Filer' status of Principal shareholder registered addresses. Therefore, in accordance with the SECP permission and
CDC who maintain their accounts as well as Joint-Holder(s) based on their shareholding proportions in case of the shareholders' approval at the AGM dated September 27, 2016, the annual
in CDC and ensure that their joint accounts held by the shareholders. audited accounts of the Company for the year ended June 30, 2019 are being
Statement under Section 134(3)

of the Companies Act, 2017
This statement sets out the material facts concerning the Special
Business, given in Agenda Item No. 5 of the Notice to be transacted at the
35th Annual General Meeting of the Company.
Issue of Bonus Shares

The Directors are of the view that the Company's financial position and its
undistributed reserves justify the capitalisation of free reserves amounting
to Rs. 121,275,000/- (One Hundred Twenty One Million Two Hundred
Seventy Five Thousand Only) out of the Reserves of the Company available
for appropriation as at June 30, 2019. This amount will be capitalised and
applied for the issue of 12,127,500 (Twelve Million One Hundred Twenty
Seven Thousand Five Hundred) ordinary shares of Rs.10/- each as fully
paid bonus shares in the ratio of one bonus share for every ten ordinary
shares held (i.e. 10%).
The Directors, directly or indirectly, are not personally interested in this

issue except to the extent of their shareholding in the Company.
By order of the Board
Islamabad: Assad Rabbani

September 30, 2019 Company Secretary
Company Profile
Mari Petroleum is an integrated Country is based on MPCL supplied Principal Business Activities Major Customers/Markets
exploration and production company, gas. The Company also supplies Mari Petroleum is primarily an The gas produced by the Company is
currently managing and operating gas for power generation and exploration and production supplied to fertiliser manufacturers,
Pakistan’s largest gas reservoir at domestic consumers. company in the upstream power generation and gas distribution
Mari Gas Field, Daharki, Sindh. segment of the petroleum companies, while crude oil and
To its credit, Mari Petroleum has industry. Its principal business condensate are supplied to the refineries
With 18% market share, Mari the unique record of maintaining activities include oil and gas for further processing. The Company
Petroleum is the third largest uninterrupted gas supply to its exploration, drilling, field currently only caters to local customers
gas producer in the Country with customers from Mari Field for the development, production and but has plans to expand to international
cumulative daily production of last fifty two years without availing sale of hydrocarbons (including markets in the coming years.
around 100,000 barrels of oil even the permitted outages. natural gas, crude oil, condensate
equivalent. and LPG) as well as provision Ownership, Operating Structure and
Mari Petroleum is an ISO certified of E&P related services on relationship with Group Companies
The Company’s exploration and Company for Quality, Environment, commercial basis. Mari Petroleum is a Public Limited
production assets are spread Information Security, Occupational Company operating in the Private Sector.
across all the four provinces of Health & Safety and has achieved Major Brands, Products The Management of the Company is
Pakistan. The Company enjoys the Advanced Level in ISO Certification and Services vested in Fauji Foundation. The Company
highest exploration success rate for Social Responsibility. MPCL is a major producer of is listed on Pakistan Stock Exchange
of 70%, much higher than industry natural gas. It also produces with market capitalisation of around Market Share
average of 33% (national) and 14% Mari Petroleum is a blue-chip crude oil, condensate and LPG. Rs. 122 billion (on June 30, 2019). Major
(international). At the same time, it is company and regularly wins All the products of the Company Shareholders of the Company include Product Total Output MPCL’s Output MPCL’s Share
the most cost efficient E&P Company awards and accolades from are generic and are supplied Fauji Foundation (40%), Government
to midstream and downstream Gas (MMCF) 1,436,542 260,007 18.1%
in the Country with lowest operating various independent bodies of Pakistan (18.39%), OGDCL (20%)
cost of under 10% of gross sales. not only for its financial and customers. The Company and General Public (21.61%). All Fauji Oil & Condensate (BBLs) 32,495,148 603,332 1.9%
operational performance also provides 2D/3D seismic Foundation group companies as well as Source: Pakistan Petroleum Information Service by LMKR on behalf of DGPC.
The Company plays a pivotal role in and reporting but also for its data acquisition, seismic data OGDCL are the associated companies Based on the data for FY 2018-19.
ensuring food security of Pakistan as management, HR, HSE, and CSR processing and drilling services. of MPCL.
around 87% urea production in the practices.
Mari Seismic Unit Camp Site – Bannu West

Our History Unlocking Opportunities

Right from the Start
Mari Gas Field was originally owned in 1985 under the Mari Gas Wellhead The Company has grown from by the Government, extending the
by Pakistan Stanvac Petroleum Price Agreement (Mari GPA). the sale of natural gas from an development and production rights in
Project, a joint venture formed in 1954 inherited field, to the exploration, the lease area till 2019. The extension
between Government of Pakistan and In 1994, the Government divested production, and sale of gas, oil and has enabled MPCL to enhance the
M/s Esso Eastern Incorporated, having 50% of its share and the Company other petroleum products from a recovery and produce more natural
49% and 51% ownership interests, became listed on all the stock number of fields in all provinces gas, which is critically needed in the
respectively. The first gas discovery exchanges of Pakistan. of Pakistan. The name of the Country.
was made by the Joint Venture in Company was changed from "Mari
1957 when the first Well in lower The Company operated only as a Gas Company Limited" to "Mari Since its inception, the Company
Kirthar ‘Zone-B’ Limestone Formation gas production company and was Petroleum Company Limited" (MPCL) had been operating on a cost-plus
was drilled. Production from the field engaged in developing the already in November 2012 to reflect its fixed-return formula under Mari GPA
Maj. Gen. Mahmood Aslam Hayat (Late) - First Managing Director of Mari Petroleum
started in 1967. In 1983, M/s Esso discovered Habib Rahi Reservoir in diversified business operations and 1985. Pursuant to consistent efforts
Eastern sold its entire share to the the Mari Gas Field for supply of gas expanded activities. by MPCL Management, a major
Fauji Foundation. Consequently, it was to new fertiliser plants. The Company milestone was achieved in November by the Government on production evidenced by uninterrupted supply
decided to set up a wholly owned pursued appraisal activities within its The Company had been outsourcing 2014 when Economic Coordination enhancement initiatives. of hydrocarbons to the Company’s
Public Limited Company for the Mari D&P Lease area by drilling step- seismic and drilling business like Committee of the Cabinet approved downstream customers.
purpose of acquiring the assets and out wells to determine the extent of other E&P companies. However, in dismantling of the Mari GPA and its In February 2016, MPCL became
liabilities of the Project. the Habib Rahi Reservoir. 2013 the Company decided to set-up replacement with an international the first Pakistani E&P Company With effect from November 2019,
a services division comprising of a crude oil price linked market oriented to implement its incremental gas an extension of five years in Mari
In 1984, Mari Gas Company Limited In 2001, the Company achieved 2D/3D seismic data acquisition unit, formula. Dismantling of the Mari GPA production project (at Mari Field) lease period has been approved
(MGCL) was incorporated with Fauji a new milestone when it was a 2D/3D seismic data processing has allowed the Company to operate and avail gas price incentive on by the Government, extending
Foundation, Government of Pakistan granted a license for exploration centre and a fleet of three on-shore on commercial terms and become incremental field production offered the Company’s development and
and OGDCL as its shareholders having of oil and gas in addition to the drilling rigs, thus becoming a fully competitive to realise its full potential. in 2012 Petroleum Policy. production rights in the lease
40%, 40% and 20% shareholding, production activities. Since then, integrated E&P company in the area till 2024. The extension will
respectively. The Company took over MPCL has emerged as a successful Country. In October 2015, the Company Mari Field marked its Golden Jubilee help the Company to focus on
the assets, liabilities and operational E&P company with a proven track opted for conversion of Mari D&P on December 22, 2017. These were enhancing recovery from the Field by
control of the Mari Gas Field and record in the field of exploration and In 2014, an extension of five years lease to 2012 Petroleum Policy to 50 years of meticulous operations implementing exploration plans and
commenced business in its own name production. in Mari lease period was approved avail the price incentives offered and true professionalism as ramping-up existing production.
1984 2016
1957 1983 Business reorganised
and incorporated as • Start of
Mari Gas Company Incremental
Limited Production from
Mari Field Fauji Foundation, 1994 2001 Mari Field
discovered by
Esso Eastern with
OGDCL & GoP
acquired Esso’s entire 2014
• Conversion of
Mari Field to 2012
2018
original gas in place operations, including Petroleum Policy
estimated at 2.38 Mari Gas Field Listing on all Stock Entry into oil
Exchanges of
TCF, later enhanced
to 10.751 TCF Pakistan
and gas exploration
Golden Jubilee of 2019
1967 2012 Mari GPA un-interrupted
gas supply from
dismantled and
replaced with a Mari Field
market-oriented Renewal of
formula Mari D&P Lease
MGCL renamed as
Production of
Mari Petroleum
natural gas
Company Limited
commenced
Key Financials
Revenues Profit Gas Oil Share Price
(Rupees in million) (Rupees in million) (BSCF) (Barrels) Year end (Rupees)
2018-19 2017-18
119,635.50
24,327.09
554,081
543,820
257
257
Revenues Rupees in million 119,635.50 100,226.61
100,226.61
244
96,188.65
95,898.24
1,575.6
472,413
232
1,506.2
225
88,791.86
Net sales Rupees in million 59,448.01 40,676.37
414,433
405,055
15,374.34
Profit for the year Rupees in million 24,327.09 15,374.34
1,009.3
908.2
Dividend Percentage 60.00* 60.00
9,136.19
2015-16 6,051.46
Property, plant and equipment - at cost Rupees in million 27,648.46 22,345.12
2014-15 5,650.31
468.6
Number of shares issued and subscribed Shares in million 121.28 110.25
2014-15
2015-16
2016-17
2017-18
2018-19
2016-17
2017-18
2018-19
2014-15
2015-16
2016-17
2017-18
2018-19
2014-15
2015-16
2016-17
2017-18
2018-19
2014-15
2015-16
2016-17
2017-18
2018-19
* This includes final dividend of 20% for the year ended June 30, 2019, proposed by the Board of Directors for approval of the members in the Annual General Meeting to
be held on October 22, 2019.
Application of Revenue Earned Equities and Liabilities

2018-19 2018-19
36.40% O Gas infrastructure development cess 63.78% O Trade and other payables
12.60% O General sales tax 22.09% O Profit and loss account
12.30% O Operating expenses 5.99% O Other reserves
10.90% O Taxation 4.58% O Deferred liabilities
9.70% O Gas development surcharge 2.72% O Provision for income tax
7.90% O Royalty 0.55% O Issued, subscribed and paid up capital
4.50% O Exploration and prospecting expenditure 0.27% O Undistributed percentage return reserve
2.60% O Other charges 0.02% O Unclaimed & unpaid dividend
2.00% O Excise duty
0.80% O Finance cost
0.30% O Other comprehensive loss
Assets
2018-19 Human Resource
2018-19
67.67% O Trade debts

9.41% O Short term investments 518 O Management
7.35% O Property, plant and equipment 665 O Non-Management
5.80% O Development and production assets 45 O Trainees
3.02% O Cash and bank balances
The above manpower includes 50 female employees
2.98% O Exploration and evaluation assets
2.16% O Loans and advances
1.06% O Stores and spares
0.30% O Deferred income tax asset
0.13% O Short term prepayments, interest accrued & others
0.12% O Long term loans, advances, deposits & prepayments
Production facility at Halini Oil Field - Karak Block
Our Vision
MPCL envisions becoming an international integrated exploration and
production company by enhancing its professional capacity through highly
knowledgeable and talented workforce that builds its petroleum reserves
by consistently discovering more than what it produces within Pakistan and
abroad; and improving financial capacity and profitability through efficient
operations, while taking environmental safeguards and catering to social
welfare needs of the communities inhabiting the area of operations.
Our Mission
To enhance exploration and production by exploiting breakthroughs in
knowledge and technological innovations, adopting competitive industrial
practices to adequately replenish the produced reserves and optimising
production for maximising revenues and return to the shareholders whilst
maintaining the highest standards of HSE and CSR.
Laying of Pipeline at Mari Gas Field

Our Commitments
Quality Policy
In order to ensure that our products and
services are of the highest quality, we engage
skilled and qualified personnel, employ state
Providing of the art technology and adhere to the best
uninterrupted industry practices. We have implemented a
petroleum quality management system to ensure that all
products supply our operations and activities are in line with
to customers Maintaining the the requirements of ISO 9001:2008 (Quality
best and the safest Management System).
operational practices
IMS Policy
To realise our strategic vision and to achieve
Adopting advanced professional excellence in petroleum sector,
technology, cost we are committed to meet requirements of
effective/efficient Integrated Management Systems for Quality,
Exploring and
operations, increasing Environment, Occupational Health & Safety
enhancing
operating efficiency and Information Security consistent with
the potential
and adherence internationally recognised management system
of our human
to the highest standards. We are devoted to maintaining
resource
environmental effectiveness and continual improvement
standards of IMS by monitoring Company objectives,
customer satisfaction and complying with the
legal and other applicable requirements. Our
top management is committed to provide all
resources required to ensure compliance with
its IMS Policy and to attain best international
Aligning the interests of performance criterion.
our shareholders, human
resource, customers and
other stakeholders to
create significant business Significant Changes
value characterised by
excellent financial results, FROM PRIOR YEAR
outstanding professional There have been no changes in Principle Business Activities,
accomplishments and Geographical Locations, Vision, Mission, Ownership and
superior performance Operating Structure.
Code of Conduct
MPCL Code of Conduct sets out Compliance with Laws, adopt efficient and productive time
the Company’s objectives and Directives & Rules management schedules.
its responsibilities to various Compliance with all applicable laws,
stakeholders and the ethical regulations, directives and rules Business Integrity
standards required from its directors including those issued by the Board of The directors and employees will
and employees to meet such Directors and the management. strive to promote honesty, integrity
objectives and responsibilities. and fairness in all aspects of its
Confidentiality business and its dealings with
Financial Disclosure Confidentiality of the Company’s vendors, contractors, customers, joint
All transactions should be accurately internal confidential information venture partners and Government
reflected according to accounting must be maintained and upheld, officials.
principles in the books of accounts. which includes proprietary, technical,
Falsification of its books, any of business, financial, joint venture, Gifts, Entertainment & Bribery
the recorded bank accounts and customer and employee information The directors and employees shall not
transactions are strictly prohibited. that is not available publicly. give or accept gifts, entertainment or
any other personal benefit or privilege
Conflict of Interest Conduct of Personnel in Dealings that could influence business
The directors and employees of the with Government Officials dealings.
Company must recognise that in the The Company shall deal with the
course of performing their duties, Government officials fairly and Insider Trading
they may be out into a position where honestly and within the ambit of the Every director and employee who has
there is a conflict in the performance applicable laws, in order to uphold the knowledge of confidential material
Health, Safety & Environment
of such duty and a personal interest corporate image of the Company. information is prohibited from trading
The Company, its directors and Involvement in Politics
they may have. It is the overriding in securities of the Company to which
employees will endeavour to exercise The Company shall not make Equal Employment Opportunity
intention of the Company that all Time Management the information relates.
a systematic approach to health, payments or other contributions to It is the policy of the Company to
business transactions conducted by it The directors and the employees of
safety and environmental management political parties and organisations. provide employment opportunities
are on arm’s length basis. the Company shall ensure that they
in order to achieve continuous Employees must ensure that if they without regard to race, religion,
performance improvement. elect to take part in any form of colour, age or disability subject to
political activity in their spare time, suitability for the job.
such activity does not and will not
have any adverse effects on the Compliance
Company and such activities must be All Company directors and
within the legally permissible limits. employees must understand and
adhere to the Company’s business
practices and Code of Conduct.
They must commit to individual
conduct in accordance with the
Company’s business practices and
Code of Conduct and observe both
the spirit and the letter of the Code
in their dealings on the Company’s
behalf.
Accountability
Failure to adhere to the Company’s
business practices or Code of
Conduct may result in disciplinary
action, which could include
dismissal.
Senior Management Celebrating Pakistan Day with MPCL Staff

PROFILE: Board of Directors
Lt Gen Syed Tariq Nadeem Gilani (Retd) Lt Gen Ishfaq Nadeem Ahmad (Retd) Dr Nadeem Inayat Maj Gen Javaid Iqbal Nasar (Retd) Mr Rehan Laiq Syed Iqtidar Saeed
Managing Director, Fauji Foundation Managing Director/CEO Director Investment Director Welfare (Health) Director Finance Director P&D
Chairman MPCL Board Mari Petroleum Company Limited Fauji Foundation Fauji Foundation Fauji Foundation Fauji Foundation
Lt Gen Syed Tariq Nadeem Gilani (Retd) joined Lt Gen Ishfaq Nadeem Ahmad (Retd) is an Dr Nadeem Inayat joined MPCL Board on Maj Gen Javaid Iqbal Nasar (Retd) joined MPCL Mr Rehan Laiq joined MPCL Board on December Syed Iqtidar Saeed joined MPCL Board on May 15,
MPCL Board on January 10, 2018 and was accomplished professional with an illustrious September 18, 2006. He is a non-executive Board on February 12, 2018. He is a non- 01, 2018. He is a non-executive Director 2019. He is a non-executive Director and President
elected as its Chairman. career spanning over 40 years. He has held Director and President of Diversification & ERM executive Director and a Member of the HR&R and a Member of the Audit, Technical and of the Technical Committee. He is also a Member
various prestigious positions within the Pakistan Committee. Committee. Diversification & ERM Committees. of Diversification & ERM Committee.
He is the Managing Director of Fauji Foundation,
Army including, most notably, Chief of General
Fauji Oil Terminal & Distribution Company Ltd and He is also on the Boards of Fauji Fertilizer Co He is also on the Boards of Fauji Fertilizer Mr Rehan Laiq is a qualified Chartered He has over 42 years of experience in Fertilizer
Staff, Director General Military Operations and
the Chairman on the Boards of Fauji Fertilizer Ltd, Fauji Fertilizer Bin Qasim Ltd, Fauji Cement Company Ltd, FFC Energy Limited, Fauji Fresh Accountant (FCA) with over 22 years of proven Industry. He graduated in Engineering with high
Commander of a Strike Corps.
Bin Qasim Ltd, Fauji Fertilizer Company Ltd, Company Ltd, Fauji Akbar Portia Marine Terminals n Freeze Limited and Fauji Kabirwala Power track record in developing business strategies, honours from Engineering University, Peshawar
Fauji Cement Company Ltd, Askari Cement Ltd, Known for his candid opinions, he is a critical (Pvt.) Ltd, Fauji Oil Terminal & Distribution Company. delivering results, developing organisational and commenced his career in 1974 with EXXON
Askari Bank Ltd, Fauji Kabirwala Power Company and creative thinker and capable of making Company Ltd, Askari Cement Ltd, Daharki Power capability of infrastructure and acquisitions. Chemicals Pakistan. He joined Fauji Fertilizer
He is a Graduate of Command and Staff College
Ltd, Fauji Trans Terminal Ltd, Foundation Power strategic decisions in complex and uncertain Holdings Ltd, Pakistan Maroc Phosphor S.A., Company in 1979 at its inception stage and served
Quetta and National Defence University, He brings in vast international experience of
Company Daharki Ltd, Daharki Power Holdings environment for achieving sustainable results. Foundation Wind Energy-I Ltd, Foundation Wind at all operational locations of the Company. He
Islamabad. He holds a Master’s Degree in financial management at a senior level during
Ltd, FFC Energy Ltd, Foundation Wind Energy-I He has been the architect of several critical Energy-II (Pvt.) Ltd, Fauji Fresh n Freeze Ltd, Fauji was member of FFC’s core team which set up
War Studies from Quaid-e-Azam University, his career with Schlumberger while working in
Ltd, Foundation Wind Energy-II (Pvt) Ltd, Fauji assignments carried out by the Pakistan Army Foods Ltd, Fauji Meat Ltd, FFBL Power Company Urea and DAP Production facilities at Port Bin
Islamabad. multiple countries of Middle East, Asia, Russia
Akbar Portia Marine Terminals (Pvt) Ltd, Fauji for securing the Country’s defence. Ltd, Askari Bank Ltd, Fauji Infraavest Foods Ltd, Qasim Karachi (FFBL) project from 1993 till 2002.
and North America.
Meat Ltd, Fauji Foods Ltd, FFBL Foods Ltd, FFBL Foundation University and Noon Pakistan Ltd. He was commissioned in the Army in October
Gen Ishfaq is well versed with energy security In 2007, he was moved to FFC’s corporate
Power Company Ltd, Fauji Fresh n Freeze Ltd and 1979 and held various prestigious command He has diverse experience of policy compliance,
vis-à-vis conventional and alternate energy Dr Nadeem is also on the boards of different office as Head of Company’s Engineering &
Fauji Infraavest Foods Ltd. and staff positions. In recognition of his management reporting, external and internal
sources, management of national resources, public sector universities and has conducted Technology Division which also included Business
outstanding services, he was awarded Hilal-e- transformation and analytical business support
He was commissioned in Pakistan Army on management of change at strategic institutions various academic courses on Economics, Development. He led the company’s strategies for
Imtiaz (Military). to ensure profit maximisation.
26 Oct 1979 with the coveted President’s and negotiations and contracting at the highest International Trade and Finance at reputable business diversification and globalisation including
Gold Medal. During his illustrious career, he levels. He holds M.Sc. degree in National institutions of higher education in Pakistan. He is also on the Boards of Fauji Fertilizer Co investments in renewable energy projects,
commanded a brigade, division and a Corps. He Resource Strategy from Industrial College of He is also a member of Pakistan Institute of Ltd, Fauji Fertilizer Bin Qasim Ltd, Fauji Cement off-shore fertilizer production and evaluation
has also held the prestigious appointments of Armed Forces (USA) and M.Sc. degree in War Development Economics. Company Ltd, Fauji Kabirwala Power Company of investment in Thar coal projects. In 2013, he
Commandant Armed Forces War College, NDU, and Strategic Studies from National Defence Ltd, Fauji Oil Terminal and Distribution Company was appointed as Group General Manager and
He holds a Doctorate in Economics and has over
Islamabad and Chief of Logistics Staff at General University Islamabad. He is also a graduate of Ltd, Foundation Power Company Daharki Ltd, subsequently as Chief Technical Officer of the
28 years of diversified experience in corporate
Headquarters. He also served in Saudi Arabian Command and Staff College, Quetta and Joint Fauji Akbar Portia Marine Terminal Ltd, FFC Company till his retirement in 2016.
governance, policy formulation and deployment,
Armed Forces from 1983 to 1985 on secondment Services Command and Staff College, UK. Energy Ltd, , Askari Bank Ltd, Askari Cement Ltd,
project appraisal, implementation, monitoring & He is also on the Boards of Fauji Fertilizer
from Pakistan Army. He is a graduate of US Army Fauji Fresh n Freeze Ltd, Fauji Foods Ltd, Fauji
He is an avid reader and a keen sportsman with evaluation, restructuring and collaboration with Company Ltd, Fauji Cement Company Ltd, Askari
Artillery School, Fort Sill Oklahoma, Command Meat Ltd, FFBL Power Company Ltd, Foundation
special interest in hockey and tennis. donor agencies. Cement Company Ltd, Fauji Akbar Portia Marine
and Staff College Camberley (UK), Armed Forces Wind Energy-I Ltd, Foundation Wind Energy-II
Terminal Ltd, Fauji Fertilizer Company Energy
War College NDU Islamabad and US Army War Gen Ishfaq assumed the charge of Managing (Pvt.) Ltd, Daharki Power Holdings Limited, FFBL
Ltd, Foundation Wind Energy-II Ltd, FFBL Power
College, Carlisle Barracks, Pennsylvania. He holds Director/CEO of MPCL on January 26, 2017. Foods Limited, Fauji Infraavest Foods Limited,
Company Ltd, Fauji Fertilizer Bin Qasim Ltd,
Master’s degrees in War Studies from Quaid-e- and Fauji Electric Power Company.
Foundation Power Company Daharki Ltd, Fauji
Azam University, Islamabad and Strategic Studies
Trans Terminal Ltd, Foundation Wind Energy-I Ltd,
from US Army War College, USA.
Fauji Foods Ltd and Fauji Electric Power Company
In recognition of his meritorious services, he was Ltd.
awarded Hilal-e-Imtiaz (Military).
Profile of Board of Directors
Mian Asad Hayaud Din Mr Sajid Mehmood Qazi Mr Shahid Yousaf Dr Naseem Ahmad Mr Ahmed Hayat Lak Ms Ayla Majid
Secretary Petroleum Joint Secretary Director General (Gas) Managing Director GM (Legal Services) Managing Director – Financial Advisory Services
Ministry of Energy Ministry of Energy Ministry of Energy Oil & Gas Development Company Limited Oil & Gas Development Company Limited Khalid Majid Rehman – Chartered Accountants
Mian Asad Hayaud Din joined MPCL Board on Mr Sajid Mehmood Qazi joined MPCL Board on Mr Shahid Yousaf joined MPCL Board on Dr. Naseem Ahmad joined MPCL Board on Mr Ahmed Hayat Lak joined MPCL Board on Ms Ayla Majid joined MPCL Board on June 24,
June 25, 2019 as a non-executive, nominee March 26, 2018 representing Government of September 10, 2015 representing Government August 09, 2019 as a nominee director June 26, 2014 representing OGDCL. He is a non- 2019 representing shareholding interest of
Director representing Government of Pakistan. Pakistan. He is a non-executive Director and of Pakistan. He is a nonexecutive Director and representing OGDCL. He is a non-executive executive Director and member of the Audit General Public (Minority Shareholders). She is an
Member of the Technical and Diversification & member of the Audit and Technical Committees. Director and a member of the Technical and HR&R Committees. Independent Non-Executive Director, President
He is a senior CSP Officer of District
ERM Committees. Committee and Diversification & ERM of the Audit Committee and a Member of
Management Group and is presently serving He possesses around 27 years of professional He holds a Master’s Degree in Law from
Committee. Human Resource and Remuneration Committee.
as Secretary for Ministry of Energy (Petroleum He joined civil service of Pakistan in 1995. He experience and has remained involved in new University of Wolver Hampton and Bachelor
Division). was exposed to the working of Ministries of refineries and oil infrastructure projects and Dr. Naseem Ahmad assumed the acting charge Degree in Law (Honours) from University of She is a renowned name in the finance industry
Economic Affairs, Commerce & Textile and has overseen the execution of more than of MD/CEO OGDCL on August 01, 2019 prior London, United Kingdom. with over 20 years of M&A, project advisory and
He earned a PhD from Fletcher School of Law
Narcotics Control and has since then served at one thousand gas expansion projects in the to which he was serving as Executive Director policy experience. Ms. Ayla heads the Financial
and Diplomacy, USA in 1997 and an MPhil in He previously served in Pakistan Oilfields
crucial positions in Supreme Court of Pakistan Country. At present, he is looking after policy (Production) since June 2016. He holds a Ph.D. Advisory Services at Khalid Majid Rehman
International Relations with first position from Limited as Head of Corporate and Legal Services
and National Accountability Bureau. Mr Qazi related work pertaining to the natural gas in the in Petroleum Engineering from Imperial College, Chartered Accountants.
Quaid-e-Azam University, Islamabad in 1992. Department. He also worked in the National
contributed in formulating and implementing country. London, an M.Sc. in Petroleum Engineering
He obtained two master’s degrees, one in Accountability Bureau as Advisor to the Ms Ayla is a member of the Global Future
the national anticorruption strategy during from the University of Texas at Austin and a
Law and Diplomacy from Fletcher School of Mr Shahid Yousaf holds a Master’s Degree Chairman and as Consultant in the Office of the Council on Energy of the World Economic Forum
his stint at the premier accountability body B.Sc. in Petroleum Engineering from University
Law and Diplomacy, USA in 1996 and another in Geology with specialisation in Petroleum Prosecutor General. for the term 2019-20. She is a Young Global
from 1999 to 2005. He has also performed the of Engineering & Technology Lahore. He is a
in International Relations from Quaid-e-Azam Infrastructure. In addition, he has attended Leader (YGL) of the World Economic Forum
duties of a diplomat at Pakistan’s Consulate veteran Petroleum Engineer who has a rich
University, Islamabad in 1987 with a gold numerous local and foreign courses and honoured in 2015 and is currently serving as
in Manchester, UK, as Counsellor Community experience in domestic oil/gas exploration
medal. He did his bachelors in Political Science trainings pertaining to petroleum projects and Advisory Group Member of the YGLs.
Affairs. Before joining the Ministry of Petroleum, and production operations, management,
and Soviet/ Russian Studies with distinction management, gas pipelines and LNG projects.
he was working as Director General in the well testing, well completions and surface She is the first Pakistani elected on the Global
(magna cum laude) from Amherst College,
Overseas Pakistanis Foundation. facilities. He is also an author/co-author of four Council of Association of Chartered Certified
Massachusetts, USA in 1985. Besides, he has
publications. Accountants (serving since 2014).
attended several international and national Mr Qazi has strong interest in Economics, Public
training courses in trade, law, jurisprudence and Administration and Law. He earned LLM from He has attended a number of courses With significant governance experience Ms.
public administration. Warwick University, UK as Chevening Scholar. on Management, Production and Project Ayla was appointed by the Ministry of Finance,
He is an avid reader of contemporary history Development. Dr. Naseem won Pakistan Government of Pakistan to draft the first Code
During his illustrious career, Mian Asad has
and also follows his passion of hiking and Petroleum Limited competitive scholarship of Governance for Public Sector entities in
served at various positions at Federal as well
landscape photography in his leisure time. (1983) and also held office of Councilor 2013. Currently Ms. Ayla serves on the boards
as Provincial levels, including Deputy Secretary,
Petroleum Engineering Student Association of Government Holdings (Pvt) Limited; Central
World Trade Organisation Wing, Ministry of
(1982-83). He is also a member of Pakistan Power Procurement Authority, Intellectual
Commerce, Director (Administration), Islamabad
Engineering Council and Society of Petroleum Property Rights Organisation and The Helpcare
Capital Territory Administration, Consul
Engineers. Society (a non-profit running “Teach a Child
(Trade and Commerce), Consulate of Pakistan
Schools” for under-privileged children).
in Chicago, USA and Additional Secretary
(Incharge) Establishment as well as Industries Previously she served on the boards of ISE-Real
and Production divisions. Estate Investment Trust, Islamabad Electric
Supply Company and the Islamabad Stock
Mian Asad is also on the board of Pak-Arab
Exchange.
Refinery Limited (PARCO) and Oil and Gas
Development Company Limited (OGDCL). Academically, Ms. Ayla holds MBA from Lahore
University of Management Sciences, LLB
from University of London and ACCA. She has
attended the: “Enhancing Board Effectiveness
– Directors Training” from Lahore University
of Management Sciences, “National Security
Workshop” at the National Defence University
Pakistan, “Global Policy and Leadership” at
Harvard Kennedy School, “Transformational
Leadership module” at the University of Oxford
and most recently “International Workshop
on Leadership and Security” at the National
Defence University, Pakistan.
Profile of Board of Directors

Organogram
External
Shareholders Auditors
Mr Adnan Afridi Mr Muhammad Asif Mr Assad Rabbani

Managing Director GM Finance/Chief Financial Officer GM Corporate Affairs/Company Secretary
National Investment Trust Limited Mari Petroleum Company Limited Mari Petroleum Company Limited
Mr Adnan Afridi joined MPCL Board on March Mr Muhammad Asif is a Fellow Member of the Mr Assad Rabbani is a Fellow Member of the Board of
21, 2019 representing shareholding interest Institute of Chartered Accountants of Pakistan Institute of Chartered Accountants of Pakistan Directors
of General Public (Minority Shareholders). He with over 28 years of professional experience with over 21 years of professional experience
is an Independent, non-executive director and with reputable organisations in Pakistan and with reputable national and international
President of HR&R Committee and Member of abroad. organisations.
Audit Committee.
He is a Certified Internal Auditor from the He joined MPCL in 2003 and was appointed
Mr Afridi assumed the position of Managing Institute of Internal Auditors, USA and a Diploma Company Secretary in 2005. Previously, he
Director NITL on February 21, 2019. He has Associate of the Institute of Bankers in Pakistan. worked in Hydro Power and Textile sector.
24 years’ international experience in Change
He has attended numerous courses and He has attended numerous courses and
Management, business transformation,
trainings on Financial Management, Audit & trainings in Pakistan and abroad on Corporate Audit HR&R Diversification Technical
innovation and profitability enhancement in
Risk Management and Leadership & Business Governance, Leadership and Strategy, Committee Committee & ERM Committee
blue chip companies, public sector and start-up
Strategy from renowned institutes in Pakistan Upstream Economics & Risk Analysis and Committee
situations. He has led a distinguished career in
and abroad, including Harvard Business School. Infrastructure Regulations & Reforms.
financial services and capital markets including
serving as Managing Director of the Karachi
Stock Exchange, CEO, Overseas Chamber of
Commerce and Industry, Chairman of National
Clearing Corporation of Pakistan and Member
of Board of Directors of Central Depository Managing
Company. Mr Afridi has also served on the GM
Director/CEO Corporate Affairs/
Board of Silk Bank Limited and Gul Ahmed
Company Secretary
Textile Mills Limited.
Mr Adnan Afridi has a degree in Economics
(A.B, Magna Cum Laude, 1992) from Harvard
University and a degree in Corporate Law (JD,
Magna Cum Laude in 1995) from Harvard Law
School.
Currently, he is also on the Boards of Bank Al
–Habib Limited, International Industries Limited,
Bulk Transport Company (PVT) Limited, The
GM
Kidney Centre Institute and a Member of SECP GM GM GM GM Business GM GM GM GM
Policy Board. Finance Operations Exploration Reservoir Procurement Human Admin Mari Services
Development Resource & Security Division
& Commercial
GM Resident Head of Sr. Head Manager Manager Regional

Drilling GM Internal Audit Manager Enterprise Risk Information Projects Manager
Balochistan HSE Management Technology Sindh
Administrative Relationship
Functional Relationship
External Reporting
MPCL Board Members visit Miraj-1 Drilling Site in Ghauri Block near Gujar Khan
Chairman's Review Dear Stakeholders,
Financial year 2018-19 was yet regard, Directors’ mandatory training for further improvement of Board’s
another fruitful year for the Company, was arranged at MPCL Head Office operations. These suggestions have
marked with exceptional performance in August 2018. The training was been noted for implementation. We
in all areas of operations. As you conducted by Pakistan Institute of have plans to further strengthen the
will read through the report, the Corporate Governance. All directors evaluation mechanism to make it
Company posted exceptional on MPCL Board along with two HODs more objective and meaningful.
financial and operational results with and two executives including one
revenues, profitability, return to the female executive acquired certification Both our Audit Committee and
shareholders, and contribution to the under directors’ mandatory training HR&R Committee are now chaired
government exchequer all reaching programme. Moreover, an orientation by independent directors, indicating
historic levels. The Company’s HSE session for the Directors on the highest level of governance and
and CSR performance was also Companies Act, 2017 and the Listed transparency.
unparalleled. The Management Companies (Code of Corporate
deserves all the praise for their Governance) Regulations, 2017 was I am also pleased to report that Ms.
dedication and efforts for exceeding also held in August 2018 to apprise Ayla Majid has been elected on the
the stakeholders’ expectations. the Board Members about the latest Board as our first female director, in
changes in corporate regulatory and compliance with the gender diversity
In particular, I want to highlight the governance regime in the Country. requirements of the Regulations.
successful implementation of HRL Further, three of the Board Members
Phase-X Development Project in Mari were sent on foreign trainings There were other changes on the
Field which will ensure stable supply to acquaint them with the latest Board as several new directors joined
of gas to fertiliser industry till 2023. developments and trends in the areas against casual vacancies occurring
This is a great initiative to help out of governance, management and during the year.
fertiliser industry which is in crisis leadership.
for the past several years. I also want I am grateful to all the outgoing
to commend the Management’s Governance of risk is the Board’s directors for their efforts and
efforts to start on-ground exploration primary responsibility and hence a contributions to the Board’s activities
activities in highly prospective but priority area. To effectively discharge during their respective tenures
security sensitive Bannu West and this duty, the Board has constituted and wish them well on their future
Block-28 in the best national interest. a Diversification & Enterprise Risk endeavours. I welcome the newly
Successful hydrocarbon discoveries in Management Committee, which will joined directors and hope that the
these blocks will change the fortune assist the Board by reviewing, inter Board will greatly benefit from their
of these underdeveloped areas and alia, all enterprise risk management rich and diversified experience,
the Country. (ERM) related matters and will leading to outstanding governance of
present its recommendations to the the Company.
We have a diverse, competent and Board for consideration and final
highly potent Board which holds to decision. The Board has also approved In the end, I want to thank you all for
the Company’s vision, mission and establishment of a dedicated your continued support and placing
core values with the ultimate goal of ERM Department to carryout risk your confidence in the Board to lead
serving the interests of stakeholders. management functions in line with the Company to greater heights of
The Board leads and guides the international best practices and corporate performance in the coming
Company through strategic planning regulatory requirements. years.
with a focus on the future. Without
indulging in micromanagement of As required under the Regulations,
the affairs, the Board is ever ready to a formal and effective mechanism
guide and support the Management is in place for annual evaluation
in its endeavours in core operations of the Board, its Committees and
and diversification projects, ensuring Individual Directors. The evaluations
optimal allocation of resources. for the year 2018-19 revealed that
the Board Members were satisfied Lt Gen Syed Tariq Nadeem Gilani
Special emphasis is placed on with the performance of the Board, HI (M), (Retd)
continuous learning and development Committees and Individual Directors. Chairman
of the Board Members. In this There were some valuable suggestions MPCL Board of Directors
Managing Director's Outlook

crude price, efficient production
management, maximum availability
of production and process facility,
fiscal tightening and higher exchange
rate.
We are facing several challenges

with regard to enhancement of
production. These challenges
mainly include: natural depletion of
fields, which need to be managed
without damaging the reservoirs,
non-availability of downstream
customers owing to emergency
shutdowns, non-availability of
new prospective blocks, terrain
and security related challenges
in awarded blocks hampering the
exploration activities, reluctance
Mr Omar Ayub Khan, Minister for Energy, visits MPCL Head Office, Islamabad of service providers to work in less
secure areas, delays in allocation of
discovered hydrocarbons especially
Dear Readers, in case of less than ideal composition
such as heavy oil and low BTU gas,
time required to drill deeper wells
Closing the last year on a high note FY 2018-19 set new records in terms especially in lithologically difficult
of corporate achievements, we of revenues and profitability, with our area and fiscal and regulatory
started this year with both a degree Net Profit reaching an all-time high challenges associated with
of encouragement and an element of Rs. 24.3 billion, soaring 58% from acquisition of foreign blocks.
of challenge. The encouragement the last year's Rs. 15.3 billion. Other
stemmed from the performance key financial indicators also set the Realising the aforesaid challenges
of the last year and the challenge highest benchmarks in any year of the associated with production
appeared from the need of doing Company’ history. enhancement, we have been
better than the last year. Corporate continuously re-aligning our
achievements like human ingenuity The outstanding financial results strategies to adequately compensate
know no bounds. Our performance in were achieved on the back of better for these challenges.
Energy Produced Earnings Per Share/ Net Sales/Net Profit

(MMBOE) Dividend (Rupees in million)
O Earnings Per Share (Rs) O Net Sales
34
34
O Dividend (%) O Net Profit

59,448
40,676
32
31
201
29
28,175
24,327
127
21,713
19,376
15,374
Lt Gen Ishfaq Nadeem Ahmad

83
9,136
6,051
55
HI (M), (Retd)
5,650
51
60
60
Managing Director/CEO
52
52
51
2014-15
2015-16
2016-17
2017-18
2018-19
2014-15
2015-16
2016-17
2017-18
2018-19
2014-15
2015-16
2016-17
2017-18
2018-19
Another achievement that we are

really proud of is the opening up
of highly prospective but security
sensitive blocks for exploration.
These blocks include: which straddles
Hangu, Bannu, North Waziristan
and Kurram districts of KPK and
Block-28 encompassing Kohlu, Sibi
and Loralai districts of Balochistan.
Despite their hydrocarbon potential,
these blocks remained stranded for
decades as previous Operators could
not undertake exploration activities
due to security situation. However, as
soon as we took over Operatorships
Nigerian Ambassador meets MD MPCL
of these blocks, we adopted an
aggressive strategy to start on-
ground activities with the assistance seismic campaign in Zarghun South only be visible gradually. Opening
of security agencies. Despite all D&P lease area. MPCL Board of up of these prospective blocks for
challenges, MSU Alpha Crew has Directors has approved capacity exploration activities will help bring
successfully completed Zipper-I enhancement of MSU Beta Crew after these areas in the mainstream
comprising of 640 sq km 3D seismic which seismic acquisition from Kohlu and expected discoveries of
data covering 2 important leads of side of Block-28 will also be initiated hydrocarbon will secure the
hydrocarbons in Bannu West Block. to expedite the project. Country’s energy future.
COAS visits Mari Petroleum Head Office, Islamabad
MSU Beta Crew has moved to Keeping in view the length of Discovery of new deposits of oil and
Pursuant to these strategies, we supplier-driven. Therefore, while As our principal HRL reservoir of Block-28 for seismic data acquisition exploration and production cycle, gas is the primary pursuit of the
maintained uninterrupted gas devising the gas commercialisation Mari Field has entered into natural after successful completion of the benefits of these projects will E&P business and is crucial for long
supplies from Mari Field without strategy or selecting the field depletion phase, our professionals
any outages even for a single development options, our strategic working ingeniously and employing
day. Extensive coordination with focus is on maximising value for the sophisticated simulation models
downstream customers was done Company besides seeking potential identified 19 sites for new in-fill
to bring down customers' ATA days partnership arrangements with the production wells to extend the
to 104 in 2018-19 as compared to customers. In order to encourage production plateau up to June 2023.
149 days during 2017-18. Resultantly, customers to ensure maximum These wells were drilled in a record
despite producing at the same rate, utilisation of allocated gas volume, time of 9 months and connected
company was able to produce 21% especially in fertiliser sector, the to the production network through
higher incremental volume, thus Company is in the process of spur flow lines with a saving of USD
generating an additional Rs. 6 billion negotiating necessary amendments 10 million from the estimated cost
in incremental revenues compared in agreements with its existing of USD 27 million. This extension in
with the last year. Despite rigorous customers. production plateau will serve the
follow-up and meticulous planning, Company’s strategic interest on one
we at times become helpless In addition to re-alignment of hand and contribute to national food
when a plant goes on emergency strategies, we continued with our security on the other. It is notable that
shutdown. In order to overcome efforts to curtail non-essential the fertiliser industry in the Country Seismic activities in Bannu West Block
this inherited issue, we have taken expenses, generate negotiated has 87% dependence on HRL gas. As
into consideration putting up a savings in procurement of goods another landmark achievement, the
sweetening plant and laying of a and services and utilise in-house Company has secured the extension
pipeline to establish the connection resources wherever possible to of the Mari Field lease for another five
with the National Gas Grid. maintain our distinction of being the years up to November 2024. This will
most cost effective E&P Company in facilitate planning and execution of
Demand-supply dynamics have the Country by keeping its operating mid-term programmes without any
shaped Pakistani gas market as expenses under 10% of Gross Sales. uncertainty of the lease.
I want to highlight in particular that

we are building a school for children
with special needs that will be able
to cater for 200-300 children who will
be offered free daily transport to and
from home. Once completed, this will
be the best school for special children
in Pakistan.
We are also in talks with the

concerned authorities in Islamabad
for launching a tree plantation drive
and installation of water filtration
plants at selected locations.
Going a step further in CSR, we

Chemical Injunction Skid at Bolan East-1 - Ziarat Block
have embarked upon a voluntary
Free Medical Camp at Halini Field - Karak Block
community service programme:
all management employees based
at Head Office Islamabad, Daharki
Two discoveries were made in non- 2018 Bidding Round arranged by the of 0.09 against maximum target and Karachi would participate in
operated blocks: PPL made a gas Government. We also acquired PEL’s of 0.40. This is a distinguished community service for at least 15
discovery at exploratory well Benari entire working interest in Sukkur accomplishment in a hazard prone hours every year. In this regard, MOUs
X-1 in Shah Bandar Block, while Block to become 100% interest industry and was made possible for employee attachments have been
subsequent to close of the year, owner in the Block. by adherence to HSE standards signed with 08 social sector, non-
OGDCL made a gas and condensate and practices by the employees profit organisations. Our employees
discovery at exploratory well Togh-1 All E&P companies are facing a at all levels and locations. It shall have been forthcoming in making
in Kohat Block. MPCL has 32% and challenge of finding larger deposits of also be appreciated that since financial donations for important
33.33% working interest in these oil and gas in the Country and adding dismantling of Mari GPA in 2014, causes and to assist the needy
blocks, respectively. Currently, drilling enough new reserves to arrest the Company has significantly but spending time on community
of exploratory well Bela West X-1 in the general decline of remaining expanded its activities particularly service will give them first-hand
PPL operated Bela West Block is in reserves. The situation may change in the challenging environment of understanding of community needs.
progress. when some frontier areas with Baluchistan and KPK, where seismic
term stability and growth. During the Rig demobilisation and well was put possibilities of larger finds open up crews and operational staff are For the past few years, the
year we made an important crude oil on EWT production within one month In total, an unprecedented 38,681 in due course. Under the prevailing exposed to a number of HSE as Company has been going through
discovery at exploratory well Bolan of Discovery Notice. This was an meters were drilled in operated and scenario, it could be strategically well as security challenges. Despite transformation to change to better
East-1 in Ziarat Block, Balochistan. unprecedented feat. non-operated blocks, which were prudent to farm-in some interesting all odds, our workforce’s resolve in every aspect and to develop agility
It is a ground breaking oil discovery 61% higher than 24,096 meters drilled opportunities abroad to compensate and determination ensured highest in order to capture opportunities and
in Chiltan and Moro/MughalKot In addition, we also made a gas during the last year, indicating an for lack of larger finds of oil and gas standards of HSE performance. ward off risks. In view of our current
formations in Balochistan Province, discovery at exploratory well aggressive drilling campaign. within the Country. We continue to and future requirements, we have
which has opened up new prospects Parwaaz and completed appraisal scout and evaluate opportunities in CSR is another integral part of the established a dedicated, independent
of oil in the Province. The crude has well Tipu-2 and development well We are fully cognisant that it is highly shortlisted countries of Iraq, Nigeria Company’s culture and reflects and state-of-the-art Drilling
been allocated to BYCO Refinery at Shaheen-2 as gas producers, adding imperative for the Company to have and North Africa. continuing commitment of our Department. The Department will help
Karachi and a purchase agreement is to the existing production potential a sizeable inventory of prospective business to the society. Our CSR manage drilling projects in a timely
being finalised with them. of the Company. blocks to implement its aggressive HSE is one of our top priorities to programmes are anchored in a and cost effective manner, develop
exploration programme to arrest ensure no harm to people, assets tripartite approach of development better expertise for increasing drilling
We also made a crude oil discovery at Currently, drilling of exploratory depleting reserves base and achieve or the surrounding environment that involves the community, efficiency, cut down costs and reduce
exploratory well Dharian-1, in Ghauri well Miraj-1 in Ghauri Block is in long term sustainability. We are taking while continuously improving our local government and MPCL drilling related downtime.
Block, Punjab, which was the 2nd progress. This is another deep well all measures to expand exploration performance indicators. Management. The Company’s
consecutive oil discovery in Ghauri in lithologically challenging Potwar acreage to add prospective blocks to CSR activities cover education, In September 2018, we launched an
Block. Early Production Facilities were region. However, within a short span our exploration portfolio. As part of I take pride in reporting that during health, water supply schemes, ERM Programme across MPCL. The
installed, tested and commissioned of four months, the well has been our block acquisition campaign, we FY 2018-2019, the Company sports, philanthropic donations and Company has managed to set-up a
within a record time of 15 days from drilled down to 4,455 meters. won Wali West and Taung Blocks in achieved historically lowest TRCF communication infrastructure. robust enterprise risk management
accolades not just for its financial deficiency through import of LNG. Going forward, we will continue achievements and benefits to them
and operational performance As the indigenous gas is much less exploring farm-in and selected for their continued confidence and
but also for its governance, pricey, it would continue to take farm-out options, acquisition of investment in the future of the
management, HR, HSE and CSR precedence over the imported LNG, international blocks and selected Company.
practices. which is assuring to the local industry diversification projects.
to continue to invest in finding more Finally, I would like to thank our
The achievements during the last oil and gas. More than anything, what gives me Board, employees, partners and all
year that I have briefly touched hope for the future is the amount of other stakeholders for their trust
upon demonstrate Management’s In the coming year, we aim to effort being put in by the employees and continued support, as we look
efforts to meet our stakeholders’ continue running safe and sustainable to support growth and new initiatives. forward to another year of success.
expectations. However, we need to operations focusing on generating Employee awareness and the attitude
strive harder if we want Mari to be additional revenues by selling un- have both transformed significantly
an integrated energy company with utilised gas to swing customers, since the dismantling of old GPA.
international presence. exploiting the advantage of higher
crude price, strengthening fiscal I want to assure our worthy
We have brainstormed whether the tightening measures and enhancing shareholders that MPCL Management Lt Gen Ishfaq Nadeem Ahmad
Company’s core business is at any finance income in view of higher is resolutely committed to enlarge HI (M), (Retd)
risk. This question was necessitated interest rates. the envelope towards greater Managing Director/CEO
due to geopolitics and associated
oil price risks, fast emerging new
technologies that may replace the
foundation at MPCL within a very ensure organisational readiness use of fossil fuels in coming years,
short span of time. A dedicated for future challenges. Therefore, international agreements which
ERM Department headed by the we have constituted a Change have triggered an urgency to reduce
Head of Risk with two Risk Analysts, Management Team from amongst dependence on fossil fuels and last
supported by Risk Champions from existing employees. Apart from but not the least limited remaining
all departments and fields has conducting employee orientation hydrocarbon reserves in the Country.
been established. Activities as per sessions, the Team has carried
improvement road map agreed out a review of successful case Several studies carried out by
with the Risk Consultants are in studies on change management and world’s leading energy companies
progress. Our initiative in the field identified five key areas requiring indicate that while renewable energy
of risk management has also been change at MPCL. These areas sources will take an increasing
recognised by Continuity, Insurance include clarity of purpose, long-term share of energy mix, oil and gas will
and Risk (CIR) Journal, UK. MPCL’s thinking, employee empowerment, remain the world’s primary energy
ERM Programme has been short- performance evaluation and loyalty. source towards 2050. Hence, there
listed as a finalist for the prestigious is no immediate threat to the global
‘International Risk Management The Company’s change management E&P industry.
Award’ to be awarded at CIR’s 10th strategy includes development of an
Annual Risk Management Awards. implementation strategy for change Globally, natural gas is the fastest
initiatives, expansion of organisational growing fuel and Pakistan is well
We have also established a Strategic focus to include cultural aspects in placed with essentially a natural gas
Business Team which is dedicated addition to measurable targets like based energy economy. Countrywide
to identifying new, feasible business financial performance, competency gas infrastructure progressively
opportunities particularly in non-core and requirements-based placement developed over 60 years constitutes
areas to fulfil our growth ambitions. of human resource and ensuring an important asset in the energy
employee engagement to identify sector. The indigenous gas had
The above developments have also areas requiring change and to seek historically maintained 3.5% yearly
necessitated a systematic approach potential solutions. growth up to 2011; it then stagnated
towards change management at for a few years and has now begun
MPCL to derive greater benefits Various industry bodies have to decline. The shortfall has reached
from new business initiatives, endorsed our accomplishments about 4 BCFD, which is equal to
address employee resistance and during the year. MPCL has emerged our current production and effort
prepare them for change and as a ‘serial award winner’ winning is being made to meet the critical Chairman MPCL Board along with the Managing Director witnessing drilling operations at Miraj-1 Well - Ghauri Block
Calendar of Major Events
1
Completion of Zipper-1
SEPTEMBER 2019
(650 sq. kms) of Bannu West

3D Project by MSU Alpha Crew
AP RI L 20 19 Crude oil discovery at exploratory

5
well Dharian-l, Ghauri Block, Punjab
Drilling of 19 development wells as part of
HRL Phase-X Development Project completed
in Mari Field
AU
GU
ST
201
JA N UA RY
9
Mr. Omar Ayub Khan, Minister for Energy,

2 visits MPCL Head Office
Gas and condensate discovery at
20 19
exploratory well Togh-1 in OGDCL

operated Kohat Block
19
20 Commencement of 2D Seismic Data 6
LY
JU Acquisition Campaign in Block-28, Gen Qamar Javed Bajwa, Chief of Army Staff,
3 Balochistan by MSU Beta Crew visits MPCL Head Office
Renewal of Mari D&P Lease till
November 10, 2024
7
Gas discovery at exploratory
DECEMBER 2018
well Benari X-1 in PPL Operated

Shah Bandar Block
19
20
AY
M MPCL included in Top 25 Companies
4 on Pakistan Stock Exchange for the 18
20
Year 2017 R Hydrocarbon Discovery
B E
Completion of 2D Seismic Data TO at Exploratory Well
C
Acquisition Campaign in Zarghun O Bolan East-1, Ziarat Block,
South D&P Lease Area by 8 Balochistan
MSU Beta Crew
Risks and Opportunities Report oversight of the Company’s risk

STRENGTHENING RISK MANAGEMENT practices, the Company decided to
introduce formal ERM.
As per Listed Companies (Code of the Board in discharging this The Committee further provides In September 2018, MPCL launched
Corporate Governance) Regulations responsibility. The setting up the necessary link between ERM, ERM across the Company to develop
2017, the overall responsibility for of a dedicated Enterprise Risk strategy and performance and and provide an approach for the
governance of the Company’s risks Management (ERM) Committee at further strengthens the integration implementation of ERM practices
lies with the Board. the Board-level is not mandatory of risk management within business based on the international standard
for a listed company. However, in its functions. ISO 31000:2018. It is further built
BOARD’S EFFORTS FOR pursuit of continuous improvement upon the ‘Three Lines of Defence’
DETERMINING THE COMPANY’S and adherence to industry best ERM PROGRAMME structure, ensuring assurance at
LEVEL OF RISK TOLERANCE practices, MPCL has setup a The concept of managing risks in all levels of risk management.
The Company’s Board is responsible separate Committee. the Company is not new, MPCL MPCL was supported in this
for providing strategic oversight has always had risks to manage as endeavour by i-Risk Group, a UK
Training Sessions on Enterprise Risk Management by M/s I-Risk Group, UK
and is also responsible for ensuring The Committee ensures that an part of maintaining safe and secure based boutique enterprise risk
that a sound risk management and appropriate control environment working conditions and conducting management consultancy and
internal control system is in place. is established and maintained its business operations efficiently. provider of risk management ERM POLICY The ERM Framework was also
Listed Companies (Code of Corporate covering the Company’s operations, Historically, MPCL was focused on solutions. ERM Policy has further been developed which outlines the
Governance) Regulations 2017 strategy, finances, reporting and managing key risk types like HSE, strengthened with the inclusion of processes, practices and structure
also reiterate this requirement and compliance activities. This is security, projects etc., however, The Company approached minimum expected standards and that MPCL expects staff to adopt
assign the overall responsibility for further driven by identifying risks there was a need for a holistic and adoption of better risk practices that the Company should to meet the standards defined in
governance of the company’s risk to and aligning risks appetite and integrated approach to enterprise risk management by establishing have in place to manage enterprise the Policy.
the Board. tolerance levels to strategic and management. a ‘baseline of expected ERM risks within defined risk appetite.
departmental targets, bringing to practices’ for managing risks. The Policy also recommends the MPCL’s ERM Programme is
The newly established Board view the essence of the applicability Acknowledging this need and to These strategies evolved MPCL’s risk appetite and tolerances for the designed to create a common
Diversification & Enterprise Risk and benefits of formalised ERM facilitate the Board’s Risk Committee existing risk management practices Company, and the scope of risks understanding of risks throughout
Management Committee facilitates processes. in having an efficient and effective to a higher level of maturity. covered. the Company by consolidating
Risks and Opportunities Report
various risk management methods KEY RISKS FACED BY MPCL further encourages and facilitate them to utilise state-of-the-art technology. Management actively works on
being used for differing types A brief account of key risks faced by the Company is presented below, along with an This allows development of intellectual capital within the company and new and improved control and
of risks, and developing a more assessment of the likelihood that the risk will materialise, the possible magnitude/ ensures that the human capital remains abreast with and adopts state-of- mitigations to maintain the likelihood
consistent approach, including impact of the risks, and action plans to mitigate or control these risks: the-art techniques and concepts in all aspects of the business. and magnitude within the agreed
philosophy, terminology and tolerance levels. This is indicated by
methodology. A. Strategic Risks B. Operational Risks the impressive TRCF of 0.09 during the
year, which is much lower than the
ERM DEPARTMENT Internal Internal industry average.
The use of risk expertise across O High dependency on single Mari Field: Reservoir failure/security issues in Mari O Probability of major accidents due to natural causes, human error or
the organisation was promoted by Field could affect the long term sustainability of the business. negligence which can result in injuries, deaths, disruption of operations and Mitigation Strategies:
the newly formed ERM Department associated losses. O The Company follows best
O Impending production decline from Mari Field due to natural depletion could
and was further facilitated within industry practices vis-à-vis use
result in loss of conventional as well as incremental price revenue. External
each department by identifying and of technology, due diligence
engaging Risk Champions (focal O Inability to achieve reasonable Reserve Replacement Ratio. O Challenges of difficult terrain, extreme weather conditions, lack of basic in decision making and strict
persons from each department) infrastructure in remote and frontier regions, precarious security situation compliance with HSE standards
O Delay in commercialisation of discoveries impacting achievement of
to support risk and control owner and high security cost at places where the Company operates or holds and practices.
organisational objectives.
and to promote risk initiatives. ERM working interests.
External O MPCL also collaborates with
Department advises and partners O Breach of digital security compromising the Company’s cyber security and/
national security apparatus to
with business functions’ management O Fast emerging new technologies and trends that may gradually replace the or technology resilience with loss or misuse of data or sensitive information,
ensure safety of personnel and
and Risk Champions to provide use of fossil fuels. business/production disruption.
assets in the security sensitive
leadership, guidance and support to
areas.
ensure the effective implementation
of the ERM Framework across the Likelihood & Magnitude: Likelihood & Magnitude: O Information Security Management
organisation. Strategic risks are both internal and external in nature with the potential of Operational risks are inherent to the E&P sector and can never be fully avoided. System 27001:2013 certification
threatening our future business model and growth targets in the short, medium Due to the nature of such risks, the magnitude and likelihood varies and the and its strict compliance.
With promotion of common and and long term. The magnitude and likelihood of each such risk is closely
consistent risk language, clear monitored and reviewed periodically by the Management and is reported to
communication of roles and the Board. Appropriate mitigation plans are devised to keep the likelihood and
responsibilities and targeted training, magnitude within the agreed tolerance levels.
the Company has been able to become
more risk aware and risk competent. Mitigation Strategies:
With shared knowledge, siloed O Aggressive Exploration Strategy to enhance reserve replacement ratio and
department-level risk management has attaining sustainable future growth in production and revenues.
been steered into coordinated efforts
O In the absence of fresh bidding round for new exploration blocks, the
for an enterprise-level management
Company is actively pursuing domestic farm-in opportunities to enhance
of risks. The management has been
exploration acreage.
able to evidence the benefits of risk
O In view of the limited indigenous hydrocarbon potential, the Company is
management, which allows both
informed decision-making and proactive also evaluating the strategy of farm-in opportunities in overseas exploration
leadership opportunities. and producing assets to augment its reserves base and achieve sustainable
future growth.
Periodic risk identification and O Efforts are underway to extend current plateau period of HRL Reservoir
assessment exercises are carried out at beyond 2023.
both departmental and enterprise level O Enhancing incremental production from HRL Reservoir for maximum
to identify principal risks faced by the exploitation of incremental gas pricing.
company, including those that would
O Apart from efforts in core business, the Company is also actively seeking
threaten its business model, future
operational and financial performance diversification opportunities outside of the E&P sector. Plans include setting
and its sustainability in the long run. up of power plant, investments in oil pipeline project and renewable energy
Along with assessment and evaluation projects etc.
of identified risks, mitigation plans are O MPCL strives to hire the best human capital available in the industry and is
also devised and agreed to bring the continuously working towards the development of their technical skills set
risk exposure to acceptable level. through extensive training and participation in international conferences. It
Risks and Opportunities Report
C. Regulatory & Compliance Risks O Continuous follow-up with State related dues and the Company’s O A strong equity and cash position
Bank of Pakistan for approval for receivables. for both medium and long term
External foreign investments. allows MPCL to enjoy a greater
KEY OPPORTUNITIES FOR MPCL degree of operational freedom
O Delay in requisite approvals from O The Company actively proposes
MPCL is currently pursuing and flexibility in the pursuit of its
the government of allocation of amendments in the Petroleum
opportunities to create value in the diversification plan. The Company,
oil and gas from new discoveries Policy to facilitate E&P industry
short, medium and long term through having zero debt, can readily
depriving the Company of and expand exploration activities
identification of potential areas of raise sufficient debt capital when
sizeable revenues. in the Country.
investment associated with its strategic needed at the most competitive
O Delay in fresh bidding round objectives, policies and targeted terms.
D. Financial Risks
for new exploration licenses/ growth. O The growing domestic energy
blocks hampering the Company External demand and presence of
plans to expand its exploration O The Regulator has announced a
O Reduction in crude oil price significant gap between the
portfolio for aggressive fresh bidding round with a sizeable
may have an adverse effect on gas demand and its supply has
exploration to increase its inventory of blocks in previously
profitability and budgeted cash transformed the domestic market
reserves base, improve reserves unavailable but highly prospective Mr Grant Griffiths, Consultant, I-Risk Group, UK
flows of the Company. into a seller’s market. This allows
replenishment ratio and increase areas. This presents the Company
domestic gas producers like
production revenues. O Delay in settlement of company’s with the opportunity to further
MPCL to negotiate its contracts
dues by its customers due improve its prospect inventory for investment and diversification faced by the Company, including
better, protecting the Company’s
O Current economic situation/ to circular debt issue (Power future growth. opportunities. The Company’s those that would threaten its business
commercial interests.
strict foreign exchange Sector) can negatively impact the strategic business plans are model, future operational and financial
regulations inhibiting Company’s liquidity situation. O After the 2012 Petroleum Policy, O Incremental pricing incentive for accordingly reviewed under guidance performance, solvency and/or liquidity
the Company's financial the Regulator is working on a HRL gas presents the Company of the Board to ensure that identified issues. The Board also reviews the risk
performance and plans for new policy to be announced with with an opportunity wherein opportunities come to fruition and mitigation strategies proposed/adopted
diversification outside Pakistan. Likelihood & Magnitude: the fresh bidding round. This is profits can be maximised if the adequately contribute towards value by the Management, provides guidance
The Company has a strong equity to facilitate new investments in production volumes are enhanced, creation and achievement of the and accords approval where required.
O Long-term strategies and position with adequate equity capital the frontier basins and to better with no damage to the reservoir. Company’s vision.
business performance may be for both medium and long term in the align with the changing business
Executive Risk Profile of the Company
impacted due to unfavourable/ form of sufficient retained earnings environment and offers opportunity
CREATING VALUE FROM ASSESSMENT OF THE PRINCIPAL consisting of various strategic,
unanticipated changes in after distribution of dividend to to the Company to improve its
OPPORTUNITIES RISKS FACING THE COMPANY compliance and financial risks was
government regulations. shareholders. This acts as a cushion to profitability considering its work
The Company has processes in place The Board carries out periodic presented to the Board in its 178th
absorb any potential adverse impact programme targeting frontier areas.
to actively seek and evaluate potential assessment of the principal risks Meeting held on July 30, 2019.
in cash flows.
Likelihood & Magnitude: O In-house seismic acquisition and
Regulatory and Compliance related drilling capacity in the form of Mari
Mitigation Strategies:
risks are extraneous in nature and Services Department allows the
O Active follow-ups at appropriate Company an opportunity to explore
have the ability to significantly
impact the Company’s business levels are kept to ensure timely security sensitive but high potential
model. Likelihood and magnitude payments of government areas in the wider national interest.
of each risk is closely monitored
due to its potential high impact on
the Company. These are regularly
reported to the Board for effective
planning.
Mitigation Strategies:
O The Company keeps a close
watch on changes in regulations
and promptly adjusts its
business strategy and operations
to take advantage of the offered
incentives.
Mr Alex Larsen, Renowned Risk Trainer, with Risk Champions of the Company
Strategic Business Plan and Effect of seasonality on

Resource Allocation business in terms of production
and sales
5. Stakeholders: The emphasis
Oil and gas worldwide generally follow a seasonal trend as demand
is on meeting the expectations
increases in winter mainly due to heating requirements. The same is
of the Company’s stakeholders
mostly true in case of Pakistan where demand for natural gas peaks in
including shareholders, local
winter. However, Pakistan is an energy deficient Country and domestic
communities in the areas of the
Company’s operations, customers,
and commercial demand for natural gas in winters is replaced by demand
employees and JV partners. for power generation in summer. Therefore, demand-supply gap remains
present throughout the year. Seasonality has limited impact on MPCL as
most of the Company’s customers are fertiliser manufacturers and only
Short, Medium and
15-20% of the gas is supplied to power and domestic sectors where
Long Term Objectives
Despite relatively stable oil prices demand is more seasonal in nature. The Company faces pressure issues
during the last year, the Management in winter due to low temperatures. On the other hand, withdrawals by
is continuously reviewing and customer are impacted in summers as their plants’ operational capacity
adjusting its strategic focus to is lower due to higher temperatures. The Company’s production and
optimise its revenue streams. sales are also impacted due to planned and unplanned turnarounds/
Diversification shall remain an shutdowns by the customers. The Company mitigates these factors by
important part of business strategy employing different strategies such as maintaining a close liaison with all
As Benjamin Franklin is reported to in the coming years, besides serious its customers for minimising the shutdowns/turnarounds, adjusting the
have said "failing to plan is planning efforts to expand the Company’s output and using swing customers for unutilised gas.
to fail." Avoiding that pitfall, the reach to E&P sector outside Pakistan.
Management puts special emphasis The Management has outlined the
strategically active and capable focuses on the following strategic
on and dedicates considerable amount following strategic parameters for it c. Long-Term (6-8 Years): Keeping Indicators (KPIs) covering a larger
of channeling the corporate areas while setting Company’s annual
of time and efforts for devising Annual business strategy: in view the constantly changing spectrum of performance indices
resources towards achievement Corporate Objectives and Targets:
Business Plan of the Company which environment of the global energy are calculated bi-annually to
of the set corporate objectives. 1. Core Business/E&P: The focus in a. Short-Term (1-2 Years): The
then serves as a road map for the sector, MPCL plans to respond to monitor and compare the overall
The Plan is operationalised this area is on core E&P activities Company will remain focused on
Company’s activities in the coming the expected shift in the global performance of the Company.
through successive annual the core business with the aim to
year. The Plan aims to: such as seismic data acquisition energy sector by transforming
Corporate Objectives and expand its exploration portfolio
and processing, drilling of wells, its business model. In the long Management Strategies
a. provide a framework for setting Targets (COTs). The allocation of and to increase its revenue
production of hydrocarbons, term, the Company plans to to meet the Objectives
strategic direction of the resources for various activities is streams by enhancing production
reserves enhancement and significantly modify its existing
Company; guided by the priority given in the expansion of exploration acreage. through optimisation of existing Production Enhancement
business model by focusing on
Plan. fields, brining on production new The Company ensured uninterrupted
2. Diversification: The focus in this is renewable and alternate energy
b. serve as basis for more detailed discoveries and reduction in gas supplies from Mari and other
on diversification of the Company’s projects.
planning (setting high level operating cost. fields through:
The Planning Process operations by entering into related
Corporate Objectives and Targets); Monitoring of Performance
The Management believes that businesses such as oil pipelines, b. Medium-Term (3-5 Years): By 1. Extensive coordination with the
O To ensure achievement of
c. align corporate resources “planning process is as important petrochemical industry and power venturing into untapped frontier customers to reduce annual
regions of Pakistan, the Company corporate goals within the
and energies towards agreed as the plan itself” and adopts a generation projects. turnaround/shutdowns
plans to focus on investments stipulated time period a
objectives; systematic and rational planning
3. Financial: The targets in this Management Control System 2. Upward revision of “take-or-pay”
process. All possible efforts are made aimed at adding high potential
area include enhancing net profit (MCS) has been instituted for clauses with the customers
d. assist benchmarking and to keep the process open, iterative blocks in its portfolio to achieve
performance monitoring; by increasing sales, increasing close monitoring and reporting of
and flexible so that it is dynamically positive reserves replacement 3. Re-allocation of unutilised gas
return to the shareholders, fiscal the progress and for mid-course
evolving over the time. While the ratio and sustainable production
e. explain the business objectives to tightening measures, early recovery corrections in case of slippages 4. Use of “swing-customers”
overall direction is provided by the growth. The Company also plans
all tiers of management to involve of receivables, and achieving from the planned course. 5. Successful implementation
Managing Director, the strategies and to add producing assets or near-
and motivate them, and last but financial self-sufficiency for all of HRL Phase-X Development
COTs are evolved at the departmental field development projects in
not the least; segments of Mari Services Division. O Quarterly review meetings of the
level to ensure ownership and its portfolio to sustain growth. Project to enhance HRL plateau
Senior Management are held to
commitment of those responsible for 4. Internal Processes: The focus Similarly, the Company plans period
f. stimulate desired change and make adjustments or alterations
implementing the plan. in this area is on refining internal to actively pursue oil and gas
build on the past successes. in course of actions to achieve the Revenue Enhancement
processes, use of modern interests outside Pakistan.
targets within the specified time.
In view of changing internal and Overall Strategic / technology and innovative Diversification shall also 6. Incremental production from HRL
external business environment, Corporate Objectives techniques to increase efficiency remain the corner stone of the O Besides monitoring corporate reservoir
the Plan is quarterly reviewed To ensure balanced growth of the in all areas of the Company’s Company’s strategy in medium performance under each COT, 7. Better funds management to
and monitored to keep it relevant, Company, Annual Business Plan operation. term. a set of Key Performance enhance finance income
Strategic Business Plan and Resource Allocation

Major Plans and Decisions Department and a Strategic in opportunities abroad and will
a. Corporate Restructuring Business Team. pursue them subject to their
Since dismantling of Mari GPA, prospectivity, economic feasibility,
b. Business Expansion and approval by MPCL Board.
the Company has been posting
exceptional performance in Core Operations: O Seismic data acquisition capacity
all areas of its operations. The O The Company has been of MSU Bet Crew is currently being
Company is supported by a substantially enhancing its enhanced which may be converted
robust balance sheet and strong exploration and development into a full-fledged Third Crew
operational cash flows. Hence, budget since dismantling of Mari depending upon future projects
there are no plans for financial or GPA. The budget for FY 2019-20 availability.
organisational restructuring. has been increased to US$ 334 O Proposal for purchase of another
million (firm and contingent) from 2500HP Rig is also under
The Government has initiated US$ 317 million kept for 2018-19.
the process for divestment of its consideration.
residual shareholding in MPCL. O The Company plans to drill 09 Diversification: Diversification
However, considering the current wells in the coming year. is now an integral part of the
stock market situation and the O Currently, Seismic data acquisition Management’s strategy for long-
procedural requirements involved, is in progress in Bannu West, term sustainability and growth of
it is envisaged that the proposed Block-28, Ghauri, Sukkur and the Company. The Management is
transaction will take some time to Kalchas blocks. exploring several opportunities to
complete. Hence, the ownership diversify business to complement
Production & Processing facilities at Zarghun Gas Field - Balochistan O During the year the Company has
structure of the Company is core operations as well as secure
expected to remain unchanged in won two blocks in the bidding held other sources of revenues.
foreseeable future. by the Government and acquired Opportunities being pursued
Exploration Strategy Key Performance Indicators Significant Changes in Objectives additional working interest in include oil pipeline, refinery,
8. Aggressive exploration and MPCL’s business planning system is and Strategies from the Previous In view of the changed Sukkur block. The Company will methanol project, and power
drilling campaign in operated based on key performance indicators. Year business requirements and to also actively participate in the project.
blocks The Company has implemented There has been no change in the bring-in operational efficiency, upcoming bidding round planned
specialised management control Company’s focus areas from those the Company has established in Oct-Nov 2019. c. Discontinuation of Operations
9. Opening up of security sensitive
systems for reviewing its past reported in the previous year. dedicated Drilling Department,
but highly prospective blocks O In addition, the Company is The Company has no plans to
performance vis-à-vis a set of ‘look- However, actual measureable targets Enterprise Risk Management continuously evaluating farm- discontinue any of its major
10. Expansion of exploration acreage behind’ key performance indicators are revised each year taking into
operations.
Cost Cutting/Budgetary Controls
(KPIs). The formulation of following consideration different internal and MPCL'S POSITION IN
year’s business plan draws input from external factors.
11. Utilisation of in-house resources, the preceding year’s performance on
PETROLEUM VALUE CHAIN
wherever possible the KPIs listed below: The Company has decided to shelve E&P Allied Services
12. Fiscal tightening measures 1. Finding and Development Cost Carbon Capture Project as it has • Seismic Data Acquisition
become economically unfeasible due and Processing
13. Negotiated savings in per BOE of new reserves added • Drilling Rigs & Services
to changed market dynamics. • Other Wellsite Services
procurement of goods and 2. Reserves Replacement Ratio (%)
services 3. Exploration success rate Relationship between the
Operational Strategy 4. Drilling cost per meter Company’s Results and
Management’s Objectives Upstream Midstream Downstream
14. Effective collaboration with 5. Production cost per BOE
Actual financial and operational
national security agencies to produced
results during the year are directly
ensure safety of personnel and 6. Production growth (%) linked with the Management’s Oil Transportation Storage
assets in the security sensitive Refining Distribution Marketing
7. EBITDA per BOE production objectives for the year. The actions
areas.
8. EBITDA per employee defined in Business Plan 2018-19 have Exploration Development Production
15. Adherence to highest HSE led the Company to post exceptional
standards and practices by 9. Petro-technical professionals per
financial and operational results with Gas
s Processing Transportation Marketing
the employees at all levels and MMBOE production
revenues, profitability, return to the
locations. 10. Reserve growth rate (%) shareholders, and contribution to the
government exchequer all reaching
Mari Petroleum Pipelines, Tankers Oil, Gas, Petroleum
16. High impact Social Welfare 11. Reserve to production rate
Company Limited Products Marketing and
Projects historic levels. The Company’s
Distribution Companies
Since there has been no change in performance in the areas of HSE and Gas supply Custo
omers/Consumers
These strategies are elaborated in the the core objectives and targets, the CSR was also exceptional. directly to those on Fertilizer Plants
MPCL System Power Generation Plants
Managing Directors’ Outlook and the KPIs identified above will continue to
Commercial Entities
section on Success Stories. be relevant in the future.
Households
Strategic Business Plan and Resource Allocation

Organisational Overview
FORWARD LOOKING STATEMENTS
strategies. The primary tool for
making resource allocation is
Significant factors affecting the external environment
the budgeting process. At MPCL,
strategic planning and budgeting and organisational response
are interlinked and integrated. The
allocation of resources for various a. Political Environment: The opportunities as well as exploring
activities is guided by the priority Company is playing a pivotal role internationalization options to
given under the Strategic Business in ensuring food security of the limit its exposure to economic
Plan of the Company. Country and making significant factors. The Company is also
contributions to the national pursuing aggressive exploration
Apart from financial capital, other economy in different areas. The in different parts of the Country
resources, in particular human Company operates in the best to augment its core operations
resource are also allocated in line national interest without any for greater financial stability.
with corporate objectives and political affiliation. However,
targets for short, medium and long its operations are not immune c. Social Environment: The
term. Most of the expansion in the to the political environment. Company is directly affected
Company’s human capital has been Any change in the Government by the social environment with
in Exploration, Operations, Business policies pertaining to E&P, fertiliser regards to the local inhabitants
Development and Mari Services and power sector has an impact of the areas where Company
in the coming years, to ensure long Departments in line with growth of on the Company’s operations. undertakes its E&P activities.
term viability of the Company’s the Company’s core operations, while Therefore, the Company remains Therefore, the Company takes
operations. proportionate increase in human on the lookout for new challenges all measures to exhibit respect
capital in finance, procurement or opportunities arising from towards local norms and customs
Company’s Most Significant Financial Resources: The Company
and administration departments to change in national political and brings local community on
Resources had Rs. 63.61 billion in shareholders’
provide expedient support to the core regimes leading to introduction board before commencement of
The Company’s most significant funds at its disposal as of June 30,
functions. of new policies. By maintaining operations to ensure conducive
resources include the following: 2019, allowing it greater flexibility for
professional liaison and working social environment and minimum
pursuing growth and diversification
Human Capital: The Company Inadequacy in the Capital closely with all stakeholders that resistance from the local
opportunities.
considers human capital as its Structure and plans to address create political impact for the communities. The Company technologies for optimisation
most valuable resource. The E&P Allied Capabilities: In-house such inadequacies: Total equity on Company, efforts are made to outlines its CSR targets for of operations. Likewise, the
Company has an appropriate mix seismic data acquisition, processing June 30, 2019 was Rs. 63.61 billion, an make optimal use of opportunities different blocks depending on the most modern equipment is
of highly talented young as well and drilling capabilities at par with increase of 58% over Rs. 40.19 billion and manage risks. specific needs of the people of used for conducting seismic
experienced professionals providing international standards provide the at the end of the last year. The equity the area, thus not only fulfilling activities, drilling operations
simultaneously the right amount of Company with greater flexibility and comprised of issued, subscribed b. Economic Environment: Oil its CSR obligations in a fruitful and production and processing
energy and business acumen for surety of required services especially and paid up capital, undistributed and gas are extremely volatile manner but also putting effective of hydrocarbons. To this end,
optimal performance and growth in security sensitive areas. These percentage return reserve, profit & commodities. Any change in controls on factors related to each year the Company sets
of the Company. In view of the capabilities have been pivotal in loss account and other reserves. The economic environment has social environment. specific targets to improve the
Company’s growing operations, carrying out seismic data acquisition Company’s capital structure was the potential to impact the way it operates including but
its workforce has been gradually projects in challenging areas of Bannu 100% equity financed on June 30, Company’s financial performance d. Technological Environment: not limited to internal processes,
expanding in recent years. Further West, Block-28 and Zarghun South. 2019. and stability. The Company is E&P is a technology driven technologies and manpower,
details on the Company’s human fully cognisant of the volatility of industry. New technologies can and invests heavily to remain
resource can be found in the HR Reputational Resources: The The financial projections indicate oil and gas sector and regularly enhance chances of success, abreast with the rapidly
section of the report. Company’s corporate image and adequacy of the capital structure for evaluates potential measures reservoir recovery, and can changing modern world.
market reputation, reliability, the foreseeable future. The Company and approaches to mitigate help unlock the potential of
Hydrocarbon Reserves: The relationship with customers, suppliers plans to meet all of its financing negative developments in the unconventional resources. e. Environmental Factors: Finding
Company has substantial recoverable and JV partners etc. are also quite requirements during the next year economic environment while Efficient use of technology and producing oil and gas have
hydrocarbon reserves to meet its valuable for its corporate success. through available reserves. Borrowing taking advantage of available can help reduce the costs several ecological effects which
long term supply commitments. from banks will only be used as a fall- opportunities. In this regard, the and bring in more efficiency include air and water pollution,
As on June 30, 2019, the Company Resource Allocation and Capital back option. In view of robust balance Company has already undertaken in operations. The Company damage to the land and even
had recoverable reserves of 597.5 Structure sheet and strong operational cash reorientation of its growth has a dedicated team of IT loss of life due to oil spills,
MMBOE. Concerted efforts are Resource allocation is an important flows, the Management envisages no strategy by focusing on production professionals responsible for gas leakages, accidents and
being made to enhance the reserves management activity that allows problem in securing debt financing in enhancement. The Company maintaining and providing fires etc. These environmental
replenishment ratio to at least 100% for effective execution of corporate future, if needed. is also pursuing diversification state-of-the-art software impacts need to be meticulously
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identified, managed and Engineering: availability of requisite were not mitigated while another well a Bankable Feasibility Study carried to NEPRA for Tariff determination Internal Processes: The Company
mitigated. HSE Department at infrastructure; production rate; got delayed due to difficult terrain out by M/s Fichtner Gmbh for a and Project Development phase continuously improved its internal
MPCL preemptively addresses quality/specification of oil and which hampered civil works at wellsite Combined Cycle Gas Turbine based after getting necessary approvals business processes and successfully
all environmental matters by gas; operational costs; reservoir and preparation of access road. Power Project. The feasibility has from BOD. implemented:
undertaking requisite studies, characteristics and behavior etc. been carried out for both 280MW
O ERM system and procedures
coordinating with government New Hydrocarbon Discoveries and power plant based on 110 MMSCFD Carbon Capture Plant: As
agencies over policies and Operational: security situation Reserves Addition: The Company gas volume and for a 180 MW power previously informed, a pilot project O Competency Management System
approvals and maintaining liaison in areas of operations; natural made three new hydrocarbon plant based on 66 MMSCFD gas for production of food grade liquid for non-technical stream. The
with JV partners for environment disasters; extreme weather discoveries in its operated blocks and volume, scalable up to 280 MW upon CO2 was evaluated as a standalone Phase-1 of the project i.e. CMS for
related matters. conditions; human errors and also drilled two appraisal/development availability of 44 MMSCFD gas. pilot project to see its potential as technical stream was successfully
negligence. wells during the year. One discovery an opportunity for value addition. completed in 2017-18
f. Legal Environment: The was made in a non-operated block. The Feasibility study concludes However, changed market dynamics
O Implementation of SCADA at TIPU
Company maintains numerous Political: geopolitics and The new discoveries resulted in that MCPL power project is viable fueled by significant increase of
Wells, SML/SUL Wells, Shaheen-1
agreements of diverse nature unpredictable oil price swings; expected reserves addition of 324 BCF under both gas scenarios with a very project capex in dollar terms and
and Shahbaz-1 at Central
having government, JV partners international agreements to cut on gas equivalent against a target of 318 competitive/attractive levelized tariff the adverse PKR–US$ exchange
Manifold-II
and other companies (buyers, the use of fossil fuels; changes in BCF. ranging between 6-7 US cents/kWh, rate have made the project
contractors, service providers etc.) government policies concerning placing it high on the merit order of financially unfeasible. Therefore, the O SAP Online Employee Appraisal
as parties to these agreements. energy, petroleum and fertiliser Production of Hydrocarbons: The dispatch. The feasibility study has Management has decided to shelve System
The Company limits its legal sectors; regulatory issues; and local Company produced a total of 33.64 also identified a suitable land, which the project for the time being.
O Virtual Desktop Infrastructure
exposure by carefully deliberating politics. million barrels of oil equivalent is close to the Mari Gas Field, and
upon terms and conditions of such (MMBOE) which was slightly lower the requisite infrastructure/facilities Financial: Gross Sales reached the O SAP Cross Application Timesheet
agreements from legal, technical ANALYSIS OF THE COMPANY’S than 34.02 MMBOE produced in including water source, disposal of highest ever level of Rs. 117,542
O SAP Online Travel Request System
and commercial aspects using CURRENT PERFORMANCE VIS-À- the last year. Despite that, the waste water, highway connectivity, billion from Rs. 100,043 billion of
expertise of officers from each area VIS TARGETS Company was able to further power evacuation etc. the last year. Similarly, Net Sales O SAP Fiori for Mobile Apps, and
before execution. Financial year 2018-19 was the best enhance incremental production reached unprecedented level of Rs.
ever in the history of the Company in from HRL Reservoir as planned. Total Based on the 66 MMSCFD firm 59.45 billion from Rs. 40.68 billion O Business Intelligence System
KEY SOURCES OF UNCERTAINTY terms of revenues and profitability. incremental production of gas reached gas volume available presently, of the last year. The impact of
The uncertainty in E&P operations The Company posted strong financial 33,533 MMCF which was 21% higher Company plans to set-up 180 MW increase in Net Sales was reflected Stakeholders
emanates from multiple sources. Key and operational performance with than 27,797 MMCF produced in the plant, scalable up to 280 MW, upon in Net Profit which jumped by 58%
HSE: The Company managed to
sources of uncertainty for MPCL are as all major performance parameters last year. availability of 44 MMSCFD gas. The to reach Rs. 24.33 billion compared
bring down Total Recordable Case
follow: following a positive trajectory. Govt. is in the process of formulating with Rs. 15.38 billion of the last year.
Frequency (TRCF) to 0.09 against the
Expansion of Exploration Acreage: a new energy policy and therefore Earnings Per Share also increased
maximum target of 0.40. It was the
Geological: inherent uncertainties in Core Activities The Company won Wali West and issuance of Letters of Intent (LOIs) to Rs. 200.59 from Rs. 126.77. After
lowest-ever TRCF in the history of the
E&P business pertaining to structure; Drilling Campaign: For FY 2018- Taung Blocks in the block bidding to new power projects has been payment of final dividend, total
MPCL.
reservoir seal; and hydrocarbon charge 19, a record number of 30 wells round held in 2018. The Company also temporarily put on hold. MPCL is dividend to the shareholders will
etc. acquired 41.1765% working interest continuously following up at the amount to 60% (Rs. 6 per share) CSR: The Company spent Rs. 447.4
(including 18 HRL wells) were
in Sukkur Block from Petroleum highest levels to obtain LOI from for the year in addition to 10% million on different CSR Projects in
planned in operated and non-
Economic: probability of finding Exploration Limited to become 100% PPIB for its 180 MW Combined Cycle bonus shares recommended by the Mari and other operated Fields/Blocks.
operated blocks, out of which 25
and producing from economically wells (including 18 HRL wells) were working interest owner in the block. Power Plant. At the same time, the Board. The Company maintained Contribution to Government
viable reservoirs; exploration and drilled during the year, while drilling Company is also pursuing the early its distinction of being the most Exchequer: The Company contributed
development costs; availability and of 03 wells was in progress at the Diversification resolution of the 44 MMSCFD gas cost effective E&P Company in the highest ever Rs. 77.05 billion to the
cost of required technology; oil price close of the year. One well was MPCL Proposed Power Plant: As per allocation for its own power project. Country with operating expenses Government exchequer on account of
volatility. deferred because its associated risks BOD directive, MPCL has completed On receipt of LOI, MPCL will proceed under 10% of the gross sales. different levies and taxes.
Organisational Overview and F

Foorward
ward Look
kiing
n Stattements
ts
FORWARD-LOOKING STATEMENTS Production & Processing facilities at Sujawal Gas Field
ANALYSIS OF PRIOR PERIOD implementing exploration plans and In addition, the Company is evaluating selected farm-out options, acquisition There is no escaping the fact that Company avoid estimated revenue
FORWARD-LOOKING DISCLOSURES ramp-up existing production to ensure farm-in opportunities in overseas of international blocks, and selected Pakistan is facing an energy security losses of Rs. 88 billion over the
Last year, it was informed that the long term strategic growth of the exploration and producing assets (with diversification projects. crisis within the next decade, and next 4 years.
Company would (i) pursue aggressive Company, thereby contributing towards upside potential) to augment its reserve MPCL, being the custodian of the
exploration and drilling for achieving socio-economic development of the led growth strategy. ANALYSIS OF THE PROSPECTS OF largest gas reservoir and the third In the long run, diversification
a higher reserves replenishment ratio Country. THE COMPANY largest gas producer, is determined to projects will provide the much
(ii) keep looking for avenues to hedge Seismic data acquisition capacity of According to the studies carried out play its due role. needed synergy to the Company’s
itself from the oil price risk faced by The Company is now going beyond the MSU is being enhanced and more E&P by leading energy companies, it has core business.
the E&P sector as a whole and (iii) proven petroleum locations, to least allied services are being added to Mari been concluded that while renewable The Company’s exploration efforts
explore avenues in the energy sector explored frontier areas of high risk and Services Division’s portfolio. energy sources will take an increasing are focused on enhancing its reserves SOURCE OF INFORMATION
that can add value to the bottom line. high reward categories. share of energy mix however, oil and base through reserve-led growth AND ASSUMPTIONS USED FOR
Actual performance of the Company The proposal to purchase another gas will remain the world’s primary strategy. The exploration budget has PROJECTIONS/FORECASTS
and status of projects as explained The Company has started on- 2500HP land drilling rig is also being energy source towards 2050. Hence, been enhanced and drilling activity IN FORWARD LOOKING
in the section titled “Analysis of the ground exploration activities in deliberated upon. there is no immediate threat to the has been ramped up. Some of the STATEMENTS
Company’s Current Performance highly prospective Bannu West and global E&P industry. most prepositive but unexplored The information and assumptions
vis-à-vis the Targets” indicate that the Block-28, which have the potential for The Company is at an advanced stage areas have been opened up for used for projections and forecasts
Company’s performance was on target discoveries the size of Sui and Mari. of diversifying into low BTU gas-based Pakistan has witnessed net depletion exploration. In the long run, the are sourced from PPIS, PPEPCA,
in all areas. The Company has won Wali West and power generation. Opportunities in mid- of reserves at an average of 150 Company is set to benefit from its Economic Survey of Pakistan and
Taung Blocks in the block bidding round and-downstream petroleum sectors MMBOE per year during the last reinvigorated exploration and drilling a number of international oil &
FORWARD-LOOKING STATEMENT held in 2018. Wali West and Bannu are also being explored. In this regard, 7 years. By 2030, gas shortfall activities. More drilling will result in gas industry specific sources such
The Company is going from strengths West are contiguous and thus would the Company has submitted two is projected to reach 6-7 BCF/D, more discoveries which, on one hand as IEA. The data from external
to strengths every year, building have an excellent synergy in terms of expressions of interest, one for a white while more than 80% demand for will enhance the Company’s reserve sources is combined with in-
its human, financial, and technical geological, operational and commercial oil pipeline and the other for a refinery, oil will be met through imports. replenishment ratio to ensure its long house exploration, production
capitals to fuel and sustain its growth aspects. Similarly, Taung Block is as part of Fauji Foundation Consortium. These scenarios indicate that E&P term viability, and on the other hand and financial data. After extensive
in the coming years. adjoining to Badhra Gas Field and in companies operating in Pakistan will will allow it to produce more and examination and deliberations by
close vicinity of gas infrastructure Going forward, the Company will have a major role to play in securing thereby earn more revenues. the area-experts, the Company’s
The Government has approved network, which in case of success continue aggressive exploratory the energy security of the Country in business plan is developed to
renewal of Mari D&P lease till would facilitate early gas production. efforts in existing blocks, maintain the coming years and as such there HRL Phase-X Development Project will set the objectives and targets
November 10, 2024. The renewal The Company hopes to win few more uninterrupted supply of hydrocarbons is no threat to local E&P industry as help to extend the production plateau for coming year(s), providing a
will help the Company to focus on prospective blocks in the upcoming to its downstream customers, while far as demand for hydrocarbons is period of HRL Reservoir of Mari Field foundation for developing forward
enhancing recovery from the Field by bidding round planned in Oct-Nov 2019. at the same time explore farm-in and concerned. up to 2023. The Project will help the looking statements.
Segmental Review
OF BUSINESS PERFORMANCE
Based on the different type of activities, the Company has three strategic BUSINESS RATIONALE OF MAJOR CAPITAL EXPENDITURES/ PROJECTS
divisions, which are considered its reportable segments. The following summary DURING THE YEAR AND FOR THOSE PLANNED FOR NEXT YEAR
describes the operations of each reportable segment:
Reportable Segments Operations

All major capital expenditure/projects during the year were entering into related businesses such as power
Exploration and Production includes all upstream business activities in line with the Company’s strategic objective of reserves generation projects in mid and down stream sectors.
Mari Seismic Unit includes 2D/3D seismic data acquisition services enhancement, increase in production and expansion of The Company plans to set up a gas fired combined cycle
Mari Drilling Unit includes onshore drilling services exploration acreage and growth in allied businesses. power generation unit, based on low BTU gas from Mari
Lower Goru-B reservoir, which will provide the much
Net Sales of Exploration and Production segment increased by Rs.18,772 million Major capital expenditures and projects planned for next needed synergy to MPCL’s upstream business.
during the year as compared to the last year mainly due to increase in sale years are to meet both the objectives of growth led by
prices, which primarily resulted in an increased profit before taxation. focusing on core business as well through diversification.
Focus on core business requires capital expenditure and
Mari Seismic Unit and Mari Drilling Unit earned profits of Rs. 105 million and Rs. projects focused on enhancing its reserves base, through
704 million respectively, primarily due to increase in revenues and efficient use reserve-led growth strategy. Diversification will require
of resources.
Exploration
and Mari Mari Drilling
Production Seismic Unit Unit
(Rupees in million)
Profit / (Loss) before taxation

2018-19 34,729.220 104.677 703.535
2017-18 20,983.406 53.768 (29.661)
Seismic activity in Bannu West Block - North Waziristan

OPENING UP OF BANNU
WEST AND BLOCK-28
FOR HYDROCARBON
EXPLORATION ACTIVITIES
Success Stories MPCL is currently managing and operating

Pakistan’s largest gas reservoir i.e. Habib Rahi
Limestone (HRL) at Mari Gas Field, Daharki,
Sindh and also has achieved a significant
milestone by opening up highly prospective
Bannu West and Block 28 for exploration
activities.
MARI's
CONTRIBUTION
TO FOOD SECURITY
OF THE COUNTRY
Opening up of
Bannu West and Block-28
FOR HYDROCARBON EXPLORATION ACTIVITIES
M
PCL has achieved a districts of KPK, was granted to seismic survey design was carried indigenous resources. Acquisition of The operatorship of the block was and worked on a war-footing. The
significant milestone Tullow Development Pakistan Limited out at M/s KL Geophysics (UK). Zipper-II seismic data is in progress. transferred to OGDCL on July 19, Company has raised 2nd Mari Seismic
by opening up highly on April 27, 2005. The Operator Maintaining the fast pace of work, Currently, Zipper-I 3D seismic is 2016, in a bid to open up the area Unit (Beta Crew) for a mega seismic
prospective Bannu West and Block 28 was unable to commence fast- acquisition of 99 line km 2D seismic being processed at GRI Centre for exploration activities, but this campaign in the area. The campaign
for exploration activities. These blocks track exploration activities due to data was completed during April 2018 China which will be followed by move also remained unsuccessful. for acquisition of 1,487 Line Km 2D
were laying dormant for decades challenging security situation in the despite security challenges. interpretation and firming up of In view of the prospectivity of the seismic data has been executed over
due to inability of their operators area. MPCL, in the best national prospect to spud-in first exploratory block and its potential significance a number of large surface structures
to work in security sensitive and interest, 45% working interest in MPCL then planned to acquire mega well by June 2020 on fast-track in the Country’s energy security, with the objective to place 1st
challenging areas. The achievement the block and took over the block’s 3D seismic data of 850 sq.km in basis. MPCL acquired 95% working exploratory well during the year 2020-
was made possible only due to Senior operatorship. Thereafter, MPCL two zippers (Zipper-I-640 & Zipper- interest from Tullow on April 26, 21, subject to conducive security
Management’s consistent, dedicated commenced fast track exploration II-210 sq.km) through the Company’s Block-28 is located in Kohlu, Sibi and 2018 and subsequently requested environment and timely completion
and unwavering commitment towards activities and successfully completed own Mari Seismic Unit. Zipper-I Loralai districts of Balochistan and OGDCL to transfer the operatorship of Phase-I seismic acquisition
tapping indigenous resource potential 1st year PCA work commitment seismic data has been successfully has an area of about 6,000 sq.km. to MPCL with an objective of programme.
to increase energy supply to bridge within a period of 3½ months completed despite enormous security The Block was granted to Tullow Oil opening the block for exploration
the gap between energy demand and including first on-ground geological challenges/incidents coupled with on January 15, 1991 as an operator; activities on fast track basis. The Field testing has been completed
supply in the Country. field activity since the grant date. rough, rugged and mountainous however, it couldn’t commence operatorship was transferred to to finalise seismic parameters. The
Based on the results of geological terrain; demonstrating MPCL’s exploration activities in the area due MPCL on July 31, 2018. Since then, project is expected to be completed
Bannu West Block, straddling Hangu, field studies and reprocessing of 425 steadfast and untiring commitment to unfavorable security situation. MPCL has tagged the block as a within 18-20 months subject to
Bannu, North Waziristan and Kurram L.km 2D vintage seismic data, 3D towards exploration/exploitation of project of national importance smooth seismic operations.
Mari's Contribution
TO FOOD SECURITY OF THE COUNTRY
M
PCL is currently managing declining by the end of 2019. surface gathering network set bits and mud chemicals. All the The results of the logging and and de-bottlenecking of the surface
and operating Pakistan’s Accordingly, Reservoir Engineering the foundation of HRL Phase-X planned data have been acquired production tests are in line with network is completed.
largest gas reservoir i.e. Department conducted an extensive Development Project, which successfully. the expectations. All of the wells
Habib Rahi Limestone (HRL) at Mari in-house simulation study to commenced after approval from the are being hooked up into the main This project will help the Company
Gas Field, Daharki in Sindh. Around enhance HRL plateau period. The Board with drilling of the first well The Company achieved a difficult gas gathering system. Eleven wells avoid revenue loss of around Rs. 88
87% urea production in the Country is study concluded that a total of 19 Mari 102 in June 2018. milestone by extracting about 100 have so far been stimulated while billion over the next four years, while
based on gas supplied from the HRL in-fill development wells alongwith meters core of HRL formation from stimulation of remaining wells is in foreign exchange around US$ 945
Reservoir. de-bottlenecking of surface Drilling of 19 development wells Mari 102. This was the Country’s progress. Significant increase in the million will be saved, which would
gathering network would be required was completed on April 21, 2019 first ever longest core extraction terminal pressure of about 30 psi have been needed for import of
The HRL Reservoir was discovered to enhance HRL production plateau - two months ahead of June 2019 job with 100% recovery. Extensive at delivery point with 650 MMscfd equivalent quantity of RLNG.
in 1957 and has been in production from 630 MMscfd to 650 MMscfd deadline, without any HSE incident. studies of the acquired core have production rate has been achieved
since 1967. It has been developed and to extend it till mid-2023. USD 10 million were saved by been commenced to gather useful with the addition of these wells into Most importantly, this will ensure
in different phases over the years. It reducing rig move and drilling data which will help in better the system. This gain in delivery-point sustainable gas supply to fertiliser
was forecasted that HRL production Additional development wells timings, use of old inventories understanding and managing the pressure will further improve once sector, thus contributing to the food
plateau of 630 MMscfd will start along with debottlenecking of and innovative application of drill reservoir in future. the stimulation of the remaining wells security of the Country.
Central Manifold at Mari Gas Field, Daharki

M a r i P e t r o l e u m C o m p a n y L i m i t e d
HEALTH,
66 67 A n n u a l R e p o r t 2 0 1 9
SAFETY AND
ENVIRONMENT
VALUE
ADDITION TO
SHAREHOLDERS
Sustainability
and CSR Initiatives Mari Petroleum Company Limited aims to
create long term value for its stakeholders
by taking into consideration how its
operations impact the ecological, social
and economic environment.
CORPORATE SOCIAL
RESPONSIBILITY
HUMAN
RESOURCE
Health Safety and Environment

HSE AND SUSTAINABLE DEVELOPMENT
A
robust HSE management OVERALL PLATINUM AWARD FOR The Company has won several sector
system is vital to improving OCCUPATIONAL SAFETY AND specific awards in the past for its Training on National
HSE related goals, objectives HEALTH HSE practices. However, this year, the Examination Board in
and performance. At MPCL, MPCL won “Overall Platinum Company bagged the Overall Platinum Occupational Safety and
devoted leadership, management Award” at “14th EFP Best Practices Award which was the highest award Health (NEBOSH)
commitment and participation by Awards on Occupational Safety and in the overall category.
all employees to implement HSE Heath” ceremony, organised by the
management systems across the Employers’ Federation of Pakistan on MPCL was declared winner on the
organisation were carried through April 26, 2019 in Karachi. basis of a transparent evaluation
2018-19 to achieve the HSE
objectives of “no harm to people and
environment”.
LOWEST TRCF IN THE HISTORY OF

THE COMPANY
The number of injurious incidents
significantly reduced in 2018-19 and team work for reducing HSE related incidents and for bringing risks to as low as
the Company recorded the best-ever reasonably practicable. Audio and video aids, interactive awareness sessions and
combined (employee and contractor team building exercises conducted for all levels of employees gave outstanding
workforce) Total Recordable Case results in terms of HSE management.
Frequency (TRCF) of 0.09 against the
maximum target TRCF of 0.40. The initiative of HSE workshops to promote team-work and HSE culture has been
very successful. The workshops consist of interactive activities related to HSE
This is a distinguished including presentations as well as outdoor activities to develop communication,
accomplishment in a hazard-prone cooperation, goal setting, leadership, planning and problem solving skills to
industry and was made possible by achieve HSE objectives.
adherence to the HSE standards and
Session on Defensive Driving by
practices by the employees at all Islamabad Traffic Police for MPCL employees
Occupational Health & Safety undertook during our operational
levels and locations.
Management activities:
A number of risk assessment O Establishment of Clinics at all sites
CERTIFICATION AUDIT O Development of Objectives &
techniques and conformance to Targets O No Smoking campaign
In order to achieve excellence in HSE
ISO standards 9001, 14001 & 18001
performance, HSEQ Management O HAZOP & Operational Studies O Health Risk Assessments for
of nomination papers submitted enabled MPCL to establish priorities
System was included in the core Operational sites
TRCF Comparison for eliminating hazards and reduce O Fire Management at all sites
management systems of MPCL. by all the participating companies.
risks related to occupational issues O Malaria & Dengue prevention
In 2007, business processes The evaluation was carried out by O Incident Investigation & Reporting
and safety management. Our Safety campaign at all locations
were streamlined by fulfilling the an independent jury consisting of
1.21
O Air Emission Monitoring

experts in the field of OSHE. Performance TRCF of 0.09 is reflective O HSE Plans for Operational
requirements of ISO standards as
of the following initiatives that we O Job Safety Analysis
1.03
the Company achieved international Activities

0.96
0.96
0.92
certifications. The Award acknowledges MPCL’s

0.81
0.79
commitment to comply with

0.75
0.75
O Permit to work system O Fire Fighting

During the year 2018-19, all applicable HSEQ laws and During 2018-19, more
certification audit for IMS/ISMS regulations. The Company ensures O HSE Risk Identification, Assessment & Controls O Incident Investigation & Reporting
than 100 HSE trainings
0.50
International Standards ISO 9001 that every employee and contractor O Behavior-Based Safety O Safe food handling
0.45
were organised for

0.40
(Quality Management System), works under the safest possible employees at all locations O General HSE awareness O HSE Laws & Regulations
14001 (Environmental Management conditions to avoid accidents, injury on following topics:
0.22
System), 18001 (Occupational to people and damage to property O IEE/EIA awareness session O Housekeeping
0.13
0.11
0.09
Health Safety Assessment Series) and the environment. O IMS & ISMS awareness O Defensive driving
and 27001 (Information Security
July-June July-June July-June July-June O Stress Management O Chemical handling
Management System) was HSE TRAININGS AND WORKSHOPS
2015-16 2016-17 2017-18 2018-19
successfully carried out by external At MPCL, we believe that HSE O Job Safety Analysis O Waste Management
O TRCF (World Wide) OTRCF (Region Asia/Australasia)
auditors without any major non- O TRCF MPCL Targets OTRCF MPCL requirements can be easily O Crisis & Emergency Management O Process Safety Management
compliance. implemented through effective
O Project Risk Assessments & Task The Company operates in all the systems and procedures. Employees Minimised effect to landscape O Use of local firewood for cooking eventual segregation and their
Risk assessments provinces of Pakistan. Therefore, are encouraged to become and soil erosion or heating purposes is prohibited dumping in designated pits. Food
O Road Safety Management based on the classification of environmentally sensible resource. In order to minimise change in O Pits for disposal of drill cuttings and other waste is used as feed
the area i.e. Protected (Wildlife Awareness sessions and trainings landscape and soil erosion during and other wastes are located for fish pond.
O Water Quality Monitoring
Sanctuaries/National Parks/Game are conducted to enhance their our activities following are strictly in an area where minimum O Medical Waste. Incinerator is
O Noise & Ambient Air Monitoring Reserves) or Non-protected, understanding of protection of followed: vegetation clearing is involved mounted for disposing toxic
O HSE Audits & Inspections Initial Environmental Examination environment.
O Disturbance to natural O Movement of project personnel is medical waste from MPCL
(IEE) or Environmental Impact
O Medical screening of catering crew topography and soils is restricted to working areas only hospital and dispensary. All
Assessments (EIA) studies are Soil and Water Contamination is
O Heat stress management centers minimised medical waste is incinerated and
conducted and submitted to the avoided during all Operations
at all locations record is kept and maintained for
Provincial Environmental Protection O Clearing of vegetation is Energy Efficiency
O Sewage is disposed in septic control purpose
O Annual Medical Checkups of all Agencies for approval. These studies minimised O In order to aid in reduction
tanks
Employees are done in collaboration with all O Hazardous waste: Services of
O Cutting of trees is avoided as of global warming, we are
O Grey water is directly disposed in an approved contractor are hired
the stakeholders of the area and much as possible recovering the flue gasses and
Environmental Management at times public hearings are also soakage pits to dispose hazardous solid waste
using them as fuel gas in Amine
O Land requirements are kept at like batteries, tube lights, used
& Compliance held in the project area. Detailed O Soakage pits are constructed in Sweetening Unit
minimum filters and plant trash to comply
The Company is committed to Environmental Management Plans absorbent soil and 300m away
O Best possible use of natural light with EPA rules and regulations
minimising impact of its activities for the whole lifecycle of the from surface water source and O Off-road travel is avoided
and reduction of electricity as
on the surrounding environmental project are strictly monitored by irrigation channels O Vehicles speed is maintained O Use of plastic bags and
and when practicable
receptors in all its operational areas. the Company to ensure that there O Wastes are disposed according to pet bottles: In line with the
During the planning and design phase, are no residual impacts on the Avoid Loss of Vegetation and O Measures for better efficiency of
waste disposal procedures Government’s Clean and Green
environmental risk assessment environment. Tree Plantation heaters and air conditioners with Pakistan initiative, single-use
O Vehicles and fuel tanks are reduced use of high electricity
studies are conducted by engaging plastic bags and plastic bottles
checked for fuel or oil leaks O Minimise land uptake
all stakeholders of the area. A team In addition, the Company has also consuming devices have been banned by the
of experts visits the area and gather acquired international certification O Concrete pads, bunds are O Existing levelled land are used as
O We
We kee
keep
ke p track
trrack
tra k of
o our
ur energy
energ
energ
ergy Management
g at all Companyp y
all the primary and secondary ISO 14001 (Environmental prepared and all fuel tanks are base camp for drilling contractor
consu
consumptio
cons mptio
tions
consumptionsns at
at alll lo
locat
o ion
ocat ions
o
on
ons
locations premises
premi
p ses and
emiise andd field
fi
f eld llocations
ld lo ocati
ocati
ocat
a ons
o s
information regarding environmental, Management System) to ensure properly marked O Existing tracks are used
physical, biological and socio- that its E&P interventions follow the O Spill prevention and contingency O Chopping of trees is avoided as Waste Mana
Wast Managemen
Management
geme t No Di
Disturbance
sturbance
sturb ance to Wildlife
Wildlife
Wildlif e
economic components. Impacts on the standard requirements. plan is prepared and much as possible O Wast Segr
Waste Segregation:
egregati
e
eg at on: Diff
Different
Differe
ferentt O All mitigation
mitiga
tigati
gation
ga tion
on
on measures
me
measu
mea
meas
easures
e listed
listed
s ed in
sted
environment are identified and their implemented
mitigation measures are suggested Continued improvement is ensured O Plantation of environment types
ypess of waste
waste
aste collected
st iiss co
collect
llect
lect
lect
e ed d from
ffro
omm Environmental
Envir
nvir
n vironmen
nmental Management
tall Manage
annage
eme
ment n Plan
nt Plan
O Used oil and vehicle related friendly trees at all locations offices,
offic colony
es,, c olony
lony
o an and
a nd plant
ant site
plan
pla
p lant
la
a ssite for
fo to
to minimise
minimis
imii e noise
mis noi
no e levels,
no sse le e , dust
l vels
vels, dus
ust
u
to minimise the short and long-term through effective implementation
impacts. and monitoring of environmental waste is recycled
O Final disposal of drilling fluids/
solids is done in lined reserve pits
O Produced formation fluids during
testing is flared along with the
gas/collected inside the lined
waste pit
Control of carbon emissions to

maintain air quality
O Generators and vehicles are
maintained in good condition
O Vehicles speed is monitored and
regulated
O Access tracks are watered
(where required)
O Open burning of wastes at any
project site is not allowed
Annual Medical Examination of Management Employees HSE Workshop at Islamabad Sports Complex

Human Resource
MANAGEMENT & DEVELOPMENT
emissions, exhaust emissions and STACK EMISSION MONITORING Lined Pits: Lined water pits for
waste generation are adhered to. The Company vigorously monitors dumping and soaking of produced
the stack and vehicular emissions to water at different wells to save and
O Food waste is not disposed of in
ensure that all the undesired gaseous protect the land from contamination.
the open
emissions are well below prescribed
O Hunting, trapping, feeding, fishing limits set by National Environmental Water Conservation: A Reverse
or harassment of wildlife is Quality Standards. Osmosis (RO) plant has been installed
strictly prohibited at Mari Field to utilise the produced
O Vehicles and equipment are EFFLUENTS MONITORING water, resulting in 30% reduction in
maintained in good condition and Frequent testing and monitoring of the utility consumption.
provided muffles to reduce noise produced water and grey water is
undertaken for keeping undesired Waste Recycling: Recycling of
O Lights used at the well site and
impurities under set limits of NEQS. waste is done by using the packaging
campsite (all activities) are kept
and other material for woodworks,
to the minimum required
Water Conservation/ Treatment horticulture etc.
O Vehicles speed is maintained on Plant: Grey water treatment plant
access roads to avoid incidental has been installed at Mari Field to Energy Saving Measures: Realizing
mortalities of reptiles and other recycle grey water and use it for the critical importance of energy
animals irrigation purposes. Moreover, a grey conservation, the Management has
water treatment plant has also been issued detailed directions for saving
PLANTATION AT MPCL installed at Head Office premises to energy including use of energy
OPERATIONAL AREAS treat water before releasing it into efficient equipment in operations,
MPCL continuously strives for CDA sewerage line. efficient use of air-conditioning
improving climate by planting trees and lighting, ECO driving, water
at field locations. Tree and plants help Injection Well: Water injection well is conservation and reduction in use of
in reducing the temperature and are used for reinjecting produced water paper.
main source of improving oxygen during drilling of the wells and to
leves and reducing carbon dioxide. avoid land contamination.
E
mployees are the heart and soul Learning and Development
of our organisation. The unique MPCL learning and development programme aims at keeping the Company
set of skills, experiences and competitive by affording opportunities to its workforce to enhance their
values brought-in by each employee competencies and broaden their horizon by keeping abreast with the latest
is crucial for the success of the trends in their respective fields. This in turn improves their performance on
Company. We take pride in creating a present jobs and at the same time prepares them for higher positions in future.
work environment where management
and development of talent are taken Number of employees who attended different foreign/local courses, seminars,
very seriously. All efforts are made to symposiums etc. during FY 2018-19 is as under:
attract, develop and retain top-of-the-
line professionals from the market. Technical Non-Technical
Stream Stream Total
Manpower as at June 30, 2019 Foreign Courses 20 41 61

Management 518 Foreign Conferences 24 44 68
Non-Management 665 Local Courses 36 51 87
Trainees 45
Total 1,228 Company Sponsored Post Graduate Foreign Degree Programme
Average Employees 1,208 The Company introduced a fully sponsored post graduate foreign degree
Male Employees 1,178 programme in 2014 for the Management employees to ensure their long term
Female Employees 50 retention and to encourage them to enhance their knowledge and skills set. The
employees are eligible for one year degree programmes in top 500 universities
Interns 140
of the world or two year degree programmes in top 50 universities of the world.
Human Resource Management & Development

such as enterprise risk management, visibility on the workflows, this helped professionals, companies become less
stress management, and growing HR Department to complete the attractive as prospective employers
opportunities for women in the appraisal cycle on time. and often find it challenging to recruit
corporate world. high caliber graduates. To bridge this
With improved data collection, HR gap, MPCL has promoted cooperation
Improvement in HR Policies Department can now easily identify with academic institutions for
and Procedures high-performers and underperformers, two-way benefit. HR Officers of the
The Company has prepared development and training needs, Company actively participate in job
competitive HR policies after thorough progress on goals, and employee fairs and open houses organised at
deliberations, industry benchmarking ratings by department. the campuses. Students from top
and striking a balance between the universities also visit the Head Office
interests of the Company and its Psychometric Testing to converse with our management
employees. The policies are periodically Psychometric Testing was introduced employees to learn about corporate
reviewed and improved in line with for the first time in 2017 to enhance environment, recruitment procedures,
changed requirements. During the year, the effectiveness of recruitment, new HR trends and so on. Moreover,
objective revisions were made in travel selection and promotion process. our General Managers visit various
and transfer policy, compensation and The results from these tests reflect universities as guest speakers to
benefits policy and promotion policy to the ability, aptitude and potential directly interact with the students
make the processes more efficient and of the candidates to perform the and guide them about the prevailing
International Women's Day celebration at MPCL Head Office comprehensive. jobs they are being considered for. trends in the industry.
So far, the tool has been applied
New policies were also introduced such on 164 candidates for hiring in the Mari Internship Programme-2018
The Company bears all expenses of the were proposed to fill those Dr. Neil’s Leadership and
as Mari Youth Training Programme and management cadre. During the year, A total of 141 interns attended Mari
degree programme including traveling, gaps. As a result of CMS, the Management Workshop
Education Enhancement Programme. 21 candidates for promotions to MPCL Internship Programme during 2018-
tuition fee and living expenses. trainings were more focused and Renowned leadership trainer Dr.
HR Department conducted several Grade 24 and above were exposed to 19 for six weeks. The students were
productive. Neil Gordon Carrington was invited
workshops at Head Office and field psychometric tests to facilitate the selected from top HEC recognised
So far eleven (11) employees have to conduct a 3-day leadership and
locations to create awareness of newly Promotion Board in decision making. universities of Pakistan for providing
been sent to pursue Masters/MS • E-Learning Programme management workshop at MPCL
introduced policies and procedures. them a platform for relating their
degree programmes in the fields of law, During the year, 146 employees Head Office for the senior and middle
Encouraged by the experience, the academic learning to practical
geoscience, engineering, finance and from non-technical and 42 management employees. Dr. Neil
Introduction of management has decided to apply situations in the field. The interns
oil and gas management in reputable employees from technical Carrington is a Ph.D. from University of
Online Appraisal System psychometric tests for succession were assigned to mentors in each
universities of USA, UK and Australia. streams benefitted from IHRDC’s New England and currently serving as
In line with Company’s yearly planning, promotion of non- department and their performance
e-learning programme. This CEO of Act for Kids, Australia. He is an
objectives, SAP Online Employee management staff to management was monitored against pre-designed
Collaboration with International is a great initiative to enable internationally renowned leadership
Appraisal System has been successfully cadres and absorption of trainees as internship plan. They were required
Human Resource Development employees remotely access expert and executive coach.
implemented. The initiative is aligned officers. to submit comprehensive internship
Corporation (IHRDC) valuable learning resources
with Company’s continuous endeavor reports on completion of their
IHRDC has been a world leader in to improve their knowledge The workshop helped the participants
to optimise business processes for Industry Academia Cooperation internships. A graceful passing out
training and competency development and enhance their skill sets gain insight into modern leadership
improving operational efficiency. With Collaboration between industry ceremony was arranged for the
for oil and gas industry for over 40 to perform their jobs more practices, organisational culture,
automated workflows and approvals, and the academia has always been internees wherein they were given
years. MPCL has acquired IHRDC’s efficiently. understanding the difference between
appraisal process has been made an important but complex subject. Certificates and Best Intern of the
Competency Management System and agreement and alignment and how
simpler and quicker for employees By being out of touch with the Year Award.
E-Learning Module. Management Development to leverage success from a deep,
and managers to complete. With more universities, students and young
Programme authentic and continuous feedback
• Competency Management An extensive two weeks culture. Overall, the workshop was
System (CMS) Management Development a great success and helped the
The CMS tool allowed MPCL to Programme was arranged for the participants to discover their strengths
build a database of job roles, middle manaement group to hone and weaknesses as leaders.
required competencies and skill their management and leadership
levels. Using CMS, employees skills. The Programme comprised 10 In-house Sessions/Talks
were allowed to evaluate their sessions on important themes such In order to create a learning friendly
own performance as well as as becoming an effective supervisor, and knowledge sharing corporate
performance of other employees. developing leadership skills, building environment, the Company regularly
They were given the opportunity high performance teams, re-visiting arranges innovative and interactive
to showcase their skills and delegation skills, stress management, in-house sessions for the employees.
certifications and compare their time management and goal setting, During the year, 23 such sessions
actual vs desired skill level. The problem solving and decision making, were conducted. The sessions and
gaps in employees’ competencies communication skills, emotional talks focused on the development
were identified and learning plans intelligence and work life balance. of certain technical and soft skills
Gym facility for MPCL employees
Human Resource Management & Development

VALUE ADDED TO THE
Shareholders’ Net Worth
O
HR can play an active role in Community Service Programme for ne of the Company’s greatest Sponsor Shareholders General Public
formalising the informal learning and MPCL Employees achievement over the years
knowledge sharing in order to create The Company has embarked upon has been to maintain a Total Holding (Shares) 94.5 million 26.8 million
an organisation that is responsive to a community service programme balance among the varying and Total Investment (Rs) 294 million 134 million
internal and external factors. whereby all management employees often competing expectations of its
Current Worth of Holding (Rs) 95 billion 27 billion
based at HO Islamabad, Daharki and different stakeholders. The Company
At MPCL, HR Department performs Karachi would participate in community has consistently delivered long term
several roles to ensure sustainable service. The employees are required value to its shareholders without Total Value Addition
operations, but the most important to complete 15 hours of community compromising on sustainability Actual Investment 428 million
one is embedding sustainability into service per year (on weekends, practices. Current Worth 122 billion
the Company’s culture in order to evenings or annual holidays) as per
In addition, the shareholders are paid guaranteed dividends. During FY 2018-19,
align the leadership and employees’ their convenience. In this regard,
dividend amount was Rs. 728 million (approx.).
efforts with the Company’s long MOUs for employees attachments
term vision of sustainable business. have been signed with 08 not-for-profit
The Department plays a key role in organisations working in different
In recognition of overall performance,

hiring and developing talent that can
deal with both present and future
sectors. MPCL employees have been
forthcoming in making financial Supply Chain Contribution to
sustainability challenges facing the donations for important causes and
the Best Intern Award of the Year
2018 was awarded to Mr. Muhammad
Hamza Mutahir, a Graduate from the
Company by adopting a holistic and
integrated approach to overcoming
to assist the needy in their personal
capacity as well as part of Mari, but
Management National Economy
these challenges. spending time on community service MPCL is involved in a global supply-
Institute of Business Administration. O Ensuring Country’s food security: Around 87% urea production based on
will give them a new perspective and chain that includes procurement from
MPCL supplied gas.
HR policies and procedures of the broaden their vision. domestic and international supplier base,
“When I joined Mari's Company are aimed at attracting transportation, and inventory control/ O Providing gas to WAPDA for power generation.
internship programme, and retaining the right set of Signing of Union Agreement-2018 materials management. Our goal is to
I had no idea that I was talent and aligning them with the The Company respects the lawful develop mutually beneficial relationships O Providing gas to distribution companies for domestic consumers.
in for one of the best sustainability framework of the rights of the labor and unions. The with all the stakeholders in our value
experiences of my life. The chain particularly our suppliers, which O Highest contributor to Government exchequer on account of various
Company. union agreement with MPCL non-
level of professionalism will help us build a world-class supply taxes and levies (as a percentage of Gross Sales).
management regular employees
and competence at MPCL Discouraging child and compulsory expired on June 30, 2018. In order chain focused on delivering greater value
O MPCL produced hydrocarbons helped save foreign exchange equivalent
is exceptional and my labor is a fundamental concern of to settle a new union agreement, and enabling continued growth.
to Rs. 1.1 Trillion during the last five years.
internship experience at the Company. sessions of negotiations were held
the Company has helped between the Management Team We aim to build long-term collaborative
me a lot in growing as Succession and Career Planning and Union Representatives (CBA) at partnerships with our suppliers who
an individual, landing a For continuous development of Mari Field Daharki and Head Office, share our values and who are willing
job four months prior to employees who have the potential Islamabad. The negotiations were and capable of helping us achieve our
graduation.” to fill key leadership positions in concluded amicably and consequently business aspirations. We expect our Foreign Exchange Contribution to
the Company, a comprehensive Union Agreement-2018 was finalised. suppliers to share our commitment Saving Government Exchequer
Muhammad Hamza Mutahir, Succession Plan has been crafted, The signing ceremony took place to sustainability and to be able to (Rupees in million)
329
IBA-Karachi which ensures that experienced and on October 08, 2018 at Head Office, demonstrate how they fulfil this
77,328
commitment, consistent with our
77,046
capable employees are prepared Islamabad. The agreement is effective
HR & Sustainability policies. We engage our suppliers by
74,298
to assume these roles as they from July 01, 2018 for 2 years.
73,242
Sustainability has become a critical become available due to separation using a variety of different sourcing
66%
70,409
225
issue for the businesses today. In of key personnel. The Plan is also Equal Employment Opportunities strategies and recognise the need
%age of Gross Sales

essence, sustainability is concerned instrumental in safeguarding the It is explicit policy of the Company to of a fine balance between having 81%
237
with meeting the needs of society Company against Key Personnel provide employment opportunities a consistent approach across our 77%
supply chain and retaining flexibility 83%
today without compromising the Risk, which arises from unplanned without regard to gender, race, religion,
that supports creative solutions. Our 70%
172
ability of future generations to meet and unexpected change at senior color, age or disability subject to
their needs. Alongside growth and management levels. suitability of the candidates for the job. materials management procedures
142
profit, organisations are increasingly ensure that the best inventory practices
2015 2016 2017 2018 2019
being held accountable for impact are employed and are aligned with
08% GDS 30% GIDC 02% Excise duty
2015
2016
2017
2018
2019
of their activities on society and operational needs and overall financial

10% GST 07% Royalty 09% Income tax
environment. objectives of the Company.
Corporate
Social Responsibility issued by Directorate General of
Petroleum Concessions, as revised
from time to time.
Social Welfare Schemes against

specified minimum financial
obligations are identified and
implemented by a “Social Welfare
Committee” comprising of relevant
MNA, MPA, DCO, Nazims of District,
Tehsil and Union Councils and
representatives of concerned E&P
Company. The schemes are executed
and monitored by concerned DCO
through relevant agency under
intimation to MNA and Union Council.
Major CSR Categories

Our CSR programme is divided into
four major categories:
1. Statutory Obligations: As
per Petroleum Concession
Agreements, MPCL is under
statutory obligation to spend US$
30,000 in each of its operated
blocks on social uplift of the local
communities.
2. Voluntary Spendings over and

above the Statutory Obligations
in JV blocks other than Mari Field.
3. CSR activities at Mari Field.
4. Production Bonus is paid on

commencement of commercial
production from a field and is
deposited in the account of local
OUR CSR PHILOSOPHY communities, we ensure the well- HSE standard and practices. We are administration for social welfare
C
SR is an integral part of the being and safety of all the stakeholders committed to making positive and projects.
Company’s culture and reflects in our value chain through continuous sustainable contributions towards the
continuing commitment of engagement with relevant society through our quality products CSR INTERVENTIONS
our business to the society. Our stakeholders to uphold the best and services, creation of employment The Company spent Rs. 447.39
CSR programmes are anchored in a practices in social responsibility as laid opportunities, contribution to million on numerous CSR Projects
tripartite approach of development down in the ISO 26000 Guidelines. provincial and national exchequers and in its operational areas in all the four
that involves the community, local meaningful CSR interventions. provinces of the Country.
government and MPCL Management. POLICY ON ENVIRONMENT AND
The Company’s CSR activities cover SOCIAL RESPONSIBILITY CSR activities at MPCL are governed An amount of Rs. 60.3 million was
education, health, water supply We conduct our business on a socially by the Company’s Welfare Policy, spent in JV Blocks on account of
schemes, sports, philanthropic responsible manner. We strive to Management System Procedure Statutory Obligations, Rs. 128 million Blocks and Islamabad on various Social welfare projects were undertaken
donations and communication minimise environmental footprints of MSP-CSR-01 and are undertaken in was spent in Mari Field Daharki and CSR Projects over and above the mainly in the priority areas of health, educa-
infrastructure. In addition to our our operations by adhering to highest line with Social Welfare Guidelines Rs. 259.09 million was spent in JV mandatory obligations. tion, water supply and drainage schemes.
Corporate Social Responsibility

Punjab
MPCL was the only organisation to
• Sponsorship for Golf Match for
secure these many awards at the
Corporate Sector at Rawalpindi
event.
Golf Club
• Financial Assistance to Rawalpindi
ADVANCED LEVEL IN ISO 26000
Eye Donors Organisation (REDO)
(SOCIAL RESPONSIBILITY
• Repair & Maintenance of Road GUIDELINES) ASSESSMENT
from Kamarsar–Tola Bangi Khel MPCL was placed at “Advanced”
• Repair & Maintenance of Road Level of performance against
from Kamarsar–Sabirabad Chowk global guidelines of ISO
26000:2010 (Social Responsibility
• Sweet drinking water for
Guidelines), in the assessment
community around Halini Field 24, 2019. The event was graced by
conducted in November 2017
• Free Medical Camps & the President of Pakistan, Dr. Arif Alvi
at MPCL Head Office, Mari Field
Dispensaries at Ghauri & Halini as the Chief Guest and President AJK
Daharki, Sujawal and Ghauri.
Sardar Masood Khan, as the Guest
Sindh of Honor, who also distributed the
MPCL is the only Oil & Gas
Awards.
• Repair/Complete Overhaul of Company in Pakistan to be
Bus for Special Education School, MPCL won three prestigious formally assessed for ISO 26000,
Ghotki Awards at the event including: and the only Company to have
• Best CSR & Sustainability achieved the Advanced Level
• Provision of Multimedia and
Award for outstanding rating.
Laptop to NH&MP Beat-25,
Daharki high-impact CSR initiatives/
programmes The Company achieved the
highest rating of “Role Model” in
MPCL WINS THREE AWARDS AT • Sports & Recreational Accountability, Ethical Behavior,
11TH ANNUAL CSR SUMMIT 2019 Activities Award for sports Respect for Stakeholders Interests,
11th National Forum for Environment initiatives Respect for the Rule of Law,
& Health CSR Awards 2019 were held • Best CSR Practices Award for Respect for International Norms of
at Serena Hotel Islamabad on January securing “Advance Level” in ISO Behavior and Respect for Human
Management employees visiting Armed Forces Institute of Rehabilitation Medicine (AFIRM)
26000 CSR Assessment in 2017. Rights.
MPCL LEADERSHIP SCHOOL FOR Major Projects Over and Above in PAN-PACIFIC Amateur Golf
CHILDREN WITH DISABILITIES Statutory Obligations (FY 2018-19) Championship at Japan
The Company signed an MoU with • Provision of Furniture for
Special Talent Exchange Programme All MPCL Fields Islamabad Model School
(STEP) on March 15, 2018 for
establishing “MPCL Leadership School • Tree Plantation Campaign at • Financial Assistance to SOS
for Children with Disabilities”. MPCL Fields Children Village
• Financial Assistance to Autism
STEP is Islamabad based cross- ICT
Resource Centre
disability organisation that aims at • Defence/Martyrs Day of Pakistan
mainstreaming of disabled persons 2018 Balochistan
in the society through education and
• AIESEC Youth Speak Forum 2018, • Sponsorship for All Pakistan
training.
NUST Islamabad Chambers & Commerce
• NUST – NIMUN 2019 Conference, Gwadar
The School is currently under
construction with an estimated cost of • NFEH CSR Awards Ceremony • Donation to Umeed Special
Rs. 385 Million and is expected to be 2019 Education Centre, Quetta
operational by December 2019.
• Donation for Diamer-Bhasha and • Adoption of Govt. Technical
Mohmand Dams Fund Institute, Quetta
The School will cater for between 200
• Donation for Cardiac Treatment • Donation for Construction of
and 300 children who will be offered
of Deserving Patients at AFIC Futsal Ground at Mach
free daily transport to and from home.
Once completed, this will be the best • Sponsorship of Senior • Medical Treatment of a minor girl
school for special children in Pakistan. Amateur Golfer to participate from Village Karkan Mari's contribution towards local development
Information Technology
will enable MSPC to provide depth d. SAP Online Travel Request misappropriation. All confidential files,
and time processing services with System documents and records are kept in
improved quality and in reduced time. Paper-based Request for Travel locked desks, file cabinets or offices
The upgrade will enable MSPC to Booking (RTB) has been replaced except when in use; or are kept in
simultaneously handle multiple 2D and with a SAP based system. The office areas or secured facilities
3D time and depth projects. automated process has reduced where access is granted only to the
the time and efforts spent on authorised individuals. Reasonable
Implantation of New Systems preparation and approval of RTBs. caution is exercised to avoid such files,
a. SAP Online Employee Appraisal The system also provides real time documents and records being visible or
System (Covered in detail in HR access to employees’ traveling accessible to unauthorised individuals.
Section) history and related reports.
MPCL has adopted industry leading
b. Virtual Desktop Infrastructure e. SAP Fiori for Mobile Apps software systems to ensure secure
(VDI) SAP Fiori is a modern and intuitive and fast transmission of financial
VDI System was designed in- mobile application interface. It data for recording and reporting of
house and implemented for provides a set of applications financial transactions. The Company
geological, geophysical and that are used in regular business has implemented Microsoft SharePoint
reservoir engineering applications. functions like work approvals, System that extends technological
In-house development enabled financial and various self- edge for safe and fast data storage
MPCL to save capital investment service apps. SAP Fiori provides and retrieval. It provides an effective
in costly high-end workstations all business roles in real time business productivity platform
hardware. The system has boosted on compatible hand devices. equipped with well-integrated set
centralised processing capability Customized Fiori mobile apps are of technologies to bring information
for high performance demanding being used by MPCL Management management, access, collaboration,
technical software application, to perform system based people-driven processes and critical
IT Governance Policy Accurate and quality data availability modeling software suites developed
and made MPCL a pioneer in local approvals while travelling. document management in a single
MPCL’s IT Governance Policy provides is the life blood of E&P companies. by renowned companies like
E&P Industry for implementing VDI environment.
necessary guidelines to ensure Effective E&P data management Schlumberger and Halliburton.
f. Business Intelligence (BI)
effective input and decision-making plays a crucial role in handling large Integrated workflows provide infrastructure.
System The Company securely maintains
pertaining to IT policies, standards, data volume for analysis, correct geophysicists and geologists with
BI refers to the tools, technologies, soft copies of supporting financial
guidelines, processes and procedures. selection of drilling targets, and critical collaborative capabilities that c. SAP Cross Application Time
applications and processes that documents and records in its SAP
The Company’s IT related initiatives and efficient management of oil and gas yield better geological insights. These Sheet (CATS)
are used to collect, integrate, system, which is accessible only to
functions are overseen by a Steering producing reservoirs. Implementation systems help improve exploration SAP CATS has been implemented
analySe, and present an authorised users. Regular backups of
Committee headed by the Managing of state of the art integrated E&P data success rate which distinguishes to replace paper-based timesheets
organisation’s raw data into SAP System is also secured.
Director with all Heads of Departments management system has led MPCL MPCL from other E&P companies. with online submission/
meaningful and useful information.
as its members. The Committee to the introduction and adoption of workflow approval of time-write
The Company has successfully
meets on quarterly basis to evaluate industry’s best practices regarding Mari Seismic Data Processing by employees of concerned Disaster Recovery Plan (DRP)
implemented BI System to
and ensure that the IT Strategy is standardised data management Center (MSPC) is playing a vital department who are working in MPCL’s DRP provides a structured
efficiently build KPI based online
aligned with the Company’s business related workflows in the Company. role by providing high quality and various JV blocks. The key benefits approach to respond to unexpected
dashboards for the Senior
objectives, and effective controls are state of the art 2D and 3D data of using CATS are: incidents that threaten the Company’s
Management. The System is very
in place to safeguard the Company’s The Company strongly focuses on processing services that help the IT infrastructure comprising hardware,
useful for operational insights and
information assets. The Committee increased collaboration between Company to take technically more O Single point entry for all work-time software, networks, processes and
more effective, strategic/tactical
also ensures that the requirements its technical and other functional cognisant decisions. MSPC’s scalable processes. people. Priorities and recovery time
decision-making.
of Information Security Management areas to help steer the selection infrastructure enables it to employ objectives for critical systems are
System (ISMS-27001:2013) are and implementation of information latest geophysical technology across O Automated workflow approval developed in the light of business
adequately met, identifies and systems, which in turn provide the full spectrum of seismic imaging process to efficiently enforce Policy for Safety of Records impact analysis. DRP is periodically
oversees implementation of continual greater integration amongst cross- and reservoir characterisation. CATS process. At MPCL, management of the tested and improved to help enhance
improvements in the ISMS systems. functional teams to promote effective Recent expansion in MPCL’s Company's records is decentralised the efficacy of recovery procedures,
planning, coordination and decision exploration activity demanded an O Real-time access to the and decisions regarding ‘retention processes and ensure improvement
Adoption of New Technologies making during various E&P related increase in MSPC’s computation information and making reporting period’ and ‘destruction’ of records are of the Company’s infrastructure
In line with its mission, Mari Petroleum activities. capabilities. Accordingly, the system more accurate. made at departmental level keeping in readiness, to minimise system down-
exploits breakthroughs in knowledge has been upgraded from 96 time view legal and business requirements. time in disaster situations. A state of
and technological innovations to MPCL’s Exploration and Reservoir core to 512 time cores. Advanced O Quicker follow-up on critical All efforts are made to ensure proper the art remote Disaster Recovery Site
achieve sustainability and operational Departments use industry leading processing modules coupled with project activities and efficient handling of business records to has been established at one of the
excellence. G&G interpretation and reservoir increase in computational power billing process. protect them from loss, misuse or MPCL Fields.
Major Social Events

A tribute to Quaid-e-Azam A Tribute to On 141st birth anniversary of Allama Muhammad Iqbal (R.A),
Mari Petroleum released a song to pay homage to our national
Muhammad Ali Jinnah (R.A) poet, philosopher and one of the most inspiring leaders of Pakistan
On 70th Death anniversary of Quaid-e-Azam Muhammad Ali Jinnah (R.A), Mari
Petroleum composed an anthem to commemorate the charismatic leadership
Allama Iqbal (R.A) Movement. The Song was played on different TV channels.
and untiring efforts of our beloved Quaid in carving out a separate homeland for
the Muslims of Sub-continent. Similarly, on 142nd birthday of Quaid-e-Azam, Mari
Petroleum released a song to pay tribute to our great leader, which was aired on
different TV Channels.
Annual Function 2018

The Company celebrated its Annual sparing time to attend the Function.
Function 2018 on Saturday, February The Managing Director apprised the
2, 2019 at Islamabad Serena Hotel. audience about the Company’s business
The honourable Federal Minister strategy, operational and financial
for Petroleum, Mr. Ghulam Sarwar performance along with future plans.
Khan, graced the occasion as the Subsequent to his address, Outstanding
Kashmir Solidarity Rally Chief Guest. Apart from Management
Employees and their families, previous
Performance Awards, Employee of the
Company Awards, the Best Field Trophy
Rally in support of Kashmiri Brethren held outside
MPCL Head Office on 23rd August, 2019. Managing Directors of MPCL and a and the Best Small Field trophy for the
large number of distinguished guests year 2018 were conferred upon selected
from the Government of Pakistan, E&P employees by the Chief Guest.
Independence Day sector along with local and foreign

dignitaries were also in attendance. The Petroleum Minister while addressing
Celebration
The Country’s 71st Independence Day was celebrated with patriotic zeal
The event started with National
Anthem and recitation from the Holy
the gathering, lauded the role played
by MPCL in the national economy and
congratulated the Management on
and fervor at MPCL Head Office and field locations on August 14, 2019. Quran. In his opening address, Lt consistently outstanding performance. enthralled the audience with her live
Continuing with the past tradition, the Head Office building and adjoining Gen Ishfaq Nadeem Ahmad (Retd), musical performance followed by an
areas were decorated with National and MPCL flags and illuminated with Managing Director MPCL accorded a The Chief Guest’s speech was followed energetic and thoroughly entertaining
beautiful lights to commemorate the day. warm welcome to all the guests and by sumptuous dinner. After the dinner, performance by Mr. Arif Lohar and his
thanked the Petroleum Minister for renowned singer Ms. Hadiqa Kiyani crew.
Pakistan Day Celebration of

Celebration International Women's
The Company celebrated 80th Pakistan Day on 23rd March,
2019 with patriotic zeal and fervor at MPCL Head Office.
Day-2019 at MPCL
Mr. Mohammad Aziz Khan Niazi* was invited to grace the International Women’s Day (IWD) is a global day marked to
occasion as Chief Guest. The Event started with the National celebrate the social, economic, cultural and political achievements
Anthem, followed by: of women. The day also marks a call to action for accelerating
O Tableau/Drama performed by the kids from Islamabad gender parity. Keeping in view the importance of this day and to
Model School give a flavour of empowerment to MPCL female employees, MPCL
O National Songs by the kids from SOS Village celebrated the Day on 08 March, 2019. International Women’s Day
O National Songs by the kids from Autism Resource Centre theme for 2019 was “Balance For Better”.
* Mohammad Aziz Khan Niazi, transported Quaid-e-Azam Muhammad Ali Jinnah (Rahmat Ullah Alaih) Airplane from Peshawar Airport to the Karachi Museum. When the plane was
delivered at the desired location, Mohammad Aziz Khan Niazi got to know it belonged to the Father of the Nation, therefore, Aziz Sahib refused to accept the agreed transportation fee.
Awards and Recognitions

During the year, the Company won a number of awards from
various independent bodies not only for its financial and operational
performance and reporting but also for its management, HSE, and CSR
practices. Major awards won by the Company included:
“Prime Minister’s Award for Three prestigious awards, namely

Corporate Excellence” and “RCCI Premier Award” “Company
“Fastest Growing Company of of the Year” and “Fastest Growing
the Year Award” Company of the Year”
For the 3rd consecutive

year, MPCL won 1st Prize
for the Best Management
Practices in Oil & Gas
Sector
“Overall Platinum
Award” at the
“14th EFP Best
Practices Awards on
Occupational Safety
and Health”
2nd Position for Annual

Report 2017 in the sector
1st Prize for Best
of Fuel & Energy
Employment Practices
and CEO of the Year
Award in the category of
Large National Companies
For the first time MPCL was MPCL Annual Report 2018 was
included in the Top 25 Companies awarded 1st Position in Fuel &
on Pakistan Stock Exchange for Energy sector
the Year 2017
Corporate Governance
However, in line with the provisions Attendance at Board Meetings
of Section 183 of the Companies Act, Five Board meetings were held during the financial year 2018-19. The
2017, Clause 10 of Listed Companies attendance of directors in the meetings was as under:
(Code of Corporate Governance)
Name Meetings Attended
2017, and Clause 73 of MPCL
Articles of Association, the Board Lt Gen Syed Tariq Nadeem Gilani (Retd) 05
has reserved following matters to Lt Gen Ishfaq Nadeem Ahmad (Retd) 05
itself to maintain control over certain Dr Nadeem Inayat 05
matters of strategic, sensitive or Mr. Rehan Laiq 03 1
extraordinary nature or which exceed Mr. Qaiser Javed 02
the thresholds set in the authority Major General Javaid Iqbal Nasar (Retd) 05
delegated to the management. Syed Iqtidar Saeed 01 2
Brig Raashid Wali Janjua (Retd) 04
Matters Reserved for the Board Mr. Asad Hayaud Din 00 3
a) Appointment and removal of: Qazi Mohammad Saleem Siddiqui 02
i) Members of the Board and Mr. Abdul Jabbar Memon 03 4
its Committees including the Mr. Sajid Mehmood Qazi 05
Chairman Mr. Shahid Yousaf 05
Mr. Zahid Mir 05
ii) CFO, Head Internal Audit and Mr. Ahmed Hayat Lak 05
Company Secretary Mr. Adnan Afridi 02 5
iii) Senior Management Staff in Mr. Manoor Ahmed 03
MPCL Grade 26 and above, Ms. Ayla Majid 00 6
ROLE OF THE CHAIRMAN their roles, responsibilities, duties mechanisms are in place to adequately and Engr. S. H. Mehdi Jamal 05
AND THE MD/CEO and powers to help them effectively manage those risks. 1. Joined the Board in December 2018 in place or Mr. Qaiser Javed.
iv) External Auditors*
The Chairman of the Board and manage the affairs of the Company. 2. Joined the Board in May 2018 in place of Brig Raashid Wali Janjua (Retd).
the Managing Director/CEO of The Board has delegated certain 3. Joined the Board in June 2019 in place of Mr. Abdul Jabbar Memon.
b) Directors’ remuneration 4. Joined the Board in November 2018 in place of Qazi Mohammad Saleem Siddiqui.
the Company have well defined, MANAGING DIRECTOR/CEO responsibilities to its committees for 5. Joined the Board in March 2019 in place of Mr. Manzoor Ahmed.
separate but complimentary roles in The Managing Director is responsible review of relevant matters and making c) Annual review of the 6. Joined the Board in June 2019 in place of Engr. S. H. Mehdi Jamal.
line with the Companies Act, 2017 for providing effective leadership to recommendations to the Board. All performance of the Board,
and the Listed Companies (Code of the management and employees Committees operate in accordance Committees and individual Other Directorships of the Executive Director
Corporate Governance) Regulations, and for overseeing the day-to-day with their TORs approved by the Directors MD MPCL is the only executive director on the Company’s Board. He does not
2017. operations and management of the Board. The permanent Committees of d) Strategy and direction, financial hold non-executive directorship in any other company. However, he has served
Company’s businesses and affairs the Board are the Audit Committee, controls, legal and regulatory as Chairman PPEPCA (a not-for-profit organisation) from September 2017 to
CHAIRMAN MPCL BOARD by ensuring that the executive Human Resource & Remuneration compliance, risk management, September 2018.
Chairman is responsible for team implements the policies and Committee, Technical Committee, related party transactions,
providing effective leadership strategies approved by the Board. and Diversification & Enterprise Risk company’s significant policies, Policy for Retention of Fee by an Executive Director
to the Board particularly during He keeps the Board updated on Management Committee. Any agenda changes to the company’s As per Directors’ Remuneration Policy, executive directors are not paid any fee
Board and shareholders' meetings. significant and sensitive issues or matter that requires Board’s capital structure, declaration for attending the board, committee or general meetings.
He sets the agenda of the Board that might affect the Company. approval is first presented to relevant of dividend and bonus shares*,
meetings and ensures that He ensures that operational plans Committee of the Board which, after diversification projects, On the other hand, any person who is an executive director on the board of
reasonable time is available for and control systems are in place thorough deliberations, presents its acquisition and relinquishment another public or private company may join MPCL Board as a non-executive
discussion of the same. He ensures and he regularly monitors actual recommendations to the Board for of working interests and major director with the approval of the Board. Such a person is entitled to retain the
a conducive environment for performance against plans and takes final decision. capital expenditures fee and/or other emoluments received from MPCL against his/her services as a
overall effectiveness of the Board remedial actions, where necessary. non-executive director.
and facilitates and encourages the The Board has delegated the day to e) Major transactions which exceed
contribution of executive, non- OPERATIONS OF THE BOARD day management of the affairs of the MD’s authority or which are Board’s Policy on Diversity
executive and independent directors The Board is responsible for setting Company to the management through outside the ordinary course of MPCL has a diverse and balanced Board which not only represents the
in carrying out the Board’s business strategic objectives, overseeing the MD/CEO subject to the agreed business shareholders proportionately but also provides a mix of professional
in line with applicable laws, rules the effective management and authority limits as detailed in Clause expertise in leadership, finance, economics, engineering, legal, corporate law,
f) Delegation of authority to the
and regulations. At the start of the control of the Company, and 100 of MPCL's Articles of Association oil & gas exploration and production disciplines and business management
Management
term of newly appointed directors, identifying significant business and Managing Director’s General skills and experiences covering adequately all areas of MPCL’s business
the Chairman informs them about risks and ensuring that policies and Power of Attorney. [*subject to approval by the shareholders] undertakings.
The Board follows the diversity executives of FF Group companies is provided by the Corporate Affairs COMMITTEES OF THE
targets set in the Listed Companies also attended the training. Department. BOARD OF DIRECTORS
(Code of Corporate Governance) The Board of Directors oversees the
Regulations, 2017. An orientation session for the Conflict of Interest operations and affairs of the Company
Directors on the Companies Act, 2017 The Directors and the employees of in an efficient and effective manner.
Currently the Board comprises of one and the Listed Companies (Code of the Company must recognise that in For the sake of smooth functioning,
executive and thirteen non-executive Corporate Governance) Regulations, the course of performing their duties the Board has constituted three
directors, including two independent 2017 was also arranged on August 30, there may be a situation where committees. These committees are
directors. Two of the directors 2018 to apprise the Board Members there is a conflict in the performance entrusted with the task of ensuring
represent shareholding interest of with the latest changes in corporate of such a duty and a personal speedy relating to their respective
minority shareholders. regulatory and governance regime in associated interest they may domains.
the Country. have. Directors and employees are
In compliance with regulatory required to be aware of the conflict Audit Committee:
requirements, a female director was Three Board Members were sent on of interest provisions contained in
Role
elected on the Board in the elections foreign trainings to acquaint them the Companies Act, 2017, Listed
The primary role of the Audit
held on June 14, 2019. The Company with the latest developments and Companies (Code of Corporate
Committee is to provide oversight
has obtained a relaxation from SECP trends in the areas of governance, Governance) Regulations, 2017, O compliance with applicable characterised by fraud, corruption
of the financial reporting process,
regarding number of independent management and leadership. MPCL Articles of Association, and accounting standards; and abuse of power and
the audit process, the system of
directors till reconstitution of the MPCL Code of Conduct. They are also management’s response thereto;
internal controls and compliance with O compliance with these
Board in 2022. Hence, the issue of Security Clearance of required to disclose their interests
applicable laws, rules and regulations. regulations and other
independent directors will be duly Foreign Directors beforehand and are not allowed to i. Ascertaining that the internal
addressed at that time. MPCL has never had a foreign be involved in the decision making statutory and regulatory
Terms of Reference control system including financial
director on its Board. In case a foreign regarding any transaction or matter requirements;
The Audit Committee is, among and operational controls,
Directors’ Orientation director is elected on MPCL Board in which they are interested. It is O All related party transactions. accounting system for timely
other things, responsible for
and Trainings in future, security clearance will be overriding intention of the Company and appropriate recording of
recommending to the Board of
A Directors’ Training Programme required from the Ministry of Interior that all business transactions c. Review of preliminary purchases and sales, receipts and
Directors the appointment of external
was arranged at MPCL Head Office through the SECP. A detailed SOP is conducted by it are on an arm’s announcements of results prior payments, assets and liabilities
auditors by Company’s shareholders
on August 28, 29 & 31, 2018. The in place for security clearance and length-basis. to external communication and and reporting structure are
and considers any questions of
programme was conducted by the provision of security to the foreigners publication; adequate and effective;
resignation or removal of external
Country’s premier institute, Pakistan coming into Pakistan to work with MD/CEO Performance Review d. Facilitating the external audit and
auditors, audit fees and provision by
Institute of Corporate Governance. the Company. Security Section of MD/CEO’s report on the Company’s discussion with external auditors j. Review of the Company’s
external auditors of any service to the
In addition to MPCL Directors, CFO, MPCL Administration Department operations, major achievements, and of major observations arising from statement on internal control
Company in addition to audit of its
Company Secretary and two other undertakes coordination with Ministry progress of outstanding issues is interim and final audits and any systems prior to endorsement
financial statements.
executives including one female of Interior for all security related presented to the Board of Directors matter that the auditors may wish by the Board of Directors and
officer, several Directors and senior matters. Supporting documentation as a regular agenda item in each to highlight (in the absence of internal audit reports;
Terms of reference of the Audit
meeting (at least once in each management, where necessary);
Committee are as follow: k. Instituting special projects,
quarter) for review, discussion and
a. Determination of appropriate e. Review of management letter value for money studies or
decisions, all of which are duly
measures to safeguard the issued by external auditors and other investigations on any
recorded in the minutes. During
company’s assets; management’s response thereto; matter specified by the Board of
the year 2018-19, five such reports
f. Ensuring coordination between Directors, in consultation with the
were presented to the Board. The b. Review of annual and interim
the internal and external auditors CEO and to consider remittance
Board is extremely satisfied with financial statements of the
of the Company; of any matter to the external
the performance of the incumbent Company, prior to their approval auditors or to any other external
Managing Director. Financial year by the Board of Directors, g. Review of the scope and extent of body;
2018-19 was the best ever in the focusing on: internal audit, audit plan, reporting
history of the Company in terms of framework and procedures and l. Determination of compliance with
revenues and profitability. Further O major judgmental areas;
ensuring that the internal audit relevant statutory requirements;
details of the Company’s progress O significant adjustments function has adequate resources
and achievements under the resulting from the audit; and is appropriately placed within m. Monitoring compliance with
incumbent MD/CEO are provided the Company; the best practices of corporate
O going-concern assumption;
in Managing Director’s Outlook and governance and identification of
other relevant sections of the Annual O any changes in accounting h. Consideration of major findings of significant violations thereof;
Report. policies and practices; internal investigations of activities and
n. Review of arrangement for staff HR and Remuneration Committee: f. Consideration and approval Attendance in the HR&R operations and allied services, Terms of Reference
and management to report to on recommendations of Committee Meetings which exceed MD’s authorized The Committee has the following
Role
audit committee in confidence, CEO on such matters for key Two meetings of the HR&R Committee limit. specific responsibilities:
The primary role of the Committee is
concerns, if any, about actual to review major HR related matters management positions who were held during the financial year
e. Capital expenditures pertaining A. Diversification:
or potential improprieties in of the Company and present its report directly to CEO or COO; 2018-19. The attendance of the
financial and other matters and directors in the meetings was as to the Company’s core a. The Committee will review and
recommendations to the Board for g. Where human resource and operations and allied services
recommend instituting remedial under: recommend investment strategy
consideration and approval. remuneration consultants are not provided for in the approved
and mitigating measures; Meetings relating to diversification projects,
appointed, their credentials shall Director Attended annual budget and where these which shall be approved by the
o. Recommend to the board of Terms of Reference be known by the committee and exceed MD’s authorized limit.
Mr. Adnan Afridi 00 Board. The Committee shall
directors the appointment of Terms of reference of the HR&R a statement shall be made by
Dr. Nadeem Inayat 02 ensure that such investments
Committee are as follows: them as to whether they have f. Committee’s annual self-
external auditors, their removal, Mr. Zahid Mir 02 are made in accordance with the
any other connection with the evaluation as per Listed
audit fees, the provision of a. Recommend to the board for Engr. S.H. Mehdi Jamal 02 approved strategy.
company; Companies (Code of Corporate
any service permissible to be consideration and approval a
Governance) Regulations, 2017. b. Review external growth
rendered to the company by the policy framework for determining Technical Committee:
h. Review managements proposals opportunities, potential
external auditors in addition to remuneration of directors (both g. Any other matter that may be
for the promotion of senior staff Role diversification projects,
audit of its financial statements. executive and non-executive referred by the Board to the
in accordance with Article 100-c The primary role of the Committee acquisitions, or divestment of
The board of directors shall directors and members of senior Committee.
of the Articles of Association is to review the technical and existing projects/ventures, as
give due consideration to the management). The definition and make recommendations for operational matters of the Company proposed by the Management.
recommendations of the audit of senior management will be Attendance in the Technical
consideration of the Board of and present its recommendations The Committee shall evaluate
committee and where it acts determined by the board which Committee Meetings
Directors; to the Board for consideration and performance of investments
otherwise it shall record the shall normally include the first Four meetings of the Technical
approval. made in diversification projects
reasons thereof; layer of management below the i. Review management’s proposals
Committee were held during over the period.
Chief Executive Officer level; for changes in personnel
Terms of Reference the financial year 2018-19. The
p. Consideration of any other issue compensation policy and c. Review Management’s proposals
b. Undertaking annually a formal The Technical Committee is attendance of the directors in the
or matter as may be assigned by salary structure of employees for strategic alliances with
process of evaluation of responsible for evaluating technical meetings was as under:
the Board of Directors; and make recommendations other entities/companies to
performance of the board as a aspects of all projects/matters
for consideration of the Meetings achieve growth or diversification
q. Approval of resolutions for whole and its committees either pertaining to the Company’s Director Attended
Board. President of the Audit objectives of the Company.
transfer of shares and issuance directly or by engaging external core businesses i.e. exploration
Committee, if not already a Syed Iqtidar Saeed 02
of duplicate share certificates of independent consultant and if & production and allied services B. Enterprise Risk Management:
member, will be the co-opted Brig Raashid Wali Janjau (Retd) 02
the Company, as per provisions so appointed, a statement to and make recommendations for
member of the Human Resource Maj Gen Javaid Iqbal Nasar (Retd) 04 The responsibilities of Committee
of the Companies Act, 2017 that effect shall be made in the consideration of the Board.
Committee for this function; Mr. Sajid Mehmood Qazi 04 with regard to Enterprise Risk
(resolutions to be signed by any directors’ report disclosing name,
The projects/matters may, inter alia, Mr. Zahid Mir 03 Management, inter alia, include
two members). qualifications and major terms of j. Review management’s
include the following: Mr. Abdul Jabbar Memon 02 the following:
appointment; proposals for changes in the Qazi Mohammad Saleem Siddiqui 01
Attendance in the Audit c. Recommending the human Company’s organogram and a. Annual Exploration, Appraisal and a. Ensure that the Company
Committee Meetings resource management policies to make recommendation for Development work programme implements sound fundamental
consideration of the Board; and its Budget. Diversification & Enterprise Risk principles that facilitate the
Five meetings of the Audit the board;
Management Committee: identification, measurement,
Committee were held during k. Evaluate the candidates and b. Farm-in and Farm-out
d. Recommending to the Board monitoring and control of risks.
the financial year 2018-19. The opportunities including Role
of Directors the selection, make recommendation for the
attendance of the directors in the acquisition of working interest The role of Diversification and b. Delineate Company’s overall risk
evaluation, compensation appointment of senior staff in
meetings was as under: in a new block, acquisition of Enterprise Risk Management appetite and tolerance level in
(including retirement benefits), Group 26 and above. For this
additional working interest in an Committee is to evaluate and discuss relation to risks.
Meetings and succession planning of the particular function, the Managing
Director Attended existing block, partial or complete the feasibilities of new projects to
CEO; Director will be co-opted c. Ensure that Company’s overall
divestment of working interest in ensure growth and diversification
Ms. Ayla Majid 00 member of the Committee. The risk exposure is maintained at
e. Recommending to the Board of the Company’s business. The
Committee may also co-opt any an existing block. prudent levels and consistent
Mr. Adnan Afridi 02 of Directors the selection, Committee also assists the Board in
Mr. Rehan Laiq 03 other director for this purpose; c. Relinquishment/surrender of with the Company’s strategy.
evaluation, development, fulfilling Board’s responsibilities with
Mr. Qaiser Javed 02 and working interest in an existing
compensation (including regard to the risk management and d. Evaluate annually the adequacy
Mr. Shahid Yousaf 05 retirement benefits) of the Chief block. amongst other things, responsible for of the risk management function,
l. Take up any matter assigned
Mr. Ahmed Hayat Lak 05 Operating Officer, Chief Financial ensuring the adequacy, robustness including the background and
by the Board and make its d. Acquisition or disposal of plant,
Mr. Manzoor Ahmed 03 Officer, Company Secretary and and effectiveness of risk management experience of key senior risk
recommendations to the Board machinery and equipment
Head of Internal Audit; thereon. pertaining to the Company’s core policies and processes. officers, staffing adequacy, and
the independence and authority Company’s Annual and Interim Audit Committee on Appointment of approach to evaluating and improving
of the risk management function. Financial Statements, including External Auditors the effectiveness of risk management,
non-financial information, prior Every year, the Audit Committee control, and governance processes.
e. Review periodic reports related
to publication. Audit Committee makes its recommendations to the
to management’s assessment of
periodically reviewed the adequacy Board regarding the appointment Objectives of ‘Internal Control
the Company’s risk management
and appropriateness of internal of external auditors and their fee. Framework’ are:
performance, and any other tools
control, matters relating to The recommendations are based on Effectiveness and efficiency of
or reports used by management a.
accounting policies, financial risks performance of the Auditor, satisfactory operations;
to assess and discuss the
and compliance with accounting rating under QCR programme of ICAP,
categories of risk faced by b. Reliability of internal/external
standards, statutory and legal and their eligibility to be re-appointed
the Company, the exposures reporting;
requirements and regulations. The (including length of their term with the
in each category, significant
Audit Committee discussed with Company). c. Compliance with laws, rules and
concentrations within those risk
external auditors the issues arising regulations; and
categories, the metrics used
from interim and annual audits The Audit Committee in its meeting held
to monitor the exposures, and d. Safeguarding of the Company’s
along with the Management Letter on July 25, 2019, recommended M/s
management’s views on the assets.
issued by External Auditors and A.F Ferguson & Co., for appointment
acceptable and appropriate levels
management responses thereof. as external auditors of the Company
of those risk exposures. To achieve Internal Control Framework
Important findings, risks identified for FY 2019-20 in place of M/s Deloitte Internal Control Framework in Engagement with Shareholders
f. Review the Company’s ERM and follow-up actions were objectives, following Internal Control
Yousuf Adil, Chartered Accountants who place.
Strategy and ERM Policy to examined thoroughly in order to components are assessed and O Relationships with the
will be retiring at the conclusion of the
ensure their suitability, including allow appropriate measures to be evaluated by the Internal Audit In addition, Internal Audit also shareholders are managed in
upcoming Annual General Meeting, after
adherence to relevant legislation taken. Department: undertakes special tasks as and when line with the provisions of the
completing three terms as auditors of
and regulations. the Company. M/s A.F Ferguson & Co. directed by the Audit Committee Shareholders and Participation
a. Control Environment: It sets the Agreement, applicable corporate
Composition have been recommended based on of the Board. Internal Audit plays a
g. Ensure that the risk management audit control tone of the Company laws/rules/regulations/
their market reputation, professional central role in highlighting weaknesses
function has adequate resources Director Designation and influences the control notifications, notably the
excellence and competitive fee quote. in the existing system and processes
and has a well-defined Annual consciousness of personnel. It Companies Act, 2017, Listed
Ms. Ayla Majid 1 & 2 President and identifying implementation
Risk Management Plan. is the foundation of all other Companies (Code of Corporate
Mr. Rehan Laiq 2 Member of effective controls needed to
Presence of President components of Internal Control Governance) Regulations, 2017,
Mr. Shahid Yousaf Member strengthen the overall control system.
h. Review key projects of strategic Audit Committee in AGM providing discipline and structure.
Mr. Ahmed Hayat Lak Member Listing Regulations of PSX, and
nature from risk perspective. The President Audit Committee remains
Mr. Adnan Afridi Member b. Risk Assessment: Management Access of Head of Internal Audit to the Memorandum and Articles of
i. Review Audit or other findings present in each AGM to answer the of Company is responsible Association of the Company.
Audit Committee
relating to management of the
1. Ms. Ayla Majid is an independent, non- questions pertaining to the Committee’s for ensuring adequate risk
executive director. Head of the Internal Audit has direct,
Company’s risks and that follow- activities during the year and other identification and analysis of O Annual and Quarterly Accounts
2. Ms. Ayla Majid and Mr. Rehan Laiq both
unrestricted access to the President
up actions are undertaken by the important matters which fall within the relevant risks to achieve Internal of the Company are placed on
qualify as financially literate. and other Members of the Audit
Management. scope of the Committee’s mandate. Control Framework objectives. the Company’s Website while
Committee to discuss any matter
related to internal audit function. Annual Audited Accounts are also
Audit Committee Views on c. Control Activities: These are
j. Evaluate special cases Internal Control Framework and Role circulated to the Shareholders in
Financial Statements the policies and procedures that
where a risk (or risks) fall of Internal Audit physical form.
The financial statements of the help ensure that Management STAKEHOLDERS’ ENGAGEMENT
outside published guidelines In Compliance with the requirements of
Company for FY 2018-19 were directives are carried out Major stakeholders of the Company
and thresholds and make O Besides their right to appoint
presented to the Audit Committee Listed Companies (Code of Corporate include Shareholders (Institutional
recommendations on appropriate effectively. directors to oversee affairs of the
in its meeting held on July 25, 2019. Governance) Regulations, 2017, the and Minority), Customers, Suppliers,
action to the Board. d. Information and Company, the Shareholders are
The Audit Committee reported to Board of Directors has set up Internal Joint Venture Partners, Regulators,
Communication: Pertinent invited to all the shareholders
the Board that the statements are Audit function, which is headed by Head Banks and other Lenders, Media,
information must be identified, meetings (AGMs, EOGMs) and
Attendance in the Diversification fair, balanced and understandable. Internal Audit who reports to the Audit Employees, and Communities in MPCL
captured and communicated in a are encouraged to present their
& Enterprise Risk Management The statements provide the Committee of the Board. Concession areas. Relationships with
structured form and time-frame viewpoint on important matters.
Committee Meetings shareholders and other readers with different stakeholders are extremely
The Committee was constituted in detailed qualitative and quantitative Internal Audit Function is an that enables people to carry out important for the Company as these O There is an Investor Relations
July 2019. information which they can use independent assurance and consulting their responsibilities. relationships can impact MPCL’s Section on the Company’s website
to assess the Company’s current activity and is designed to add value e. Monitoring: Internal Control operations, revenues, corporate which contains important Investor
Reports of the Audit Committee position and performance, business and improve MPCL’s operations. It helps Systems need to be monitored by image and profile. MPCL maintains specific information as well as
In accordance with its TORs, the model and strategies as well as the the Company accomplish its objectives Internal Audit Department. This cordial relationships with all of its an Online Complaint Form for
Audit Committee reviewed the Company’s future prospects. by bringing a systematic, disciplined process assesses the quality of stakeholders. investors.
are nominees of/represent the The Board has approved a SHARE PRICE SENSITIVITY
major shareholders. Hence, these Whistleblower Policy to encourage ANALYSIS
non-executive directors are well employees, who have concerns about Investor Relations Section on
aware of the views of the major suspected serious misconduct or any the Company’s website contains
shareholders about the Company breach or suspected breach of law or important information such as
and adequately share those regulation that may adversely impact Share Price (along with turnover,
views with other directors and the Company, to come forward and market capitalization and graphical
management of the Company during express such concerns without fear of representation of share price
Board meetings. punishment or unfair treatment. movement over the period),
Financial Highlights and Indicators,
Engagement with Regulators
An independent Internal Audit Pattern of Shareholders, EPS, P/E
O Relationship with SECP and
Department periodically reviews Ratio and Breakup Value etc.
PSX are managed as per
the conduct of business of each
applicable corporate laws/
department and points out the areas The information is compiled and
rules/regulations/notifications,
for improvement, if any. provided by Business Recorder
Corporate Briefing Session notably the Companies Act,
under an arrangement with the
2017, Listed Companies (Code
CONFLICT OF INTEREST Company.
O The Board has approved an collaborative working relationship is made by the Chairman on the of Corporate Governance)
The matter of Conflict of Interest
Investor Relations & Grievance with them. The Company treats Company’s performance during Regulations, 2017, Listing
relating to Board members is dealt All the material information which
Policy which contains the its suppliers as strategic business the year and its future plans. The Regulations of PSX, and the
with in accordance with the provisions might affect the share price of the
mechanism for handling partners for sustainable (reliable, presentation is followed by Q&A Memorandum and Articles of
of the Companies Act, 2017 and the Company is communicated to the
shareholders' complaints and ethical, cost effective) sourcing. session wherein the views of the Association of the Company.
Articles of Association of the Company. PSX and SECP in a timely manner.
queries. minority shareholders are solicited, O Annual and Quarterly Accounts Any person intending to become a
O Minority investors can also lodge Media: A dedicated team of their concerns are addressed and of the Company are filed with Director of the Company has to submit
professionals maintains liaison suggestions are noted for suitable LAST ANNUAL GENERAL
their complaints and submit their the Registrar of the Companies a declaration that he/she is aware of MEETING (AGM)
queries directly to the Shares with print and electronic media action. and SECP and are also the powers and duties of a Director
for sustained positive coverage 34th AGM of the Company was
Department using conventional circulated to PSX. as envisaged in the Companies Act, held on October 18, 2018, at 10:00
mail, fax, email or phone. of the Company’s activities and Reaching out to Shareholders for 2017 and has read the Articles of
achievements through new items, O Material Information pertaining a.m., at the Registered Office of the
Delivery of Unclaimed Dividends/ Association of the Company.
O Material Information pertaining interviews, articles in special to the Company’s operations is Company situated at 21-Mauve Area,
Shares
to the Company’s operations is supplements, and advertisements. circulated to the PSX and SECP 3rd Road, Sector G-10/4, Islamabad.
Pursuant to Section 244 of Companies Further, MPCL has a Code of Ethics
circulated to PSX, SECP and the as and when need arises.
Act, 2017, the Company is vigorously which, among others, covers this
Shareholders as and when need O The Company also participates Agenda, Decisions and
Corporate Briefing Session reaching out to its shareholders to area. It is overriding intention of the
arises. in trainings and awareness Implementation
A Corporate Briefing Session deliver unclaimed shares/dividends Company that all business transitions
was arranged by the Company that have been lying pending with the seminars arranged by PSX and conducted by it are on arm’s length Agenda Item-1: To receive, consider
Engagement with other SECP from time to time.
on June 11, 2019 at MPCL Head Company since inception. In addition basis. Adequate internal controls and adopt audited accounts of the
Stakeholders
Office. The Briefing was attended to a number of attempts to contact have been implemented to ensure Company for the year ended June
Customers: Our customers are by shareholders, analysts, fund concerned shareholders in person, BUSINESS ETHICS that transactions with related parties 30, 2018 together with the directors'
mostly corporate entities in dedicated managers and PSX officials. During five written reminders have been MPCL conducts its business in a are appropriately identified in the and auditors’ reports thereon.
sectors of fertiliser, power and the briefing, the participants were given since 2016. As a result, the socially responsible and ethical information system and disclosed in
gas distribution with long term apprised about the Company’s Company has delivered about 32,619 manner and in compliance with the financial statements. Decision and Implementation:
allocations. Our interaction with operational and financial performance unclaimed shares, and dividends applicable laws. The Company has A detailed presentation on the
these customers is B2B in nature. and future plans. The briefing amounting Rs. 32.8 million in the last prepared a Code of Ethics and Related Party Transactions are Company’s operations during the
The Company maintains constant was followed by a Q&A session three years. Business Practices which, inter alia, reviewed and approved by the Board. FY 2017-18 and future plans of
contact with all of its customers during which participants’ queries covers the matters such as conflict Interested directors are required to the Company was made by the
through periodic meetings (TCMs/ were satisfactorily replied by the Understanding of Major of interest, business integrity, disclose their interest and they are not Chairman. After Q&A session, the
OCMs), official correspondences, and Management. The participants highly Shareholders’ Views gifts, entertainment and bribery, allowed to participate in the voting audited accounts, directors’ and
personal visits. appreciated the content and conduct Major shareholders of the Company insider trading and accountability on any transaction in which they are auditors’ reports were duly approved
of the Briefing. are Fauji Foundation, OGDCL and etc. Members of the Board and interested. and adopted by the members.
Suppliers: MPCL segments its Government of Pakistan who employees, while joining and during Thereafter, audited accounts,
suppliers, and then employs an Briefing to the Shareholders collectively hold 80% shares in the their tenure with the Company, are Similarly, MPCL executives are directors’ and auditors’ reports were
appropriate interaction model During the Annual General Meeting Company. Out of 13 non-executive required to read, acknowledge and required to disclose buying and selling filed with the Registrar of Companies
for each segment to maintain a every year, a detailed presentation directors on MPCL Board, 11 directors abide by the Code. of the Company shares. and circulated to SECP and PSX.
Agenda Item-2: To approve payment Accordingly, shares certificates were COMPLIANCE WITH THE BEST ensures transparency in hiring, in-house session on February 27, regular/contractual Management
of final dividend @ Rs.2.50 (25%) per dispatched/credited into CDC accounts PRACTICES OF CODE OF promotion and separation of 2019 at Head Office, Islamabad. and Non-Management employees
share for the year ended June 30, 2018. of the Shareholders on October 24, CORPORATE GOVERNANCE senior management. Management employees from all of the Company, vendors,
2018. The Company has ensured full tiers participated in the session contractors, customers and
Decision and Implementation: compliance with the Listed Companies O To ensure a system of fair play wherein they were apprised about consultants etc. The Policy
Payment of dividend as recommended FACILITATION TO MINORITY (Code of Corporate Governance) and justice for management the main concepts pertaining to also includes other personnel
by the Board was approved by the SHAREHOLDERS TO ATTEND AGMS Regulations, 2017. The Statement of employees, the Company insider trading, laws governing associated in any other manner
Shareholders. It was also approved Both the companies and the Compliance prepared by the Board has established a Grievance insider trading, responsibilities of the with the Company. Pursuant
that the dividend on 5% bonus shareholders have to play a role to of Directors has been reviewed and Redressal Committee which companies with regard to handling to the Policy, the Management
shares which were sub judice before make AGMs effective and meaningful. verified by the external auditors of listens to individual work related material insider information and has formed a ‘Whistleblowing
Sindh High Court be withheld by the MPCL follows the legal requirements the Company. The Statement for complaints on behalf of the maintenance of inside information Committee’, headed by General
Company till the final decision of in letter and spirit to encourage the year 2018-19 (included in the Managing Director. An aggrieved register, penalties for non- Manager Corporate Affairs
the Court in the matter. Accordingly, participation of minority shareholders Annual Report) details the manner management employee may compliance, real life case studies, for handling and managing all
dividend warrants were dispatched to in AGMs. Going beyond the legal in which the Company has applied approach the said Committee and inside information register of whistleblowing concerns and
the Shareholders on October 24, 2018. requirements, the Company even the requirements of the Regulations. after exhausting all his/her MPCL etc. Such session will be complaints. Disciplinary action
Tax was deducted at the applicable delivers Annual Reports through The Statement also confirms that all options within the department. arranged on regular basis in future. (which may include dismissal)
rates and deposited in the Government Company’s dispatch rider to those material principles enshrined in the The above mechanism is against the wrongdoer is taken
Treasury. shareholders who do not receive them Regulations have been complied with. in addition to the regular WHISTLE BLOWER POLICY depending on the results of the
through courier. Personal phone calls mechanism that is overseen by The Board has approved a Whistle investigation conducted by the
Agenda Item-3: Appointment of are also made to a few shareholders to GOOD GOVERNANCE PRACTICE HR Department. Blower Policy to encourage Committee.
auditors for the year ending June 30, inform them about the AGM and invite BEYOND THE REQUIREMENTS OF employees, who have concerns
2019 and to fix their remuneration. them to attend in person or through THE REGULATIONS SESSION ON INSIDER TRADING about suspected serious misconduct During the year, no complaint was
proxy. Dedicated parking and security Going beyond the requirements of Insider Trading is a serious offence or any breach or suspected breach of lodged under the Whistleblowing
Decision and Implementation: arrangements are made for the the Regulations, the Company has under the Securities Act, 2015 and law or regulation that may adversely Policy.
M/s Deloitte Yousuf Adil, Chartered Shareholders on the day of AGM. adopted/implemented following good carries hefty financial penalties and impact the Company, to come
Accountants, were appointed as governance practices in the Company. jail time. In order to create awareness forward and express such concerns INVESTORS' GRIEVANCES POLICY
auditors to hold office until the ANTI-CORRUPTION MEASURES about insider trading and related without fear of punishment or unfair The Board has approved an
conclusion of the next Annual General MPCL conducts its business in a O As of June 30, 2019, 10 out of 13 matters, the Company arranged an treatment. The Policy applies to all Investor Relations & Grievance
Meeting of the Company for the year socially responsible and ethical (77%) directors on MPCL Board
ending June 30, 2019 at the fee agreed manner and in compliance with along with two HODs and one
by the Board of Directors. applicable laws. The Company has female executive were certified
prepared a Code of Ethics and under directors’ mandatory
Agenda Item-4: To approve the issue Business Practices which, inter alia, training programme. MPCL is
of bonus shares in the ratio of one covers the matters such as conflict well ahead of the timelines as
share for every ten shares held (i.e. of interest, business integrity, gifts, far as requirements of the Code
10%). entertainment and bribery, insider pertaining to mandatory training
trading and accountability etc. of Directors, HODs and female
Decision and Implementation: Members of the Board and employees, executives is concerned.
Issuance of bonus shares as while joining and during their tenure
recommended by the Board was with the Company, are required to O Although not mandatory under
approved by the Shareholders. It was read, acknowledge, and abide by the the Regulations, the Board has
also approved that the fractional Code. constituted a Diversification
entitlement of the Members shall be & ERM Committee to review
consolidated into whole shares and The Board has approved a all matters pertaining to
sold in the Stock Exchange. The sale Whistleblower Policy to encourage diversification projects and
proceeds thereof shall be donated employees and other parties dealing enterprise risk management and
as deemed appropriate by the Board. with the Company, who have concerns make recommendations to the
It was also approved that the bonus about suspected serious misconduct Board.
shares to be issued against 5% bonus or any breach or suspected breach of
shares which were sub judice before law or regulation that may adversely O All employment in MPCL Grade
Sindh High Court be withheld by the impact the Company, to come forward 26 and above is approved by the
Company till the final decision of the and express such concerns without Board on recommendations of
Court in the matter. fear of punishment or unfair treatment. HR&R Committee. This practice
Briefing to Board Members at Miraj-1 Drilling Site
Policy which contains the Mechanism for Board’s Committees’ than 1, then there is unanimity in Board’s Performance Evaluation by
mechanism for handling Evaluation was approved by MPCL board opinion. If the value is more External Consultant Company's Ownership and
shareholders' complaints and Board in its Meeting held on than 1, the opinion of Board is Evaluation of the Board, Committees Relationship with Associated Companies
queries. As envisaged in the April 16, 2018. Committees’ Self dispersed against that performance and Individual Directors is a significant
Policy, the Company has a Evaluation Template consists of 15 factor. end-of-the-year activity. After weighing
designated email ID as well as Performance Factors pertaining to the pros and cons of different
an online Complaint Form at its the Composition of the Committee, Results of Evaluation evaluation methods, the Company has MPCL
website for the Shareholders to Mandate and Functioning of the for FY 2018-19 adopted Self Evaluation Methodology
lodge a complaint or query with Committee, Role of Committee’s In line with clause 29(3)(ii) of the for the Board. However, the Company
the Management. Shareholders Chairman, General Atmosphere and Regulations and approved TORs may engage the services of an external
can also lodge a complaint or Contribution of Committee Members. of HR&R Committee, the results consultant in future for improving
query using telephone, fax or of evaluations of the Board, the evaluation mechanism and/or Govt. Fauji General
of Pakistan OGDCL Foundation Public
conventional mail. The Policy Mechanism for Individual Directors Committees and Individual Directors conducting the evaluation for more 18.39% 20% 40% 21.61%
ensures that grievances notified by Evaluation was approved by MPCL for the Year 2018-19 were first objective results.
the shareholders are handled and Board in its Meeting held on May presented to the HR&R Committee
resolved efficiently at appropriate 31, 2018. Individual Director’s in its meeting held on July 25, 2019, Investors’ Relations Section and
level within shortest possible time Self Evaluation Template consists and then to the Board in its 178th Complete Accessibility of Annual Common Common
Directorship/ Directorship/
span (within 5 working days). The of 24 Performance Factors meeting held on July 30, 2019. Report on MPCL Website Associate Associate
Company maintains record of all which provide Directors with an In order to promote investor relations
such grievances along with actions opportunity to reflect upon their own The evaluations for the year 2018- and facilitate access to the Company
taken for resolution and prepares competencies, their role, behavior, 19 revealed that the performance for grievance/other query registration,
1. Askari Bank Limited
summary of unresolved/unsettled contributions and performance as of the Board, Committees and an ‘Investors’ Relations’ section is also
1. PSO 2. Askari Cement Company
issues on monthly basis. Members of the Board. Individual Directors was satisfactory maintained on MPCL website. Further,
and the opinion of the directors annual report is also completely 3. Fauji Cement Company Limited
Annual Evaluation of the In addition to the Identified Factors, was unanimous except on following accessible on the website. Website of 4. Fauji Fertilizer Bin Qasim Limited
Performance of the Board, Directors can also provide their two parameters in the Board’s MPCL is www.mpcl.com.pk. 5. Fauji Fertilizer Company Limited
Board’s Committees and subjective comments in the evaluation: 6. Fauji Food Limited
Individual Directors along with Comments Section of the Templates. Board Meetings
7. Fauji Fresh & Freeze Limited
Description of Criteria used a) Proportion among independent held outside Pakistan
8. Fauji Infraavest Foods Limited
In line with the requirements Board Evaluation Template and directors and non-independent No Board meeting was held outside
8. Fauji Kabirwala Power Company
of clause 10(3)(iv) of Listed Individual Director’s Template are directors. Pakistan during the year.
Companies (Code of Corporate forwarded to all Board Members, 10. Fauji Meat Limited
Governance) Regulations, 2017, a while Committees Evaluation b) Representation from minority Date of Authorisation 11. Fauji Oil Terminal & Distribution
formal and effective mechanism Template is forwarded to Members shareholders on the board. of Financial Statements 12. Fauji Trans Terminal Limited
is in place for annual evaluation of the respective Committees. The In order to timely communicate 13. FFBL Power Company Limited
of the Board’s own performance, Directors are requested to rate The Management clarified that financial results to the stakeholders, 14. FFC Energy Limited
Members of the Board and of each Factor on a scale of 1 to 5. The the Company has obtained a annual financial statements of the
15. Foundation Wind Energy I & II
Board’s Committees. scores are consolidated through a Relaxation from SECP regarding Company were approved by the Board
16. Pakistan Maroc Phosphore, SA
specially designed programme and number of independent directors till in its 178th meeting held on July 30,
Mechanism for Board’s Self Mean Value, Standard Deviation reconstitution of the Board in 2022. 2019. Necessary disclosures to PSX
Evaluation was approved by MPCL and Bar Charts for each factor are Hence, the issue of independent and SECP were made on the same day
Board in its Meeting held on calculated. directors will be duly addressed at after conclusion of the Board meeting.
September 30, 2014. The approved that time. Similarly, currently there
Board Performance Evaluation As per the methodology, if the mean are two directors on the Board Reports of the
Template contains 36 Performance value against any performance factor representing minority shareholders. Shariah Advisory Board
Factors covering areas such as is less than 3, it needs improvement. The Company is not required to have
Composition of the Board and If the mean value is above 3, the The Management also provided a Shariah Advisory Board. However,
its Committees, Functions and performance Factor is acceptable. para-wise replies to the Directors’ the Company is included in PSX KMI,
Performance of the Board and its Further, the standard deviation specific comments and noted All Share Index and KMI 30 Index
Committees, Governance Structure indicates the degree of dispersion Directors’ suggestions for which track the performance of
and Practices, and Company in the opinion of Board Members implementation/compliance mainly shariah compliant companies listed on
Performance Monitoring System. against any specific factor. If the pertaining to Directors’ training, Pakistan Stock Exchange.
value of standard deviation is less orientation and field visits.
M a r i P e t r o l e u m C o m p a n y L i m i t e d 102 Block 28
103 A n n u a l R e p o r t 2 0 1 9
MPCL’s Operated Blocks MPCL’s Non-Operated Blocks

AND DEVELOPMENT & PRODUCTION (D&P) LEASES AND D&P LEASES
95% O MPCL
05% O OGDCL
Mari Wali West Block Taung Block Adam X

(D&P Lease) Operator: PPL (D&P Lease)
100% O MPCL 100% O MPCL 60% O MPCL 35% O MPCL

40% O POL 65% O PPL
Sujawal Ziarat Block Sukkur Block Adam West Hala Block

(D&P Lease) Operator: PPL (D&P Lease) Operator: PPL
100% O MPCL 60% O MPCL 100% O MPCL 35% O MPCL 35% O MPCL
40% O PPL EUROPE 65% O PPL 65% O PPL
Zarghun South Karak Block Ghauri Block Fazl Kohlu Block Shah Bandar Block
(D&P Lease) Operator: PPL (D&P Lease) Operator: OGDCL Operator: PPL
35% O MPCL 60% O MPCL 65% O MPCL 35% O MPCL 30% O MPCL 32.0% O MPCL
40% O SPUD 40% O MOL 35% O PPL 65% O PPL 30% O OPL 63.0% O PPL
7.50% O AL-HAJ 40% O OGDCL 2.5% O GHPL
17.50% O GHPL 2.5% O SEHPL
Koonj Bannu West Block Harnai Block Kohat Block Kalchas Block
(D&P Lease) Operator: OGDCL Operator: OGDCL
100% O MPCL 55% O MPCL 60% O MPCL 33.33% O MPCL 50% O MPCL
35% O OGDCL 40% O PPL EUROPE 16.67% O SEL 50% O OGDCL
10% O ZPCPL 50% O OGDCL
Sujjal Sujawal Block Peshawar East Block Bela West Block

(D&P Lease) Operator: PPL
100% O MPCL 100% O MPCL 98.19% O MPCL 25.0% O MPCL

1.81% O KPOCGL 2.50% O GHPL
37.5% O PPL
35% O KUFPEC
Performance Indicators
2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 RATIO ANALYSIS
PROFITABILITY RATIOS Profitability Ratios liabilities ratio improved to 0.19 to the last year, due to higher profit
Operating profit to net sales % 56.76 49.58 41.58 31.29 40.37 31.36 There is a healthy growth in the times compared to 0.16 times of last retention.
Net profit to net sales % 40.92 37.80 32.43 27.87 29.16 26.50 net profit from Rs 15,374 million year on account of increase in cash
EBITDA margin to net sales % 64.90 60.10 49.77 39.83 49.75 40.97 in the previous year to Rs. 24,327 and cash equivalents. Capital Structure Ratios
Operating leverage Times 1.51 1.69 2.27 (1.20) 1.94 1.06 million. Increase in net sales, other There is no long-term financing of
Return on equity % 46.87 46.78 42.99 42.52 39.91 25.96 income and finance income were Activity / Turnover Ratios the Company at the year-end and
Return on capital employed % 46.87 44.06 39.15 31.47 36.19 25.42 the major reasons for increase in No. of days in receivables increased resultantly, these ratios are not
profitability which was partially during the year as average trade applicable for the current year.
LIQUIDITY RATIOS offset by increase in royalty, debts increased because of increase
Current ratio Times 1.25 1.19 1.16 0.93 1.06 1.08 operating expenses, exploration in GIDC, which is sub judice, in the Number of Days in
Quick / acid test ratio Times 1.24 1.18 1.14 0.87 1.02 1.06 and prospecting expenditure, other apex courts resulting in reduction in Receivables
Cash to current liabilities Times 0.19 0.16 0.12 0.02 0.12 0.14 charges, finance cost and provision debtor turnover. (Days)
Cash flow from operations to net sales Times 0.34 0.50 0.25 0.58 0.34 0.41 for taxation. This has resulted in
379
ACTIVITY / TURNOVER RATIOS improved profitability ratios as Investment / Market Ratios
Debtor turnover Times 0.96 1.34 2.38 3.21 2.78 3.27 compared to last year. Earnings per share stood at Rs.
273
Total assets turnover Times 0.33 0.34 0.37 0.35 0.31 0.32 200.59 per share for the year ended
Liquidity Ratios June 30, 2019 registering an increase
Fixed assets turnover Times 1.88 1.51 1.12 0.96 1.01 1.03
Current ratio and quick ratio showed of 58% compared to last year on
153
No. of days in receivables Days 379 273 153 114 131 111
131
114
111
an improvement compared to account of increase in profitability.
INVESTMENT / MARKET RATIOS last year mainly due to increase Breakup value of the Company
Earnings per share (EPS) - basic and diluted Rupees 200.59 126.77 82.87 54.89 51.25 35.77 in trade debts and cash and cash improved to Rs 524.48 per share,
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
Distributable earnings per share Rupees 6.27 5.85 5.91 5.55 4.82 5.25 equivalents. Cash to current around 44% higher as compared
Price earnings - on the basis of
earnings per share Times 5.03 11.88 19.01 16.55 9.14 10.44
Price earnings - on the basis of Profitability Ratios Liquidity Ratios Activity / Turnover Ratios
(Percentage) (Times) (Times)
distributable earnings per share Times 160.98 257.47 266.61 163.64 97.22 71.13 80 1.5 3.5
70 3.0
Price to book ratio Ratio 1.92 4.13 6.80 5.90 4.49 2.04 60
1.2
2.5
Dividend yield % 0.59 0.40 0.33 0.56 1.11 1.01 50 0.9 2.0
40
Dividend payout % 95.69 102.56 87.99 91.89 108.32 72.08 0.6 1.5
30
Dividend cover - on the basis of 20 1.0
0.3
earnings per share Times 33.43 21.13 15.94 10.76 9.82 9.45 10 0.5
0 0.0 0.0
Dividend cover - on the basis of 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
distributable earnings per share Times 1.05 0.98 1.14 1.09 0.92 1.39 O Net profit to net sales O Current ratio O Debtor turnover
O EBITDA margin to net sales O Quick / acid test ratio O Total assets turnover
Dividend per share Rupees 6.00 * 6.00 5.20 5.10 5.22 3.78 O Return on equity O Cash to current liabilities O Fixed assets turnover
Stock dividend per share % 10 - - - 20 - O Return on capital employed O Cash flow from operations to net sales
Market value per share

Year end Rupees 1,009.33 1,506.18 1,575.64 908.22 468.60 373.43 Investment / Market Ratios
highest during the year Rupees 1,589.95 1,809.41 1,750.00 982.48 764.32 391.40
Earnings Per Share (Eps) - Distributable Market Value
lowest during the year Rupees 936.70 1,398.38 905.10 363.18 351.14 136.97 Basic & Diluted Earnings Per Share Per Share at Year End
Breakup value per share Rupees 524.48 364.55 231.63 153.89 104.27 183.10 (Rupees) (Rupees) (Rupees)
CAPITAL STRUCTURE RATIOS

Debt to equity % 00 : 100 00 : 100 14.04 : 85.96 5.57 : 94.43 44.69 : 55.31 1.94 : 98.06
200.59
1,575.64
6.27
1,506.18
5.91
Financial leverage Times - - 0.20 0.07 0.95 0.10

5.85
5.55
5.25
Interest cover Times - 764.79 57.42 144.08 6.39 29.03

4.82
126.77
1,009.33
Weighted average cost of debt % - 6.09 6.00 6.99 10.38 10.28 908.22
82.87
Note: Breakup value with revaluation reserves does not apply as MPCL has no revaluation reserves.
468.60
54.89
51.25
2013-14 373.43
2013-14 35.77
Previous year figures have been restated wherever necessary for the purpose of comparison.
2014-15
2015-16
2016-17
2017-18
2018-19
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2014-15
2015-16
2016-17
2017-18
2018-19
* This includes final dividend of 20% for the year ended June 30, 2019, proposed by the Board of Directors for approval by the
members in Annual General Meeting to be held on October 22, 2019.
Variation in Results Return on Equity

OF INTERIM REPORTS WITH THE FINAL ACCOUNTS
First Quarter Second Quarter Third Quarter Fourth Quarter Total for the
ended September 30, ended December 31, ended March 31, ended June 30, year ended
2018 2018 2019 2019 June 30, 2019
(Rupees in thousand)
Profit or Loss items

Gross sales 27,128,905 30,985,972 28,878,858 30,548,368 117,542,103
Net sales 14,341,117 14,645,507 14,520,533 15,940,850 59,448,007
Profit before taxation 7,701,760 8,733,668 7,964,858 10,308,048 34,708,334
Profit for the year 5,142,236 5,915,886 5,751,209 7,517,757 24,327,088
EPS - Restated 42.40 48.78 47.43 61.98 200.59
Analysis:
Slight decline in sales and profitability was witnessed in the third quarter due to lower gas withdrawals by the fertiliser
customers on account of their annual turnarounds/plant maintenance activities. The impact of lower withdrawal was offset
2018-19
by upward revision of sale prices by the Government.
Return
on Equity
46.87%
Profit Margin
x 40.92%
=
LLeverage
everage
x 3.51 Times
Tim
Total Assets
Turnover
QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4 0.33 Times
67,190
GAS GAS
66,157
GAS
60,129
GAS
63,661 2017-18
(MMSCF) (MMSCF) (MMSCF) (MMSCF)
CRUDE OIL CRUDE OIL CRUDE OIL CRUDE OIL

89,663 64,331 68,898 71,550
(Barrels)
(Barrels) (Barrels) (Barrels)
CONDENSATE CONDENSATE CONDENSATE CONDENSATE Return

on Equity
29,579
(Barrels)
24,725
(Barrels)
28,717
(Barrels)
27,592
(Barrels)
46.78%
Profit Margin
EARNINGS PER SHARE EARNINGS PER SHARE EARNINGS PER SHARE EARNINGS PER SHARE
x 37.80%
=
42.40 48.78 47.43 61.98

LLeverage
everage
x
(Rupees) (Rupees) (Rupees) (Rupees)
3.62 Times
Tim
Gross Sales Net Sales Profit Before Taxation Profit for the Year Total Assets
Turnover
0.34 Times
Analysis
Profit margin in 2018-19 slightly increased whereas asset efficiency remains
23.08% O First Quarter 24.12% O First Quarter 22.19% O First Quarter 21.14% O First Quarter almost the same. Equity multiplier decreased due to enhanced unappropriated
26.36% O Second Quarter 24.64% O Second Quarter 25.16% O Second Quarter 24.32% O Second Quarter
O
profits during the year. Resultantly, the Return on Equity of the Company was
24.57% O Third Quarter 24.43% Third Quarter 22.95% O Third Quarter 23.64% O Third Quarter
25.99% O Fourth Quarter 26.81% O Fourth Quarter 29.70% O Fourth Quarter 30.90% O Fourth Quarter 46.87% compared to 46.78% reported in the previous year.
SUMMARY OF THE Related Parties

Statement of Cash Flows
2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
(Rupees in million)
Cash flows from operating activities 20,436.053 20,225.239 7,120.289 12,638.329 6,609.010 6,096.578
Cash flows from investing activities (8,051.536) (5,543.564) (4,081.586) (5,287.579) (5,393.894) (5,918.203)
Cash flows from financing activities (754.961) (5,903.205) 3,262.935 (11,625.231) (1,621.744) (1,379.671)
Increase/(Decrease) in cash and
cash equivalents 11,629.556 8,778.470 6,301.638 (4,274.481) (406.628) (1,201.296)
Cash and cash equivalents at
beginning of year 15,706.262 6,927.792 626.154 4,900.635 5,307.263 6,508.559
Cash and cash equivalents at
end of year 27,335.818 15,706.262 6,927.792 626.154 4,900.635 5,307.263
Direct Method Cash Flow

FOR THE YEAR ENDED JUNE 30, 2019
2019 2018
Cash flows from operating activities

Cash receipts from customers 64,734,687 59,354,356 Cash Flow Analysis
Cash paid to the Government for Government levies (25,346,338) (26,365,488) (Rupees in million)
25000
Cash paid to suppliers, employees and others (13,764,354) (10,415,830)
20000
Income tax paid (5,187,942) (2,347,799) 15000
10000
Cash provided by operating activities 20,436,053 20,225,239 5000 NAMES OF RELATED PARTIES
0
-5000
Cash flows from investing activities -10000
Name of Related Party Basis of relationship Percentage of Shareholding
-15000 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Property, plant and equipment (3,119,481) (2,182,761)
O Operating Activities
Fauji Foundation Entity with significant influence over the Company 40%
Development and production assets (2,413,957) (1,650,534) O Investing Activities OGDCL Entity with significant influence over the Company 20%
O Financing Activities
Exploration and evaluation assets (4,325,361) (2,424,676) Gratuity funds (Management and
Proceeds from disposal of property, Non-Management) Post employment benefit plan -
plant and equipment 171 32,688 Provident fund Post employment benefit plan -
Cash & Cash Equivalents
Interest received 1,807,092 681,719 At Year End Chief Executive and Directors Key management personnel -
Cash used in investing activities (8,051,536) (5,543,564) (Rupees in million)
ANY CONTRACT OR ARRANGEMENT WITH THE RELATED PARTY OTHER THAN IN THE ORDINARY
27,335.82
Cash flows from financing activities

COURSE OF BUSINESS
Redemption of preference shares and
Related party transactions neither deviate from the company’s normal business operations nor are they made on terms that
repayment of long term loans (3,390) (5,008,719)
15,706.26
deviate from market equivalent.

Finance cost paid (68) (270,939)
Dividends paid (751,503) (623,547)
6,927.79
5,307.26
4,900.64
Cash used in financing activities (754,961) (5,903,205) APPROVED POLICY FOR RELATED PARTY TRANSACTIONS INCLUDING POLICY FOR DISCLOSURE OF
INTEREST BY DIRECTORS IN THIS REGARD
Increase in cash and cash equivalents 11,629,556 8,778,470
626.15
There is an approved policy for related party transactions and all the related party transactions are reviewed and approved by
Cash and cash equivalents at beginning of year 15,706,262 6,927,792
the Board. Interested Directors are required to disclose their interest and they are not allowed to participate in the voting on
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
Cash and cash equivalents at end of year 27,335,818 15,706,262 any transaction in which they are interested.
Management’s
Responsibility
TOWARDS THE PREPARATION AND PRESENTATION
OF THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the accounting and reporting standards as applicable in
Pakistan and the requirements of the Companies Act, 2017 and for such internal control as
management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern.
COMPLIANCE OF
International Financial
Reporting Standards
(IFRS) ISSUED BY THE INTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB)
Financial statements have been prepared in accordance with the accounting and reporting standards as applicable in
Pakistan. The accounting and reporting standards applicable in Pakistan comprise of IFRS issued by the IASB as notified
under the Companies Act, 2017 and provisions of and directives issued under the Companies Act, 2017. Where provisions
of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and directives issued under
the Companies Act, 2017 have been followed. Mari Deep Central Processing facility - Daharki
Cash Flows and Significant Changes in

Financing Arrangements Financial Position
PERFORMANCE AND CASH FLOWS FROM THE PREVIOUS YEAR
Analysis of Liquidity capacity to arrange short term loan/ of losses, if any. Further, surplus FINANCIAL POSITION increased from Rs. 114.41 billion in the previous year. Increase in net
The Company remained sufficiently overdraft facility whenever required. funds are available for investments Shareholders’ Equity 2017-18 to Rs. 183.65 billion in 2018- sales, other income and finance
liquid during the year owing to to generate incremental liquidity / Shareholders’ equity comprising of 19, primarily on account of increase income were the major reasons for
timely billing and recovery of Financing Arrangements revenues for the Company. share capital and reserves witnessed in trade debts due to GIDC matter sub increase in profitability. This was
invoices from the customers, which Reliance on external financing is an increase of 58% from the last year, judice in the apex courts and short partially offset by increase in royalty,
resulted in increase in cash and cash secondary to internally generated due to increase in unappropriated term investments. operating expenses, exploration
equivalents at the year end. cash which represents the profit for the year. and prospecting expenditure, other
Company’s primary source of FINANCIAL PERFORMANCE charges, finance cost and provision
Analysis of Cash Flows working capital thereby minimising Non Current Liabilities Sales for taxation.
Cash and cash equivalents were financing costs through effective Non current liabilities increased Gross and net sales increased by 17%
Rs. 27,336 million as against Rs liquidity management. External mainly due to increase in provision for and 46% respectively mainly due to CASH FLOWS
15,706 million in the previous year. financing is arranged when required, decommissioning cost during the year. increase in sale prices. Cash and cash equivalents were
During the year, an amount of Rs. after extensive cash flow forecasting Rs 27,336 million as against Rs 15,706
20,436 million was generated from for working capital, investment or Current Liabilities Exploration and Prospecting million in the previous year. During
operating activities of the Company, capital expenditure requirements. Overall, current liabilities increased by Expenditure the year, an amount of Rs 20,436
which was used mainly to undertake
exploration and production activities, Repayment of Debts, Defaults
Contribution 52%. This is due to increase in trade
and other payables primarily due to
Exploration and prospecting
expenditure increased from Rs. 3.31
million was generated from operating
activities of the Company which was
capital expenditures and payment of
dividends.
In Repayments and Recovery of
Losses, if any to National increase in GIDC payable. billion in 2017-18 to Rs. 4.31 billion
in 2018-19. This increase is mainly
used mainly to undertake exploration
and development activities, capital
Exchequer
There is no external financing Non Current Assets due to increase in prospecting expenditures and payment of
Strategies to overcome of the Company. The Company Non current assets have increased expenditure of joint operations during dividends.
liquidity problem commands strong debt raising from Rs. 29.76 billion in 2017-18 to the year.
Even a short term liquidity problem capacity besides the ability to MPCL contributed around Rs. 36.41 billion in 2018-19, mainly
can quickly result in serious problem generate sufficient revenues from Rs 77,046 million to the due to increase in property, plant Finance Income
for any company. MPCL does not operating activities for operating Government exchequer during and equipment and exploration & Finance income has increased by
foresee any liquidity problem in the cash requirements. Liquid assets the year (Rs 70,409 million evaluation assets thus strengthening 131% from Rs. 766 million in 2017-18
year ahead. In the quest to evade including cash and bank balances, during 2017-18) mainly on the Company’s asset base. to Rs. 1,767 million in 2018-19 due to
any liquidity problem, the Company short term investments and trade account of gas development increase in cash and cash equivalents
bills its customers in a timely fashion debts, in addition to projected surcharge, gas infrastructure Current Assets and profit rates.
and follows up any unpaid invoices revenue / cash forecasts indicate development cess, sales tax, Current assets mainly comprise of
as soon as they become past due. availability of sufficient repayment excise duty, royalty, workers’ trade debts, short term investments Profit for the Year
The Company enjoys sound banking capacity, besides providing leverage and cash & bank balances. On an Profit for the year is Rs 24.33 billion
funds and income tax.
relationships and therefore has the to adequately manage recovery aggregate basis, current assets as compared to Rs 15.37 billion in
Horizontal Analysis
STATEMENT OF FINANCIAL POSITION
2019 19 vs 18 2018 18 vs 17 2017 17 vs 16 2016 16 vs 15 2015 15 vs 14 2014 14 vs 13
%age %age %age %age %age %age
EQUITY AND LIABILITIES

Share capital and reserves
Issued, subscribed and paid up capital 1,212,750 10.00 1,102,500 - 1,102,500 - 1,102,500 - 1,102,500 20.00 918,750 -
Undistributed percentage return reserve 602,415 (1.74) 613,109 23.50 496,436 16.30 426,867 7.98 395,331 (4.51) 414,014 (28.49)
Other reserves 13,190,001 8.20 12,190,001 8.94 11,190,001 4.68 10,690,001 7.30 9,962,850 73.57 5,739,995 12.40
Profit and loss account 48,601,563 84.89 26,286,128 106.19 12,748,733 168.59 4,746,555 13,256.66 35,537 (99.64) 9,749,472 40.23
63,606,729 58.26 40,191,738 57.38 25,537,670 50.52 16,965,923 47.58 11,496,218 (31.66) 16,822,231 24.09
Non current liabilities
Long term financing - - - 4,172,727 317.27 1,000,000 (89.24) 9,290,001 2,693.94 332,505 (78.45)
Deferred liabilities 10,057,962 26.48 7,952,336 6.26 7,483,812 13.79 6,576,575 20.25 5,468,973 16.00 4,714,598 23.48
10,057,962 26.48 7,952,336 (31.78) 11,656,539 53.85 7,576,575 (48.66) 14,758,974 192.42 5,047,103 (5.86)
Current liabilities
Trade and other payables 140,372,206 49.49 93,903,238 70.22 55,165,162 59.22 34,647,573 (4.38) 36,235,805 0.45 36,074,046 162.05
Unclaimed dividend 32,563 68.10 19,371 12.14 17,274 70.36 10,140 (1.87) 10,333 9.81 9,410 32.70
Unpaid dividend 7,544 (34.48) 11,514 31.84 8,733 (24.11) 11,508 (97.19) 410,241 338.53 93,550 (0.50)
Current maturity of long term financing - - - (100.00) 955,037 529.25 151,774 (90.70) 1,632,505 18.37 1,379,173 43.42
Interest accrued on long term financing - - - (100.00) 254,552 29.77 196,154 (82.32) 1,109,742 2,858.21 37,514 (10.76)
Provision for income tax 5,985,202 186.72 2,087,503 100.00 - - - - - - - (100.00)
146,397,515 52.46 96,021,626 70.25 56,400,758 61.07 35,017,149 (11.12) 39,398,626 4.80 37,593,693 146.12
220,062,206 52.65 144,165,700 54.03 93,594,967 57.14 59,559,647 (9.28) 65,653,818 10.41 59,463,027 73.91
ASSETS
Non current assets
Property, plant and equipment 16,176,231 21.93 13,266,282 4.55 12,688,670 15.11 11,023,452 12.78 9,774,533 12.71 8,671,909 48.02
Development and production assets 12,755,574 7.31 11,886,872 60.42 7,409,878 146.83 3,002,063 37.22 2,187,715 (39.59) 3,621,571 74.72
Exploration and evaluation assets 6,553,548 143.67 2,689,549 (54.96) 5,972,108 (40.78) 10,084,055 7.28 9,399,602 105.04 4,584,270 9.50
Long term loans and advances 39,755 12.27 35,411 9.86 32,233 19.08 27,069 32.11 20,489 168.78 7,623 3.01
Long term deposits and prepayments 230,999 267.31 62,890 141.87 26,002 72.15 15,104 41.97 10,639 (41.97) 18,335 31.12
Deferred income tax asset 651,147 (64.21) 1,819,166 (15.87) 2,162,308 (19.34) 2,680,622 12.03 2,392,765 23.95 1,930,387 22.12
36,407,254 22.34 29,760,170 5.19 28,291,199 5.44 26,832,365 12.81 23,785,743 26.29 18,834,095 37.27
CURRENT ASSETS
Stores and spares 2,349,391 250.11 671,051 (33.89) 1,015,000 (53.17) 2,167,328 26.16 1,717,945 105.73 835,055 1.76
Trade debts 148,939,878 56.29 95,294,994 75.09 54,426,085 102.42 26,887,469 (16.90) 32,355,308 3.82 31,165,789 162.37
Loans and advances 4,752,460 87.67 2,532,344 54.41 1,640,065 14.09 1,437,456 (18.11) 1,755,283 2.66 1,709,860 99.78
Short term investments 20,700,000 145.34 8,437,354 134.07 3,604,596 100.00 - - - - - -
Short term prepayments 92,919 39.28 66,714 1.55 65,697 (18.08) 80,193 (34.45) 122,341 119.03 55,857 (16.47)
Interest accrued 105,747 2.48 103,183 119.39 47,031 1,087.35 3,961 106.09 1,922 (67.00) 5,824 (79.74)
Other receivables 78,739 154.14 30,982 (22.11) 39,779 86.47 21,333 550.00 3,282 (99.64) 913,739 (192.01)
Income tax paid in advance - - - (100.00) 1,142,319 (24.02) 1,503,388 48.65 1,011,359 (59.13) 635,545 100.00
Cash and bank balances 6,635,818 (8.71) 7,268,908 118.73 3,323,196 430.73 626,154 (37.22) 4,900,635 (7.66) 5,307,263 (18.46)
183,654,952 60.53 114,405,530 75.19 65,303,768 99.54 32,727,282 (21.83) 41,868,075 3.05 40,628,932 98.46
220,062,206 52.65 144,165,700 54.03 93,594,967 57.14 59,559,647 (9.28) 65,653,818 10.41 59,463,027 73.91
Total Liabilities Total Share Capital and Reserves Total Assets

(Rupees in billion) (Rupees in billion) (Rupees in billion)
ANALYSIS
2018-19 156.5 2018-19 63.6 2018-19 220.1 In 2018-19, total assets increased by 53% primarily due to increase in
current assets. Increase in current assets is mainly due to increase in
2017-18 104.0 2017-18 40.2 2017-18 144.2
trade debts and cash and cash equivalents. On equity and liabilities
2016-17 68.1 2016-17 25.5 2016-17 93.6 side, share capital and reserves increased by 58% mainly due to
2015-16 42.6 2015-16 17.0 2015-16 59.6 increase in profit and loss account on account of retained profit.
Non current liabilities increased by 26% primarily due to increase in
2014-15 54.2 2014-15 11.5 2014-15 65.7
provision for decommissioning cost while current liabilities increased
2013-14 42.6 2013-14 16.8 2013-14 59.5 by 52% principally due to increase in GIDC payable.
Vertical Analysis
STATEMENT OF FINANCIAL POSITION
2019 % 2018 % 2017 % 2016 % 2015 % 2014 %
age age age age age age
EQUITY AND LIABILITIES

Share capital and reserves
Issued, subscribed and paid up capital 1,212,750 0.55 1,102,500 0.76 1,102,500 1.18 1,102,500 1.85 1,102,500 1.68 918,750 1.55
Undistributed percentage return reserve 602,415 0.27 613,109 0.43 496,436 0.53 426,867 0.72 395,331 0.60 414,014 0.70
Other reserves 13,190,001 5.99 12,190,001 8.46 11,190,001 11.96 10,690,001 17.95 9,962,850 15.17 5,739,995 9.65
Profit and loss account 48,601,563 22.09 26,286,128 18.23 12,748,733 13.62 4,746,555 7.97 35,537 0.06 9,749,472 16.40
63,606,729 28.90 40,191,738 27.88 25,537,670 27.29 16,965,923 28.49 11,496,218 17.51 16,822,231 28.30
Non Current Liabilities
Long term financing - - - - 4,172,727 4.45 1,000,000 1.68 9,290,001 14.15 332,505 0.54
Deferred liabilities 10,057,962 4.57 7,952,336 5.51 7,483,812 8.00 6,576,575 11.04 5,468,973 8.33 4,714,598 7.93
10,057,962 4.57 7,952,336 5.51 11,656,539 12.45 7,576,575 12.72 14,758,974 22.48 5,047,103 8.47
Current Liabilities
Trade and other payables 140,372,206 63.79 93,903,238 65.14 55,165,162 58.94 34,647,573 58.17 36,235,805 55.19 36,074,046 60.67
Unclaimed dividend 32,563 0.01 19,371 0.01 17,274 0.02 10,140 0.02 10,333 0.02 9,410 0.02
Unpaid dividend 7,544 0.01 11,514 0.01 8,733 0.01 11,508 0.02 410,241 0.62 93,550 0.16
Current maturity of long term financing - - - - 955,037 1.02 151,774 0.25 1,632,505 2.49 1,379,173 2.32
Interest accrued on long term financing - - - - 254,552 0.27 196,154 0.33 1,109,742 1.69 37,514 0.06
Provision for income tax 5,985,202 2.72 2,087,503 1.45 - - - - - - - -
146,397,515 66.53 96,021,626 66.61 56,400,758 60.26 35,017,149 58.79 39,398,626 60.01 37,593,693 63.23
220,062,206 100.00 144,165,700 100.00 93,594,967 100.00 59,559,647 100.00 65,653,818 100.00 59,463,027 100.00
ASSETS
Non current assets
Property, plant and equipment 16,176,231 7.35 13,266,282 9.20 12,688,670 13.56 11,023,452 18.51 9,774,533 14.89 8,671,909 14.58
Development and production assets 12,755,574 5.80 11,886,872 8.25 7,409,878 7.92 3,002,063 5.04 2,187,715 3.33 3,621,571 6.09
Exploration and evaluation assets 6,553,548 2.97 2,689,549 1.87 5,972,108 6.38 10,084,055 16.92 9,399,602 14.32 4,584,270 7.71
Long term loans and advances 39,755 0.02 35,411 0.02 32,233 0.03 27,069 0.05 20,489 0.03 7,623 0.01
Long term deposits and prepayments 230,999 0.10 62,890 0.04 26,002 0.03 15,104 0.03 10,639 0.02 18,335 0.03
Deferred income tax asset 651,147 0.30 1,819,166 1.26 2,162,308 2.31 2,680,622 4.50 2,392,765 3.64 1,930,387 3.25
36,407,254 16.54 29,760,170 20.64 28,291,199 30.23 26,832,365 45.05 23,785,743 36.23 18,834,095 31.67
Current assets
Stores and spares 2,349,391 1.07 671,051 0.47 1,015,000 1.08 2,167,328 3.64 1,717,945 2.62 835,055 1.40
Trade debts 148,939,878 67.67 95,294,994 66.10 54,426,085 58.15 26,887,469 45.14 32,355,308 49.28 31,165,789 52.41
Loans and advances 4,752,460 2.16 2,532,344 1.76 1,640,065 1.75 1,437,456 2.42 1,755,283 2.68 1,709,860 2.88
Short term investments 20,700,000 9.41 8,437,354 5.85 3,604,596 3.85 - - - - - -
Short term prepayments 92,919 0.04 66,714 0.05 65,697 0.07 80,193 0.13 122,341 0.19 55,857 0.09
Interest accrued 105,747 0.05 103,183 0.07 47,031 0.05 3,961 0.01 1,922 0.00 5,824 0.01
Other receivables 78,739 0.04 30,982 0.02 39,779 0.04 21,333 0.04 3,282 0.00 913,739 1.54
Income tax paid in advance - - - - 1,142,319 1.22 1,503,388 2.52 1,011,359 1.54 635,545 1.07
Cash and bank balances 6,635,818 3.02 7,268,908 5.04 3,323,196 3.56 626,154 1.05 4,900,635 7.46 5,307,263 8.93
183,654,952 83.46 114,405,530 79.36 65,303,768 69.77 32,727,282 54.95 41,868,075 63.77 40,628,932 68.33
220,062,206 100.00 144,165,700 100.00 93,594,967 100.00 59,559,647 100.00 65,653,818 100.00 59,463,027 100.00
Composition of Assets Composition of Equity & Liabilities

(Percentage) (Percentage)
2018-19 16.5 83.5 2018-19 28.9 4.6 66.5

2017-18 20.6 79.4 2017-18 27.9 5.5 66.6 ANALYSIS
2016-17 30.2 69.8 2016-17 27.2 12.8 60.0 In 2018-19, total assets comprise of 83% current assets and
17% non-current assets. Current assets increased from the
2015-16 45.1 54.9 2015-16 28.5 12.7 58.8 last year mainly due to increase in trade debts and cash and
2014-15 36.2 63.8 2014-15 17.5 22.5 60.0 cash equivalents. Further, increase in non current assets
is mainly due to increase in property, plant and equipment
2013-14 31.7 68.3 2013-14 28.3 8.5 63.2
and exploration and evaluation assets. On the other side,
O Current assets O Current liabilities liabilities and equity almost remained in the same proportion
O Non current assets O Non current liabilities
O Share capital & reserves as compared to the last year.
Horizontal Analysis
STATEMENT OF PROFIT OR LOSS
2019 19 vs 18 2018 18 vs 17 2017 17 vs 16 2016 16 vs 15 2015 15 vs 14 2014 14 vs 13
%age %age %age %age %age %age
Gross sales to customers 117,542,103 17.49 100,042,839 3.38 96,775,974 1.87 94,997,719 7.66 88,239,537 25.24 70,454,050 11.35
Gas development surcharge 9,280,308 (15.86) 11,029,741 (43.67) 19,580,832 (24.28) 25,859,852 43.52 18,017,729 (9.73) 19,959,539 (6.06)
General sales tax 12,098,286 3.69 11,668,172 (15.11) 13,745,689 1.75 13,509,334 9.20 12,370,744 24.29 9,952,761 17.51
Excise duty 1,888,366 (0.95) 1,906,530 6.25 1,794,397 5.91 1,694,205 3.94 1,630,044 5.31 1,547,845 3.47
Gas infrastructure development cess 34,827,136 0.19 34,762,028 3.83 33,479,569 4.84 31,933,382 (11.42) 36,050,495 51.90 23,733,661 31.58
Wind fall levy - - - - - (100.00) 288,182 (63.73) 794,504 53.91 516,224 1.56
Surplus/(deficit) under the Gas Price Agreement - - - - - - - - - (100.00) (133,949) (107.72)
58,094,096 (2.14) 59,366,471 (13.46) 68,600,487 (6.39) 73,284,955 6.42 68,863,516 23.91 55,576,081 7.93
Sales - net 59,448,007 46.15 40,676,368 44.37 28,175,487 29.76 21,712,764 12.06 19,376,021 30.23 14,877,969 26.32
Royalty 7,574,515 46.20 5,180,869 44.57 3,583,522 30.31 2,750,095 9.17 2,519,026 31.06 1,922,086 25.51
51,873,492 46.14 35,495,499 44.34 24,591,965 29.69 18,962,669 12.49 16,856,995 30.11 12,955,883 26.44
Operating expenses 11,712,974 17.30 9,985,411 34.03 7,450,011 29.26 5,763,609 7.21 5,376,244 22.88 4,375,198 (3.12)
Exploration and prospecting expenditure 4,308,006 29.96 3,314,839 (14.58) 3,880,797 (39.95) 6,462,126 102.30 3,194,383 2.51 3,116,299 24.85
Other charges 2,435,811 68.25 1,447,747 99.33 726,290 44.70 501,943 0.65 498,725 54.61 322,563 (2.49)
18,456,791 25.15 14,747,997 22.32 12,057,098 (5.27) 12,727,678 40.34 9,069,352 16.06 7,814,060 6.42
33,416,701 61.06 20,747,502 65.52 12,534,867 101.04 6,234,991 (19.94) 7,787,643 51.46 5,141,823 77.10
Other income/(expenses) 326,087 (156.04) (581,846) (29.07) (820,328) (246.54) 559,789 1,495.66 35,082 (107.36) (476,755) (150.08)
Operating profit 33,742,788 67.33 20,165,656 72.14 11,714,539 72.40 6,794,780 (13.14) 7,822,725 67.69 4,665,068 21.00
Finance income 1,767,306 130.83 765,616 228.58 233,006 (31.62) 340,730 (34.13) 517,239 (12.87) 593,674 128.79
Finance cost 801,760 25.33 639,728 (19.84) 798,086 39.03 574,058 (67.90) 1,788,092 102.94 881,105 40.66
Profit before taxation 34,708,334 71.05 20,291,544 82.00 11,149,459 69.92 6,561,452 0.15 6,551,872 49.67 4,377,637 25.49
Provision for taxation 10,381,246 111.12 4,917,204 144.24 2,013,265 294.76 509,997 (43.43) 901,559 107.57 434,334 (59.31)
Profit for the year 24,327,088 58.23 15,374,340 68.28 9,136,194 50.98 6,051,455 7.10 5,650,313 43.29 3,943,303 62.87
Gross Sales Operating Profit Net Profit

(Rupees in billion) (Rupees in billion) (Rupees in billion)
2018-19 117.5 2018-19 33.7 2018-19 24.3

2017-18 100.0 2017-18 20.2 2017-18 15.4 ANALYSIS
Increase in net sales, other income and finance income
2016-17 96.8 2016-17 11.7 2016-17 9.1 were the major reasons for increase in profitability in
2015-16 95.0 2015-16 6.8 2015-16 6.1 2018-19 as compared to 2017-18. This was partially offset
by increase in royalty, operating expenses, exploration
2014-15 88.2 2014-15 7.8 2014-15 5.7
and prospecting expenditure, other charges, finance cost
2013-14 70.5 2013-14 4.7 2013-14 3.9 and provision for taxation.
Vertical Analysis
STATEMENT OF PROFIT OR LOSS
2019 % 2018 % 2017 % 2016 % 2015 % 2014 %
age age age age age age
Gross sales to customers 117,542,103 100.00 100,042,839 100.00 96,775,974 100.00 94,997,719 100.00 88,239,537 100.00 70,454,050 100.00
Gas development surcharge 9,280,308 7.90 11,029,741 11.03 19,580,832 20.23 25,859,852 27.22 18,017,729 20.42 19,959,539 28.33
General sales tax 12,098,286 10.29 11,668,172 11.66 13,745,689 14.20 13,509,334 14.22 12,370,744 14.02 9,952,761 14.13
Excise duty 1,888,366 1.61 1,906,530 1.91 1,794,397 1.85 1,694,205 1.78 1,630,044 1.85 1,547,845 2.20
Gas infrastructure development cess 34,827,136 29.63 34,762,028 34.74 33,479,569 34.59 31,933,382 33.61 36,050,495 40.86 23,733,661 33.69
Wind fall levy - - - - - - 288,182 0.30 794,504 0.90 516,224 0.73
Surplus / (deficit) under the Gas Price Agreement - - - - - - - - - - (133,949) (0.19)
58,094,096 49.43 59,366,471 59.34 68,600,487 70.89 73,284,955 77.14 68,863,516 78.04 55,576,081 78.88
Sales - net 59,448,007 50.57 40,676,368 40.66 28,175,487 29.11 21,712,764 22.86 19,376,021 21.96 14,877,969 21.12
Royalty 7,574,515 6.44 5,180,869 5.18 3,583,522 3.70 2,750,095 2.89 2,519,026 2.85 1,922,086 2.73
51,873,492 44.13 35,495,499 35.48 24,591,965 25.41 18,962,669 19.96 16,856,995 19.10 12,955,883 18.39
Operating expenses 11,712,974 9.96 9,985,411 9.98 7,450,011 7.70 5,763,609 6.07 5,376,244 6.09 4,375,198 6.21
Exploration and prospecting expenditure 4,308,006 3.67 3,314,839 3.31 3,880,797 4.01 6,462,126 6.80 3,194,383 3.62 3,116,299 4.42
Other charges 2,435,811 2.07 1,447,747 1.45 726,290 0.75 501,943 0.53 498,725 0.57 322,563 0.46
18,456,791 15.70 14,747,997 14.74 12,057,098 12.46 12,727,678 13.40 9,069,352 10.28 7,814,060 11.09
33,416,701 28.43 20,747,502 20.74 12,534,867 12.95 6,234,991 6.56 7,787,643 8.83 5,141,823 7.30
Other income / (expenses) 326,087 0.28 (581,846) (0.58) (820,328) (0.85) 559,789 0.59 35,082 0.04 (476,755) (0.68)
Operating profit 33,742,788 28.71 20,165,656 20.16 11,714,539 12.10 6,794,780 7.15 7,822,725 8.87 4,665,068 6.62
Finance income 1,767,306 1.50 765,616 0.77 233,006 0.24 340,730 0.36 517,239 0.59 593,674 0.84
Finance cost 801,760 0.68 639,728 0.64 798,086 0.82 574,058 0.60 1,788,092 2.03 881,105 1.25
Profit before taxation 34,708,334 29.53 20,291,544 20.28 11,149,459 11.52 6,561,452 6.91 6,551,872 7.43 4,377,637 6.21
Provision for taxation 10,381,246 8.83 4,917,204 4.92 2,013,265 2.08 509,997 0.54 901,559 1.02 434,334 0.62
Profit for the year 24,327,088 20.70 15,374,340 15.37 9,136,194 9.44 6,051,455 6.37 5,650,313 6.40 3,943,303 5.60
Composition of Statement of Profit or Loss

(Percentage)
2018-19 20.70 79.30

2017-18 15.4 84.6
2016-17 9.4 90.6
2015-16 6.4 93.6 ANALYSIS
During 2018-19, net sales were 50.58% of
2014-15 6.4 93.6 gross sales as compared to 40.66% in the
2013-14 5.6 94.4 last year. Further, percentage of profit for the
O Profit year to gross sales increased to 20.70% from
O Expenditure net of other income & finance income 15.37% of the last year.
Ten Years at a Glance Free Cash Flow
Description June 30, 2019 June 30, 2018
Cash Provided by Operating Activities 20,436,053 20,225,239
Less: Capital Expenditures

Property, plant & equipment 3,119,481 2,182,761
Development and production assets 2,413,957 1,650,534
Exploration and evaluation assets 4,325,361 2,424,676
(Rupees in million) 9,858,799 6,257,971
2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10
Free Cash Flow 10,577,254 13,967,268
FINANCIAL
Revenue 119,635.50 100,226.61 96,188.65 95,898.24 88,791.86 70,570.97 65,128.56 48,228.33 32,177.82 28,979.37
2019 2018
Government levies: (Rupees in thousand) (Rupees in thousand)
Income tax, other charges, royalty,
excise duty, general sales tax, gas
development surcharge and gas
infrastructure development cess 77,045.51 70,409.10 74,298.34 77,328.34 73,242.31 58,599.39 55,511.89 41,617.72 26,647.09 23,061.72
Sales - net 59,448.01 40,676.37 28,175.49 21,712.76 19,376.02 14,877.97 11,777.77 7,555.92 7,128.27 6,423.01
Operating profit 33,742.79 20,165.66 11,714.54 6,794.78 7,822.73 4,665.07 3,198.70 1,725.80 2,778.43 2,460.75
Profit before taxation 34,708.33 20,291.54 11,149.46 6,561.45 6,551.87 4,377.64 3,488.49 1,402.50 2,708.90 2,341.47
O Free cash flow O Free cash flow
Profit for the year 24,327.09 15,374.34 9,136.19 6,051.46 5,650.31 3,943.30 2,421.08 1,115.17 1,725.30 1,185.95 O Capital expenditures O Capital expenditures
Issued, subscribed and paid up capital 1,212.75 1,102.50 1,102.50 1,102.50 1,102.50 918.75 918.75 918.75 735.00 735.00
Reserves 62,393.98 39,089.24 24,435.17 15,863.42 10,393.72 15,903.48 12,637.98 10,557.40 9,935.42 8,455.83
Property, plant and equipment - at cost 27,648.46 22,345.12 20,315.85 17,217.73 14,857.61 12,798.64 9,426.47 7,560.05 7,417.33 6,699.57
Net current assets/(liabilities) 37,257.44 18,383.90 8,903.01 (2,289.87) 2,469.45 3,035.24 5,197.97 4,284.04 3,265.80 3,231.97
Long term liabilities including
deferred liabilities 10,057.96 7,952.34 11,656.54 7,576.58 14,758.97 5,047.10 5,361.39 5,362.28 4,966.34 4,471.03
COMPOSITION OF
NATURAL GAS
Development and production
leases (sq. kilometres) 1,209.1
.
1,162.2 1,140.5 1,111.7 1,093.5 1,093.5 1,093.5 1,093.5 1,093.5 1,093.5

Local vs Imported Material and
Estimated ultimate recovery of
proved reserves (BSCF)
Sensitivity Analysis
- Operated fields/blocks 10,986.34 10,655.8 10,653.2 8,440.9 8,427.9 8,402.9 8,398.4 8,398.4 8,321.7 8,299.3 DUE TO FOREIGN CURRENCY FLUCTUATIONS
Cumulative production (BSCF) * 5,859.5 5,602.4 5,345.2 5,101.4 4,869.4 4,644.6 4,427.3 4,216.1 4,009.7 3,821.9
A substantial portion (~55%) of our annual procurement spend comprises of foreign materials and services, while major
Number of producing wells 159 135 127 124 119 118 114 107 99 98
spend remains in USD. With ~30% inflation of US dollar rate against Pak Rupee over the last year, the degree of volatility and
Production (BSCF) * 257.14 257.16 243.84 232.0 224.7 217.3 211.2 206.5 187.8 179.7
uncertainty built into the current economic environment is unprecedented.
Daily average (BSCF) * 0.704 0.705 0.668 0.634 0.616 0.595 0.579 0.564 0.515 0.492
Exchange rate fluctuation is one of the major barriers faced by our global sourcing initiatives aimed at procuring quality
OIL materials and achieving incremental cost savings. Deteriorating exchange rate may result in zero or even negative savings in
Production (barrels) * 405,055 543,820 554,081 472,413 414,433 175,312 192,259 124,279 130,093 62,212 terms of local currency.
LPG Further, deteriorating exchange rate also adversely affects the local sourcing initiatives as our key suppliers import a
Production (metric ton) * 19.83 - 20 25 362 263 477 2,062 5,031 1,231 significant portion of raw materials which proportionately impacts prices quoted by them.
* MPCL's share
Statement of Value Added Pattern of Shareholding

AS AT JUNE 30, 2019
No. of Total
Year 2018-19 Year 2017-18 Shareholders Shareholding shares held
(Rs. in million) % age (Rs. in million) % age
833 1 to 100 30,462
539 101 to 500 136,248
Gross sales to customers 117,542.10 108.62 100,042.84 110.50
357 501 to 1,000 279,640
Operating and exploration expenses (9,306.12) (8.60) (8,641.12) (9.54) 522 1,001 to 5,000 1,137,924
114 5,001 to 10,000 811,693
108,235.98 100.02 91,401.72 100.95 44 10,001 to 15,000 553,668
Other income and other expenses (22.70) (0.02) (862.43) (0.95) 25 15,001 to 20,000 427,782
12 20,001 to 25,000 268,000
Total value added 108,213.28 100.00 90,539.29 100.00 9 25,001 to 30,000 252,499
7 30,001 to 35,000 226,558
DISTRIBUTED AS FOLLOWS: 13 35,001 to 40,000 485,586
Employees as remuneration and benefits 6,451.59 5.96 4,618.15 5.10 8 40,001 to 45,000 344,545
Government as levies: 4 45,001 to 50,000 194,555
6 50,001 to 55,000 310,556
- Direct 9,682.02 8.95 4,824.38 5.33 1 55,001 to 60,000 56,760
- Indirect 67,363.49 74.40 65,584.72 72.44 3 60,001 to 65,000 185,618
2 65,001 to 70,000 135,839
77,045.51 71.20 70,409.10 77.77 1 70,001 to 75,000 74,645
Shareholder as dividends 759.84 0.70 709.93 0.78 4 75,001 to 80,000 303,748
Social welfare 540.48 0.50 202.99 0.22 2 80,001 to 85,000 169,784
1 85,001 to 90,000 88,712
Providers of long term finance as financial charges - 0.00 26.56 0.03
1 90,001 to 95,000 93,360
Retained within the business 23,415.87 21.64 14,572.56 16.10 1 95,001 to 100,000 96,448
3 100,001 to 105,000 310,002
108,213.28 100.00 90,539.29 100.00 3 105,001 to 110,000 323,003
2 110,001 to 115,000 225,080
1 115,001 to 120,000 115,462
Distribution Distribution
2018-19 2017-18 1 120,001 to 125,000 121,000
2 125,001 to 130,000 256,024
2 130,001 to 135,000 268,344
2 140,001 to 145,000 285,608
1 145,001 to 150,000 146,630
1 150,001 to 155,000 152,131
1 155,001 to 160,000 158,290
2 170,001 to 175,000 344,522
1 190,001 to 195,000 191,820
1 210,001 to 215,000 210,786
71.20% O Government as levies 77.77% O Government as levies
1 220,001 to 225,000 222,431
21.64% O Retained within the business 16.10% O Retained within the business
1 235,001 to 240,000 238,329
5.96% O Employees as remuneration and benefits 5.10% O Employees as remuneration and benefits
1 250,001 to 255,000 250,010
0.70% O Shareholder as dividends 0.78% O Shareholder as dividends
0.50% O Social welfare 0.22% O Social welfare
1 255,001 to 260,000 255,893
0.00% O Providers of long term finance as 0.03% O Providers of long term finance as 1 270,001 to 275,000 272,214
financial charges financial charges 1 285,001 to 290,000 287,782
1 290,001 to 295,000 294,910
1 360,001 to 365,000 363,770
1 370,001 to 375,000 372,872
2 410,001 to 415,000 824,636
1 420,001 to 425,000 421,606
Statement of Economic 1
1
430,001
470,001
to
to
435,000
475,000
434,980
470,686
Charity Account Value Added 1

1
2
495,001
665,001
1,390,001
to
to
to
500,000
670,000
1,397,000
498,515
669,200
2,790,550
(Rupees in thousand) 1 1,685,001 to 1,690,000 1,689,539
Description 2018-19 1 1,940,001 to 1,945,000 1,941,666
1 2,090,001 to 2,095,000 2,092,939
Health care 147,231 1 2,650,001 to 2,655,000 2,653,512
1 22,295,001 to 22,300,000 22,297,015
Education
Social Welfare
104,560
288,684
Rs 15,596 million 1
1
24,050,001
48,105,001
to
to
24,055,000
48,110,000
24,052,875
48,105,738
540,475 2,557 121,275,000
Pattern of Shareholding as at June 30, 2019
Categories of Shareholders
Shares Pending Total Shares Pending Total
Categories of Shareholders Numbers held Shares *** Shares %age Categories of Shareholders Numbers held Shares *** Shares %age
Associated Companies, undertakings and related parties - CDC - Trustee Meezan Energy Fund 1 105,385 - 105,385 0.09
- Oil & Gas Development Company Limited 1 24,052,875 202,125 24,255,000 20.00 - CDC - Trustee Meezan Islamic Fund 1 2,092,939 9,899 2,102,838 1.73
- Committee of Administration Fauji Foundation 1 48,105,750 404,250 48,510,000 40.00 - CDC - Trustee Meezan Tahaffuz Pension Fund - Equity Fund 1 250,010 1,430 251,440 0.21
- CDC - Trustee NAFA Islamic Active Allocation - Equity Fund 1 69,941 - 69,941 0.06
Mutual Funds - CDC - Trustee NAFA Islamic Energy Fund 1 102,115 - 102,115 0.08
- CDC - Trustee HBL Energy Fund 1 109,618 - 109,618 0.09 - CDC - Trustee NAFA Islamic Principal Protected Fund - II 1 1,520 - 1,520 0.00
- CDC - Trustee ABL Stock Fund 1 294,910 - 294,910 0.24 - CDC - Trustee NAFA Islamic Stock Fund 1 222,431 - 222,431 0.18
- CDC - Trustee AKD Index Tracker Fund 1 5,535 47 5,582 0.00 - CDC - Trustee NAFA Stock Fund 1 414,228 - 414,228 0.34
- CDC - Trustee Al Ameen Islamic Dedicated Equity Fund 1 498,515 - 498,515 0.41 - CDC - Trustee NBP Balanced Fund 1 26,376 - 26,376 0.02
- CDC - Trustee Al Meezan Mutual Fund 1 363,770 1,540 365,310 0.30 - CDC - Trustee NBP Islamic Sarmaya Izafa Fund 1 210,786 - 210,786 0.17
- CDC - Trustee Al Ameen Islamic Asset Allocation Fund 1 133,686 - 133,686 0.11 - CDC - Trustee NBP Sarmaya Izafa Fund 1 38,151 - 38,151 0.03
- CDC - Trustee Al Ameen Shariah Stock Fund 1 470,686 - 470,686 0.39 - CDC - Trustee PICIC Growth Fund 1 272,214 - 272,214 0.22
- CDC - Trustee Alfalah Capital Preservation Fund II 1 2,680 - 2,680 0.00 - CDC - Trustee PICIC Investment Fund 1 142,948 - 142,948 0.12
- CDC - Trustee Alfalah GHP Alpha Fund 1 63,131 - 63,131 0.05 - CDC - Trustee UBL Asset Allocation Fund 1 7,538 - 7,538 0.01
- CDC - Trustee Alfalah GHP Islamic Dedicated Equity Fund 1 780 - 780 0.00 - CDC - Trustee UBL Dedicated Equity Fund 1 12,098 - 12,098 0.01
- CDC - Trustee Alfalah GHP Islamic Stock Fund 1 115,462 - 115,462 0.10 - CDC - Trustee UBL Retirement Savings Fund - Equity Sub Fund 1 61,767 - 61,767 0.05
- CDC - Trustee Alfalah GHP Islamic Value Fund 1 4,096 - 4,096 0.00 - CDC - Trustee UBL Stock Advantage Fund 1 372,872 - 372,872 0.31
- CDC - Trustee Alfalah GHP Stock Fund 1 88,712 - 88,712 0.07 - CDC - Trustee Meezan Dedicated Equity Fund 1 93,360 - 93,360 0.08
- CDC - Trustee Alfalah GHP Value Fund 1 39,250 59 39,309 0.03 - CDC - Trustee Al-Ameen Islamic Ret. Sav. Fund - Equity Sub Fund 1 103,185 - 103,185 0.09
- CDC - Trustee Allied Energy Fund 1 15,760 - 15,760 0.01 - CDC - Trustee Alhamrah Islamic Asset Allocation Fund 1 6 - 6 0.00
- CDC - Trustee APF - Equity Sub Fund 1 16,470 - 16,470 0.01 - CDC - Trustee First Habib Islamic Stock Fund 1 4,482 - 4,482 0.00
- CDC - Trustee APIF - Equity Sub Fund 1 25,732 - 25,732 0.02 - CDC - Trustee HBL Islamic Stock Fund 1 51,681 - 51,681 0.04
- CDC - Trustee Askari Equity Fund 1 2,002 - 2,002 0.00 - McFSL - Trustee Askari Islamic Asset Allocation Fund 1 2,772 - 2,772 0.00
- CDC - Trustee Atlas Islamic Dedicated Stock Fund 1 13,280 - 13,280 0.01 - McFSL - Trustee JS Growth Fund 1 75,540 - 75,540 0.06
- CDC - Trustee Atlas Islamic Stock Fund 1 77,355 110 77,465 0.06 - MCBFSL - Trustee ABL Islamic Stock Fund 1 142,660 - 142,660 0.12
- CDC - Trustee Atlas Stock Market Fund 1 238,329 165 238,494 0.20 - MCBFSL - Trustee Allied Capital Protected Fund 1 474 - 474 0.00
- CDC - Trustee Faysal Asset Allocation Fund 1 2,620 - 2,620 0.00 - MCBFSL - Trustee HBL Islamic Dedicated Equity Fund 1 9,650 - 9,650 0.01
- CDC - Trustee Faysal Islamic Asset Allocation Fund 1 9,350 - 9,350 0.01 - MCBFSL - Trustee JS Value Fund 1 12,230 - 12,230 0.01
- CDC - Trustee Faysal Stock Fund 1 6,840 - 6,840 0.01 - MCBFSL - Trustee Pak Oman Advantage Asset Allocation Fund 1 660 - 660 0.00
- CDC - Trustee First Capital Mutual Fund 1 5,300 85 5,385 0.00 - MCBFSL - Trustee Pak Oman Islamic Asset Allocation Fund 1 6,470 - 6,470 0.01
- CDC - Trustee First Habib Asset Allocation Fund 1 800 - 800 0.00 - MCBFSL - Trustee ABL Islamic Dedicated Stock Fund 1 84,884 - 84,884 0.07
- CDC - Trustee First Habib Stock Fund 1 3,800 - 3,800 0.00 - MCBFSL - Trustee ABL Islamic Asset Allocation Fund 1 9,160 - 9,160 0.01
- CDC - Trustee HBL Stock Fund 1 134,658 - 134,658 0.11 - CDC - Trustee PIML Islamic Equity Fund 1 - 38 38 0.00
- CDC - Trustee HBL Equity Fund 1 14,459 - 14,459 0.01 - CDC - Trustee PIML Strategic Multi Asset Fund 1 - 27 27 0.00
- CDC - Trustee HBL IPF Equity Sub Fund 1 9,300 154 9,454 0.01 - CDC - Trustee First Crosby Dragon Fund 1 - 22 22 0.00
- CDC - Trustee HBL Islamic Asset Allocation Fund 1 29,214 - 29,214 0.02 - CDC - Trustee JS KSE-30 Index Fund 1 - 8 8 0.00
- CDC - Trustee HBL Islamic Equity Fund 1 21,583 - 21,583 0.02 Public Sector Companies and Corporations
- CDC - Trustee HBL Multi - Asset Fund 1 6,958 - 6,958 0.01 - Oil & Gas Development Company Limited * - - - -
- CDC - Trustee HBL PF Equity Sub Fund 1 10,828 - 10,828 0.01
NIT & ICP
- CDC - Trustee JS Islamic Dedicated Equity Fund 1 1,000 - 1,000 0.00
- Investment Corporation of Pakistan 1 3,665 - 3,665 0.00
- CDC - Trustee JS Islamic Fund 1 48,894 - 48,894 0.04
- IDBP (ICP Unit) 1 2,857 - 2,857 0.00
- CDC - Trustee JS Islamic Pension Savings Fund-Equity Account 1 4,932 - 4,932 0.00
- CDC - Trustee National Investment (Unit) Trust 1 2,653,512 42,062 2,695,574 2.22
- CDC - Trustee JS Pension Savings Fund - Equity Account 1 18 - 18 0.00
- CDC - Trustee NIT Islamic Equity Fund 1 108,000 - 108,000 0.09
- CDC - Trustee KSE Meezan Index Fund 1 52,867 362 53,229 0.04
- CDC - Trustee NIT Equity Market Opportunity Fund 1 410,408 5,376 415,784 0.34
- CDC - Trustee Lakson Equity Fund 1 104,702 1,111 105,813 0.09
- CDC - Trustee Unit Trust of Pakistan 1 65,898 - 65,898 0.05
- CDC - Trustee Lakson Islamic Tactical Fund 1 5,151 - 5,151 0.00
- CDC - Trustee NITIPF Equity Sub-Fund 1 4,080 - 4,080 0.00
- CDC - Trustee Lakson Tactical Fund 1 17,424 - 17,424 0.01
- CDC - Trustee NITPF Equity Sub-Fund 1 1,660 - 1,660 0.00
- CDC - Trustee MCB Pakistan Asset Allocation Fund 1 14 - 14 0.00
- CDC - Trustee MCB Pakistan Stock Market Fund 1 36,865 - 36,865 0.03 Banks, Development Financial Institutions
- CDC - Trustee Meezan Asset Allocation Fund 1 60,720 - 60,720 0.05 and Non-Banking Financial Institutions
- CDC - Trustee Meezan Balanced Fund 1 152,131 330 152,461 0.13 - National Development Finance Corporation 1 4,908 - 4,908 0.00
Pattern of Shareholding as at June 30, 2019
Categories of Shareholders
Shares Pending Total Shares Pending Total
Categories of Shareholders Numbers held Shares *** Shares %age Categories of Shareholders Numbers held Shares *** Shares %age
- Bank Alfalah Limited (CDC) 1 287,782 - 287,782 0.24 - Pakistan Herald Publications (Pvt) Limited Staff Pension Fund (CDC) 1 1,000 - 1,000 0.00
- Habib Bank Limited - Treasury Division (CDC) 1 84,900 - 84,900 0.07 - Trustee Nestle Pakistan Limited - Managerial Staff Pension Fund (CDC) 1 32,385 - 32,385 0.03
- Meezan Bank Limited (CDC) 1 171,822 - 171,822 0.14 - CDC - Trustee AGIPF Equity Sub-Fund 1 2,167 - 2,167 0.00
- National Bank of Pakistan (CDC) 1 1,396,054 - 1,396,054 1.15 - CDC - Trustee AGPF Equity Sub-Fund 1 1,572 - 1,572 0.00
- First Credit & Investment Bank Limited (CDC) 1 770 - 770 0.00 - CDC - Trustee Pakistan Pension Fund - Equity Sub-Fund 1 2 - 2 0.00
Insurance & Takaful Companies - CDC - Trustee Alhamra Islamic Pension Fund - Equity Sub-Fund 1 18 - 18 0.00
- Adamjee Life Assurance Company Limited DGF (CDC) 1 11,144 - 11,144 0.01 Shareholders Holdings 5% or more Voting Interest **
- Adamjee Life Assurance Company Limited (CDC) 1 13,062 - 13,062 0.01 - Local Individuals 2,213 4,495,127 - 4,495,127 3.71
- Adamjee Life Assurance Company Limited ISF (CDC) 1 5,820 - 5,820 0.00 - Foreign Individuals 3 21,488 - 21,488 0.02
- Adamjee Life Assurance Company Limited IMF (CDC) 1 74,645 - 74,645 0.06 Others
- Alfalah Insurance Company Limited (CDC) 1 7,472 - 7,472 0.01 - Government of Pakistan 1 22,297,015 - 22,297,015 18.39
- Askari General Insurance Company (CDC) 1 5,100 - 5,100 0.00 - Federal Board of Revenue 1 49,817 - 49,817 0.04
- Century Insurance Company Limited (CDC) 1 2,869 - 2,869 0.00 - Joint Stock Companies 64 1,026,749 - 1,026,749 0.85
- EFU Life Assurance Limited (CDC) 1 434,980 - 434,980 0.36 - Executives 4 18,484 - 18,484 0.02
- IGI Life Insurance Limited (CDC) 1 3,402 - 3,402 0.00 - Foreign Companies 18 178,327 - 178,327 0.15
- Jubilee General Insurance Company Limited (CDC) 1 51,744 - 51,744 0.04 - Others 106 2,408,961 - 2,408,961 1.99
- Jubilee General Window Takaful Fund - PTF (CDC) 1 3,100 - 3,100 0.00
2,557 120,605,800 669,200 121,275,000 100
- Jubilee Life Insurance Company Limited (CDC) 1 1,689,539 - 1,689,539 1.39
- State Life Insurance Corp. of Pakistan (CDC) 1 1,394,496 - 1,394,496 1.15 * Public Sector Companies and Corporations
- Takaful Pakistan Limited (CDC) 1 3,914 - 3,914 0.00 (Separately included above)
- Askari General Insurance Company Limited (CDC) 1 300 - 300 0.00 - Oil & Gas Development Company Limited - 24,052,875 202,125 24,255,000 20.00
- Dawood Family Takaful Limited (CDC) 1 42,557 - 42,557 0.04 ** Shareholders holdings 5% or more voting interest
Modarabas (Separately included above)
- B.R.R. Guardian Modaraba (CDC) 1 10,153 - 10,153 0.01 - Fauji Foundation - 48,105,750 404,250 48,510,000 40.00
- First Alnoor Modaraba (CDC) 1 176 - 176 0.00 - Oil & Gas Development Company Limited - 24,052,875 202,125 24,255,000 20.00
Pension Funds - Government of Pakistan - 22,297,015 - 22,297,015 18.39
- Trustee - ICI Pakistan Management Staff Pension Fund (CDC) 1 11,944 - 11,944 0.01 Shares held by Sponsor Shareholders
- Trustee - National Bank of Pakistan Employees Pension Fund (CDC) 1 421,606 - 421,606 0.35 - Fauji Foundation - 48,105,750 404,250 48,510,000 40.00
- Pfizer Pakistan DC Pension Fund (CDC) 1 5,315 - 5,315 0.00 - Oil & Gas Development Company Limited - 24,052,875 202,125 24,255,000 20.00
- Unilever Pakistan DC Pension Fund (Sub Fund A) (CDC) 1 8,245 - 8,245 0.01 - Government of Pakistan - 22,297,015 - 22,297,015 18.39
- Unilever Pakistan DC Pension Fund (Sub Fund B) (CDC) 1 4,749 - 4,749 0.00 Shares held by Directors and Executives
- Unilever Pension Plan (CDC) 1 403 - 403 0.00 - Directors - 12 - 12 0.00
- Wyeth Pakistan DC Pension Fund (CDC) 1 659 - 659 0.00 - Executives - 18,484 - 18,484 0.02
- CDC - Trustee ABL Islamic Pension Fund - Equity Sub Fund 1 5,830 - 5,830 0.00
During the financial year the trading in shares of the Company by the Directors, CEO, CFO, Company Secretary and their spouses and minor
- CDC - Trustee ABL Pension Fund - Equity Sub Fund 1 7,690 - 7,690 0.01
children is as follows:
- CDC - Trustee NAFA Islamic Pension Fund Equity Account 1 46,944 - 46,944 0.04
Rate
- CDC - Trustee NAFA Pension Fund Equity Sub Fund Account 1 27,756 - 27,756 0.02
Name Date Purchase Sale Rs. Per Share
- Engro Corp. Limited - MPT Employees Def Contr Pension Fund (CDC) 1 2,958 - 2,958 0.00
- Indus Motor Company Limited Employees Pension Fund (CDC) 1 3,700 - 3,700 0.00 Mr Awais-Ur-Rehman January 8, 2019 120 - 1,358.33
- Pakistan Refinery Limited Management Staff Pension Fund (CDC) 1 6,600 - 6,600 0.01
*** Bonus Shares are withheld and have not been issued due to pending resolution of issue relating to deduction of withholding tax on
- Sanofi-Aventis Pak. Senior Executive Pension Fund (CDC) 1 3,520 - 3,520 0.00
issuance of bonus shares.
- Trustee of Pak. Herald Publications (Pvt.) Limited - SPF (CDC) 1 2,890 - 2,890 0.00
- Trustee Pak Tobacco Co. Limited Staff Def Contri Pension Fund (CDC) 1 3,520 - 3,520 0.00
- Trustee Pak Tobacco Co. Limited Staff Pension Fund (CDC) 1 52,140 - 52,140 0.04
- Trustee ANPL Management Staff Pension Fund (CDC) 1 3,003 - 3,003 0.00
- Trustee of Crescent Steel & Allied Products Limited Pension Fund (CDC) 1 460 - 460 0.00
- Trustee of Pfizer Pakistan Pension Fund (CDC) 1 2,100 - 2,100 0.00
- Trustee Shell Pakistan DC Pension Fund (CDC) 1 8,943 - 8,943 0.01
- Trustee Shell Pakistan Management Staff Pension Fund (CDC) 1 11,385 - 11,385 0.01
- Trustee Shell Pakistan Staff Pension Fund (CDC) 1 194 - 194 0.00
from operating activities of the

Company, which was mainly used
to undertake exploration and
development activities, capital
expenditures and payment of
dividends.
DIVIDENDS/BONUS SHARES
The Company has declared an
interim dividend @ Rs 4.00 per
ordinary share (40%) for the year
ended June 30, 2019. Further, final
cash dividend @ Rs 2.50 per share
(25%) for the year ended June 30,
2018 and bonus shares @ 10% were
also declared during the year.
FOREIGN EXCHANGE SAVINGS

AND GOVERNMENT REVENUES
MPCL is a major contributor to the
national economy. The Company’s
share of production of natural
gas, condensate, crude oil and
LPG from its Mari Field and other
Directors' Report
Joint Ventures for the financial
Gross sales for the year under review expenditure, other charges, finance year 2018-19 in terms of energy
reached unprecedented level of Rs cost and provision for taxation. equivalent was 33,638,101 barrels.
117,542 million from Rs 100,043 This has resulted in foreign
million in the last year. The increase Earnings per share (EPS) for the year exchange saving of around Rs 329
is mainly due to increase in sale crossed Rs. 200 mark and stood at billion (2018: Rs 237 billion) for the
We are pleased FINANCIAL RESULTS
The profit and appropriations for the year are as follows: prices. Company’s contribution to Rs 200.59 per share as compared to year assuming an average crude oil
to present the Rupees in thousand

the Government Exchequer also
increased and amounted to Rs 77,046
last year’s Rs 126.77 per share. EPS
on the basis of distributable profits
price of US$ 70.99 per barrel and
average foreign exchange rate of
directors’ report Profit million compared with Rs 70,409
million contributed in the last year.
also increased to Rs 6.27 per share
from Rs 5.85 per share for the last
US$ = Rs 137.67 during the year
(2018: average crude oil price of
Profit for the year after taxation 24,327,088
together with the Other comprehensive loss (151,372)
The operating expenses were Rs year. US$ 62.90 per barrel and average
11,713 million as against Rs 9,985 foreign exchange rate of US$ = Rs
audited financial Un-appropriated profit brought forward 26,286,128 million for the last year. The rate of return to the 110.59).
50,461,844 shareholders for the year, calculated
statements of the Financial statements for the year on the basis of production, was In addition, MPCL contributed
Appropriations show profit for the year of Rs 24,327 44.29%. around Rs 77,046 million to the
Company and the Final cash dividend @ 25% for the year ended June 30, 2018 (103,635) million, recording a healthy growth in Government exchequer during
First interim cash dividend @ 40% for the the net profit from Rs 15,374 million CASH FLOW STRATEGY the year (Rs 70,409 million during
auditors’ report year ended June 30, 2019 (485,100) in the previous year. Increase in net Cash and cash equivalents at the 2017-18) mainly on account of
thereon for the Undistributed Percentage Return Reserve (271,546) sales, other income and finance
income were the major reasons
close of the year were Rs 27,336
million as against Rs 15,706 million
gas development surcharge, gas
infrastructure development cess,
Self-insurance reserve (1,000,000)
year ended Total for the year (1,860,281)
for increase in profitability which
was partially offset with increase
in the previous year. sales tax, excise duty, royalty,
workers’ funds and income tax.
June 30, 2019. 48,601,563 in royalty, operating expenses, During the year, an amount of
exploration and prospecting Rs 20,436 million was generated
Directors' Report
OPERATIONS
Not even a single hour of gas supply
interruption/suspension has been
witnessed from Mari Field for over
last 5 decades. In continuation of its
longstanding tradition, the Company
continued un-interrupted gas supply
to all its customers during the year
2018-19.
A cumulative 245,603 MMSCF of

gas (daily average: 673 MMSCF) and
17,774 barrels of condensate (daily
average: 49 barrels) were produced
from Mari Field during the year as
against 243,403 MMSCF of gas (daily
average: 667 MMSCF) and 17,369
barrels of condensate (daily average:
48 barrels) for the corresponding
year as per the requirement /
withdrawal of the customers.
Pakistan Refinery Limited, Pak Arab Refinery Limited, Pak Arab Fertilizers
In addition, 11,534 MMSCF of Limited, EGAS (Pvt) Limited, Petrosin CNG (Private) Limited and Foundation
gas (daily average: 32 MMSCF), Gas.
92,839 barrels of condensate (daily
average: 254 barrels), 294,442 EXPLORATION, OPERATIONAL AND DEVELOPMENT ACTIVITIES
barrels of crude oil (daily average:
The Company’s working interests in onshore blocks/fields in Pakistan are as
807 barrels) and 19.83 metric ton
follows::
of LPG (daily average: 0.05 metric
ton) were produced and sold from S. No Name of Block / Field MPCL’s Working Interest Name of Operator
joint ventures during the year,
whereas 13,752 MMSCF of gas (daily 1 Mari Field 100% MPCL
average: 38 MMSCF), 99,870 barrels 2 Zarghun South Field 35% MPCL
of condensate (daily average: 274 3 Sujawal Block 100% MPCL
barrels) and 426,581 barrels of crude 4 Karak Block 60% MPCL
oil (daily average: 1,169 barrels) 5 Ghauri Block 65% MPCL
were produced and sold from joint 6 Sukkur Block 100% MPCL
ventures in the comparative year. 7 Ziarat Block 60% MPCL
8 Harnai Block 60% MPCL
The Company’s customers 9 Peshawar East Block 98.16% MPCL
include Engro Fertilizer Limited, 10 Bannu West Block 55% MPCL
Fauji Fertilizer Company Limited, 11 Block 28 95% MPCL
Fatima Fertilizer Company Limited, 12 Hala Block 35% PPL
Foundation Power Company Daharki 13 Shah Bandar Block 32% PPL
Limited, Central Power Generation 14 Bela West Block 25% PPL
Company Limited, Sui Northern Gas 15 Kohlu Block 30% OGDCL
Pipelines Limited, Sui Southern Gas
16 Kalchas Block 50% OGDCL
Company Limited, Attock Refinery
17 Kohat Block 33.33% OGDCL
Limited, National Refinery Limited,
Directors' Report
Non-Operated Blocks
Well Type Block/Field Status
Qamar X-1 Exploratory Hala Plugged & Abandoned.

Benari X-1 ST2 Exploratory Shah Gas discovery in Lower
Bandar Goru “A” sand.
STATUS OF PLANNED WELLS 2018-19
Bela West Exploratory Bela West As of July 18, 2019, well has
Operated Blocks and D&P Leases X-1 ST-1 been drilled down to the
Well Type Block/Field Status depth of 4,345m.
Togh-1 Exploratory Kohat Achieved TD on July 9, 2019.
18 HRL Wells Development Mari Field Drilling campaign to extend
Preparations are in progress
production plateau of Habib
to test the well.
Rahi reservoir in Mari D&P
Lease has been completed
successfully. WELLS IN 2019-20
Tipu-2 Appraisal/ Mari Field The well was completed Operated Blocks and D&P Leases
Development as a gas producer in Lower Well Type Block/Field Status
Goru B sand reservoir.
Parwaaz-1 Exploratory Mari Field DST results are under valuation. Shahbaz North Exploratory Mari Field Expected to spud-in by
March 2020.
Shaheen-2 Appraisal/ Mari Field The well was completed as a
Development gas producer in SML reservoir. Prospect 3/7, Exploratory Mari Field The well is expected to be
Lower Goru spud-in by April 2020, subject
5th Exploratory Exploratory Sujawal Well deferred because its (Contingent) to de-risking of prospect based
Well associated risks have not yet on on-going studies and firming
been mitigated. up for drilling of well.
Dharian-1 ST3 Exploratory Ghauri Subsequent to oil discovery, Zarghun Development Zarghun Based on interpretation of 2D
the well is on EWT production. South -4 South seismic data, location of ZS-4
Miraj-1 Exploratory Ghauri Drilling is in progress. Field well is expected to be staked
Surghar X-1 Exploratory Karak Well staked on ground on by September/October 2019 to
August 16, 2018 and expected spud-in the well by November/
to be spud-in by May 2020. Well December 2019.
was delayed due to difficult, Surghar X-1 Exploratory Karak Well staked on ground on
rough and rugged terrain for August 16, 2018 and expected
civil works related to wellsite to be spud-in by May 2020.
and access road preparations. Well was delayed due to
Bolan East - 1 Exploratory Ziarat Milestone Oil discovery difficult, rough and rugged
in Chiltan and Moro/ terrain for civil works related to
Mughalkot formations in wellsite and access road
Balochistan Province. preparations.
1st Exploratory Exploratory Bannu Expected spud-in after Miraj-1 Exploratory Ghauri Drilling is in progress.
Well West completion of Zipper-I 1st Exploratory Exploratory Bannu Expected spud-in after
3D seismic data Well West completion of Zipper-I 3D
acquisition, processing, seismic data acquisition,
interpretation and processing, interpretation
firming up of prospect and firming up of the prospect
by June 2020. by June 2020.
Directors' Report
MARI D&P LEASE

Non-Operated Blocks
Well Type Block/Field Status G&G Activities

Pre-Stack Depth Migration (PSDM)
8th Exploratory Exploratory Hala The well is expected to be processing of 1,079 Sq km 3D
Well spud-in during February 2020, seismic data is in progress at M/s
(Contingent) subject to de-risking and due- GRI China and intermediate results
diligence on prospect. of PSTM are under review. Core
Bela West Exploratory Bela West As of July 18, 2019, well has Sedimentology Study at M/s CGG
X-1 ST-1 been drilled down to the UK and Geochemical Study at M/s
depth of 4,345m. Weatherford is in progress in order
to de-risk reservoir distribution at
Togh-1 Exploratory Kohat Achieved TD on July 9, 2019.
SUL, SML, B-Sand of Lower Goru and Mari Deep Central Processing facility - Daharki
Preparations are in progress
Sembar levels in upcoming prospects
to test the well.
before placement of exploratory wells.
study performed at field level, the execution of Annual Maintenance It is worth mentioning that out
Tipu-2 Well most suited option is to connect the Shutdown to avoid any undue down of 19 drilled wells, 12 wells have
Appraisal/development well was well with the PKL-4 existing network. time. As per 2018-19 schedule, already been put on production
spud-in on January 11, 2019 and all the fertiliser customers have after necessary surface facilities
drilled down to the depth of 2,838m Shaheen-2 Well successfully completed their turn of installation.
into Lower Goru Formation to Appraisal/development well was annual maintenance.
appraise the Tipu-1 discovery area spud-in on April 26, 2019 and drilled SCADA/Telemetry System
at Lower Goru B sand reservoir level. down to the total depth of 1,175m Development, Drilling and In order to maintain reliable controls
The well has been completed as to appraise Shaheen discovery area Construction of Production on high pressure wells of Tipu and
gas producer in Lower Goru B-sand at SML and SUL reservoir levels. facility digitised measurement on wellheads
reservoir. The well has been completed as Aiming at extending the production of Bhittai and SML wells in Mari Field
gas producer against SML reservoir. plateau of 650 MMSCFD and to for the gas supplies to Pak Arab
Parwaaz-1 Well Completion Integrity Test has been continue securing the advantage Fertilizers Limited, the project of
Exploratory well Parwaaz-1 was performed while Flow after Flow associated with incremental gas SCADA/Telemetry was considered.
spud-in on March 9, 2019 to test the test will be recorded through in- price, the Company planned to drill The Company initiated in-house
hydrocarbon potential of downthrown house Surface Testing Set-up and additional 19 developmental wells working and devised operational
prospect at SML and SUL reservoir own Slickline unit, resulting in cost (one well in 2017-18 and eighteen philosophy for workable options. Main
levels down to the total depth of savings of approx. USD 100,000. wells in 2018-19) in Habib Rahi project deliverables shall be securing
1,237m. It was the Company’s first Limestone reservoir, along with fully automated ESD philosophy
attempt to explore the hydrocarbon Well Shahbaz North construction of new spur lines and remote control/ monitoring
potential at downthrown fault block in Exploratory Well Shahbaz North in vis-à-vis revamping of existing gas of Tipu wells and production
Mari D&P Lease. Mari D&P Lease is planned to be pipeline gathering network. Drilling facilities at CMF-II along with fiscal
drilled to the target depth of ±1,200 campaign initially planned to be measurements for developing
Well was initially planned for 15 days meters. Long Lead Items have been completed during June 2019 has bifurcation factors against gas
but effective planning and efficient arranged and the well is planned to been completed on April 21, 2019 volumes belonging to different pricing
monitoring has resulted in time saving be spud-in by March 2020. (two months in advance). Besides regimes being handled in one stream.
of 5 days. Based on open-hole logs significant time conservation,
evaluation and MDT, formation was Activities in Mari D&P Lease an amount of approx. USD 10 Keeping this in view, a detailed
perforated and DST was carried out in Maintaining incentive price Million has been saved due to Scope of Work was prepared for
SML formation where gas appeared benchmark has become challenging tangible reduction in rig move and design, engineering, installation and
in small quantity. Due to low volume for HRL reservoir. In this regard, the drilling timings, usage of available commissioning of SCADA/Telemetry
and flowing pressures, various options Company keeps close collaboration inventories from other blocks and Systems at Tipu wells and CMF-
were explored for the final disposal with all downstream fertiliser innovative application of drill bits II. Bids were received against the
of Parwaaz gas. Based on an in-house customers for planning and and mud chemicals. Invitation to Bid and after detailed
Directors' Report
techno/commercial evaluation, ZARGHUN SOUTH D&P LEASE Joint Venture partners. Long Lead compressor and associated facilities
Purchase Order for the project has items have been delivered. Rig Mari-1 submitted by engineering consultant
been issued. G&G Activities is planned to be used for the drilling and same have been finalised after
Seismic data acquisition campaign of ZS-4. due review and optimisation. Design
In order to achieve target timelines, of 102 Line km 2D data over of civil foundations was finalised
project execution firm was followed- Zarghun South discovery area was SUJAWAL D&P LEASE based on soil investigation study and
up for expedited execution of successfully completed by Mari has been incorporated in SOW for
project. Vendor has now completed Seismic Unit Beta Crew on May 25, Activities at Sujawal D&P Lease engaging Civil works contractor.
internal procurement and ordering 2019. The objective of seismic data Sujawal X-1 and Aqeeq-1 wells
of equipment. Detailed meeting acquisition is to place additional were following depletion trends Process for procurement of hook-up
with all stakeholders was held to development wells/sidetrack for and therefore put on compression material for compressor integration
review and finalise control and ESD optimum production as part of field machine in 2017. Likewise, and hiring of services for required
philosophy for Tipu wells and CMF-II development plan. Currently, 2D compression has been planned mechanical, electrical and civil
to be implemented through SCADA processing/ reprocessing of 255 Line for Sujjal-1 well before the natural construction works has been
System. Project ESD philosophy km is in progress at Mari Seismic flow from the well ceases. In this initiated. RFQ for material and scope
and location layout is finalised. Processing Center. Subsequently, regard, compression machine of work for required services have
Contractor has submitted detailed based on interpretation of 2D has been ordered with expected been floated and bid proposals are
FDS document for the project and seismic data, location of ZS-4 delivery in September 2019. IFC awaited. Manufacturer has shared recipe was designed and spotted OPERATED BLOCKS
same is under management review. well is expected to be placed by drawings for ordered compressors Factory Acceptance Test schedule against the perforation interval and
Project is currently in progress as September/October 2019 and and blow-case package have been for the compressor. injected into the formation using Karak Block
per planned schedule in order to accordingly, the well shall be spud-in approved. HAZOP study and review coiled tubing. After clean-up, the Activities at Kalabagh
enhance the redundancy in existing by November/December 2019. activity for compressor installation It is pertinent to mention that drastic well was put on production and Considering anticipated natural
SCADA facility at MDCPF, new at Sujjal Wellhead was conducted decline in production as well as observed marvelous improvement depletion of Kalabagh-1A well,
Human Machine Interface (HMI) ZS-4 development Well in May 2019. The recommendations flowing pressure of Sujawal X-1 in production parameters. Currently, different workable options for
development and existing HMI Planning and designing of of HAZOP activity have been well was observed during March the well is producing 3.1 MMSCFD wellhead compression were devised
upgradation. development well ZS-4 to a target incorporated in piping plan, ESD 2019. As a remedial action based Gas through FEC with 12 BCPD at and based on economic evaluation
depth of +2,200 meters has already philosophy and location layout of on formation lithology, specialised 200 psig wellhead flowing pressure. results, the Company approved the
been carried out and shared with
Directors' Report
Meanwhile, estimated BOQs for MD/4,472m TVD into Khewra successfully with 20” and 13 3/8” with no success. Next attempt was string was pulled out again and
required piping materials have been Formation in ST-3. casing. During the drilling of 17 ½” made with coil tubing equipped with recompleted the well with the option
prepared and bidding process for hole section, high pressure water kick specialised Thru-tubing tools arranged to install the downhole jet pump in
procurement of hook-up material, Based on encouraging wireline was encountered and the well was from UAE and three attempts were SSD again.
consumables and hiring of civil and log results and its integration with successfully killed. As of July 18, 2019, made to retrieve the Jet pump.
mechanical construction contractors drilling and G&G data, perforation 12 ¼” hole section has been drilled However, the same did not work as After successful workover
has been initiated. Equipment delivery zones were selected to test multiple down to the depth of 3,238m (MD). well. operations, the jet pump was
at site is expected by end of July reservoirs. Drill stem testing was Drilling and testing are expected to installed in SSD with slickline in
2019. performed with five arrangements in complete by February 2020. In order to restore the crude oil Rigless mode and well production
all, out of which Khewra formation production from Ghauri X-1, Rig resumed back on January 11, 2019.
4th Exploratory resulted in exposure of crude oil. Activities at Ghauri-X-1 Mari-1 was mobilised to the location It’s pleasing that the well is currently
Well Surghar Prospect The Drill Stem Tests carried out in Ghauri X-1 well is following natural and workover operations were in smooth production and maintains
Extensive planning and designing of Khewra formation flowed 590 BPD depletion gradually and reached executed. During the Rig workover a production rate of 250 BOPD.
installation of compression package deep deviated well Surghar X-1 in Qliq @ 40/64-inch choke size having up to a level of 360 Barrel per day operations, old completion string was
of 4 MMSCFD capacity. Karak Block to a target depth of API gravity of 29° and WHFP 32-61 during first quarter of 2018-19. On pulled out and stuck jet pump was Sukkur Block
± 6,000 meters has already been psi with 60% BS&W. The well has September 14, 2018, the production retrieved from the tubing. Ghauri X-1 G&G Activities
Keeping in view the initially worked carried out and shared with Joint been completed as oil discovery in ceased suddenly, possibly due to was recompleted with conventional M/s SINOPEC has acquired 143 Sq
out long lead time of JV owned Venture partners. Request for Khewra formation. Currently, the problem in installed downhole Jet Bottom Hole Assembly of downhole km 3D seismic data against planned
compressor, it was strategised that quotations for Long Lead Items well is on production. pump. As a remedial action, different jet pump and attempts were made seismic data of 359 Sq km as of July
compressor may be hired on rental has been floated. The initial site scenarios were analysed. An attempt to test the well through jet pump 17, 2019 over Mian Miro Lead to
basis for the initial period until reconnaissance and well staking has The crude oil produced observed was made with slickline to retrieve operations but these attempts were evaluate the hydrocarbon potential
make-to-order machine is delivered. already been carried out. M/s NESPAK with minuscule flowing potential, the Jet pump for inspection purpose not successful. Therefore, completion of Lower Goru sands. The said
Technical and economic evaluation carried out the topographic survey therefore, the well was completed
of bids for rental compressor was of the location and finalisation of with the proactive approach of
carried out which resulted in non- well point is under discussion with JV artificial lift system. In order to
workable options on technical as partner. appraise the discovery and for
well as commercial basis. It was early cash flows, EWT project was
decided to carry out re-bidding for Ghauri Block executed on a fast-track-basis. Civil,
rental-compressor with buy back G&G Activities electrical and mechanical activities
option after JV approval. Detailed Ghauri Joint Venture is acquiring 100 were synchronised and executed
technical evaluation was carried out Sq km 3D seismic data over the Harno in parallel to achieve the target
and based on commercial proposals West Lead to firm-up as prospect timeline. In close co-ordination
of technically compliant bidders, or otherwise. M/s BGP is acquiring with support departments and
comprehensive economic assessment the said 3D seismic data, which is tireless efforts, Early Production
was carried out for different options. expected to complete by August Facilities were installed, tested and
Economic evaluation results were 2019. commissioned within record time of
also presented to JV partners in 15 days from Rig demobilisation. Well
technical workshop. It was approved Processing/reprocessing will be was taken online for EWT on May 20,
by JV Partners in technical workshop followed by interpretation to spud-in 2019 after necessary GoP approvals.
to pursue rental compressor with 4th exploratory well by March 2021,
buy-back option. subject to firming up of the prospect. Miraj-1 Well
3rd Exploratory well in Ghauri Block
LOI for hiring of rental compressor Dharian-1 ST-3 Well was spud-in on May 04, 2019 to
with buy-back option was issued Second exploratory well in Ghauri test the hydrocarbon potential of
to technically responsive and Block was spud-in on December 21, Sakessar and Khewra formations as
commercially lowest vendor. 2017. Multiple drilling and geological primary targets down to the depth of
Engineering consultant has been challenges were encountered during ± 5,270 m into Khewra formation.
engaged for design of compressor drilling of the well. However, the well So far, 26” & 17 ½” hole sections
civil foundations and piping plan. reached its total depth of 4,770m have been drilled and cased off Rig Mari-3 at Dharian-1 Well at Ghauri Block - Punjab
Directors' Report
seismic campaign is expected to exploratory well by June 2020, which NON-OPERATED BLOCKS Bela West Block drilling and testing of well are by September/October 2019. Based
complete by August 2019. is subject to completion of Zipper-I Bela West X-1 ST-1 Well expected to complete by August/ on the results, first exploratory well
data acquisition as per stipulated Hala Block The first exploratory well in September 2019. is expected to be placed by August
Processing will be followed by timelines. Qamar X-1 Well Bela West block was spud-in on 2020.
interpretation to spud-in exploratory Exploratory well in Hala Block November 26, 2018 to test the Kalchas Block
well during February 2021, subject to 3D and 2D seismic data processing/ was spud-in on June 28, 2018. The hydrocarbon potential of Branguli G&G Activities Kohat Block
firming up of prospect at Lower Goru reprocessing is in progress at M/s well was drilled down to the total and Panjgur formations down to 128 Line km 2D seismic data has Togh-1 Well
level. GRI China. In addition, keeping depth of 4,607m. Based on wireline the total depth of ±5,000m (MD). been acquired by OGDCL’s seismic 3rd exploratory well in Kohat Block
in view the complexity of the logs data, DST was conducted in Currently, 8-3/8” hole of ST-1 has crew as of July 17, 2019 against was spud-in on March 30, 2019
Ziarat Block area, parallel processing at Mari Massive Sand. Due to discouraging been drilled down to the depth of the planned acquisition of 306 to test the hydrocarbon potential
Bolan East-1 Well Seismic Processing Center is also results, the well was plugged and 4,345m as of July 18, 2019. The Line km firm and 119.5 Line km of Lumshiwal (primary) and
Exploratory well Bolan East-1 in continued. The objective of parallel abandoned. contingent 2D seismic data as a Lockhart & Samanasuk (secondary)
Ziarat Block was spud-in on May 22, processing is to identify processing part of commitment. The objective Formations. The well has been
2018 and Bolan East-1 ST 1 reached complications in advance for timely Shah Bandar Block of data acquisition is to firm up drilled down to the planned final
total depth of 1,500m as on August interaction with M/s GRI to resolve Benari X-1 ST-2 Well identified two subsurface and depth of 3,200m. Preparations are
06, 2018 into Chiltan formation. issues for desired data quality. The first exploratory well in Shah one surface leads as prospects in progress to test the well. Testing
Based on the interpretation of Bandar Block was spud-in on May or otherwise. The said acquisition of Togh-1 well is expected to
wireline logs and its integration with 1st Exploratory Well 22, 2018 to test the hydrocarbon campaign is expected to complete complete by August 2019.
drilling data, Drill Stem Tests carried Planning and designing of vertical potential of Upper and Massive
out in Chiltan Formation flowed 810 exploratory well in Bannu West sands of Lower Goru formation
barrels per day of 15.6º API gravity block to the target depth of ±5,990 and drilled down to the total depth
oil with WHFP of 134-167 psi @ meters has already been carried of 3,470m MD/3,221.7m TVD. The
32/64-inch choke size. The Drill Stem out and approved. Long Lead items well has been completed as gas
Tests carried out in Moro/Mughal Kot have already been delivered. Well is discovery against Upper Goru “A”
Formation also flowed 690 barrels planned to be spud-in by June 2020. sand level.
per day oil of 15.6º API gravity oil
with WHFP of 142-158 psi @ 32/64- Block 28
inch choke size during pre-acid well G&G Activities
test operations. Subsequent to completion of
Zarghun South 2D seismic project,
The said discovery is unique as it is Mari Seismic Beta Crew is being
the first ever oil discovery in Chiltan mobilised to Block-28 to acquire
and Moro/Mughalkot formations in 1,487 Line km (900 Line km firm
Balochistan province and considering and 587 Line km contingent) 2D
that there is no oil being produced in seismic data. Upon completion of
Balochistan presently. seismic campaign and processing,
interpretation & integration of all
Bannu West Block technical data, high-ranked prospect
G&G Activities will be drilled as first exploratory
Despite security and terrain related well in December 2021 as part of
challenges, MSU Alpha Crew has commitment. However, best efforts
acquired 420 Sq km 3D data as are being made to fast track the
of July 17, 2019 against planned plan and accordingly, 1st exploratory
seismic data of 640 Sq km in Zipper-I. well is expected to be spud-in by
The said acquisition will be followed end year 2019-20, subject to timely
by processing and interpretation completion of 500 Line km 2D
for firming up identified leads as seismic over Chakar Lead, timely
drillable prospect or otherwise security provision and firming up of
in order to place 1st committed prospect. Rig Mari-3 at Dharian-1 Well, Ghauri Block
Directors' Report
MARI SERVICES DIVISION (MSD) was raised at the beginning of 2019

MSD, with its state of the art and awarded Zarghun South-2D as
technology drilling rigs, 2D/3D its maiden project. Crew mobilised
seismic data acquisition unit, 2D/3D on February 05, 2019 and project
seismic data processing unit along was completed on May 25, 2019
with AVO Inversion services, is with speed and accuracy. The
providing world class services as project was executed in rugged
per international oilfield standards mountainous terrain/security
requirements especially in security sensitive zone of Balochistan. Beta
sensitive areas, and is well poised Crew is currently being mobilised to
to cater for growing services Block-28 for acquisition of 1,487 Line fast turnaround requirements are
requirements in future. Km 2D data. the cornerstone of MSPC’s excellent
performance.
Mari Seismic Services Unit (MSU) Mari Drilling Services Unit (MDU)
Alpha Crew MDU operates three drilling rigs During 2018-19, MSPC completed
MSU Alpha Crew has successfully including Rig Mari 1 (1,500 HP) with a the PSTM processing of Sukkur-
completed four projects including drilling capacity of 5,000 meters, Rig 2D (2,700 Line km), Bannu-West
EXPLORATION PORTFOLIO farm-in and evaluation of new to evaluate and recommend best two 3D and two 2D projects. Mari 2 (Sky Top) Brewster (300 HP) 2D (99 Line km), Ghauri-3D (275
EXPANSION - LOCAL & areas for upcoming bidding international opportunities in preferred Completion of these projects in with drilling capacity of 1,200 meters Sq km), PSDM processing of Mari-
INTERNATIONAL round is continued. regions of the world. unprecedented record time coupled and Rig Mari 3 (2,500 HP) with 3D (1,080 Sq km) and Mari-3D
In order to achieve long term with acquisition of top-quality capacity to drill down to phenomenal pre-stack inversion (1,080 Sq km).
sustainability, growth and to target O Application for New Blocks: Keeping in view the above, the data gives MSU a boost to capture depth of 8,000 meters. Rig Mari 3 Currently, MSPC is working on timely
the replacement of depleting A new application namely; Company has evaluated good the local E&P market. Currently, is currently drilling Miraj-1 well in processing of Bannu West-3D (850
reserves, MPCL is aggressively Zarrar Block (2267-3) for grant opportunities and matured them Alpha Crew using Sercel 508 XT Ghauri block. Sq km) and Zarghun-2D (255 Line
pursuing expansion of its exploration of EL in Indus Offshore has been for possible farm-in/acquisition. is acquiring 640 Sq km of 3D data km).
portfolios, both locally as well as submitted on March 28, 2019 However, these opportunities after acquiring 98.75 Line km 2D Mari Seismic Processing Services
internationally. Outlook of acreages over an area of 2,424.8 sq.km. couldn’t materialise due to foreign data in Bannu West block. Despite Center (MSPC) INDUSTRIAL RELATIONS
being pursued is given as below: exchange constraints. As a part of said challenging security environment MSPC was established in 2014 for The working environment and
O Bidding Round 2018: Final PCAs pursuance and blocks evaluation, the in terror-stricken zone of North providing in-house data processing overall industrial relations climate
Portfolio Expansion and Corporate Guarantees of Company is proposing a prospective Waziristan Tribal District, the project facility to MPCL. remained cordial at all locations of
O Bela West (25%): DGPC has Taung and Wali West blocks have farm-in opportunity in Iraq for possible is well underway and is likely to be the Company including Mari Field.
approved assignment of 25% been submitted to DGPC on June acquisition of working interest and completed by December 2019. MSPC has completed around Recreational and motivational
working interest from M/s PPL 28 and July 4, 2019, respectively. producing oil fields & exploration 5,500 Line km 2D, 3,164 Sq km activities at these locations helped
to MPCL on January 28, 2019. Signing ceremony of aforesaid assets in Tajikistan for which visit Beta Crew 3D and 3,600 Sq km 3D seismic in improving workplace harmony
However, signing of DOA is in PCAs will be held shortly. of data room and field has been To expand MSU’s seismic data inversion projects. Aggressive and were very well received by the
process. requested for due-diligence and acquisition capacity, MSU Beta Crew exploration strategy of MPCL and employees.
INTERNATIONAL prudent decision-making.
O Sukkur Block (41.2%): DGPC has BLOCKS EVALUATION
approved assignment of 41.2% The Company is continuously In addition, active bidding rounds in
working interest from M/s PEL evaluating selected International Gabon, Congo, Madagascar, Ghana,
to MPCL, while signing of DOA is Blocks/Countries for possible farm- Sudan, Egypt, Abu Dhabi and Uganda
in progress. in opportunities and acquisition of were also evaluated for possible
blocks via bidding rounds. During acquisition of overseas blocks and
Local Blocks Evaluation the last two years, the Company has producing assets.
O Evaluation of Blocks: Data identified and evaluated several good
review and due-diligence opportunities in different countries Moreover, PPL has also approached
on prospective blocks with and established a sound knowledge MPCL to evaluate the possibility for
different E&P Companies for with large data bank and is now joint bidding in ADNOC Bid Round
expansion of portfolios through equipped with a dedicated team 2019.
Directors' Report
the art 2D and 3D data processing HEALTH, SAFETY AND

services, that help the Company ENVIRONMENT (HSE)
take technically more cognisant Devoted and committed leadership,
decisions. Its scalable infrastructure management’s commitment and
enables it to employ latest participation by all employees to
geophysical technology across the implement HSE management system
full spectrum of seismic imaging across the company continued
and reservoir characterisation. during the 2018-19. Demonstrating
Expansion in MPCL’s exploration visible, caring and felt leadership is
activity demanded an increase in a key enabler towards achieving our
MSPC’s computation capabilities. HSE objective of “no harm to people
The system has been upgraded to and environment”. Implementing
high computational power which a robust HSE Management system
enabled MSPC to provide depth is vital to improving our HSE goals, The key principles for environmental the monitoring of environmental Key
and time processing services with objectives and performance. management at MPCL are a Performance Indicators is embedded
HUMAN RESOURCE interpretation and reservoir improved quality and in reduced precautionary approach and an active in standardised reporting processes
DEVELOPMENT modeling software suites developed time. With this upgradation, MSPC During FY 2018-2019, the Company management oriented to minimise on an annual and monthly basis and
Success of E&P companies by renowned companies like will be able to handle multiple 2D achieved lowest ever “Total environmental impact. Environmental ensures compliance with the national
indisputably lies in the quality of Schlumberger and Halliburton. and 3D time and depth projects Recordable Case Frequency” in issues are managed vertically environmental quality standards
their human resource. MPCL’s most Integrated workflows provide simultaneously. its history (TRCF 0.09 against the and horizontally across the whole (NEQS).
valuable intangible but indefatigable geophysicists and geologists with maximum target of 0.40). This is a organisation. They are considered
asset is its human capital. Human critical collaborative capabilities that Accurate and quality data distinguished accomplishment in at specific steps in the decision- MPCL contractors and suppliers
Capital is not just the number of yield better geological insights. These availability is the lifeblood of E&P a hazard prone industry, and was making processes at corporate also have to agree to MPCL’s
people working in an organisation; systems help improve discoveries companies. They need to handle made possible by adherence to level as well as in the different Code of Conduct and, hence, the
rather, it is a fine blend of their success rates and makes the large data volume for analysis, HSE standards and practices by the businesses. At the corporate level, environmental standards of MPCL.
experience, attitudes, abilities, Company well distinguished in the correct selection of drilling targets employees at all levels and locations
culture and skills etc. The Company E&P sector. and efficient management of oil despite challenging terrains and
makes all out efforts to provide and gas producing reservoirs. harsh environmental conditions.
conducive working environment to High-performance systems and Effective E&P data management
increase the efficiency graph of the infrastructure are a prerequisite plays a crucial role in meeting Impact of the Company’s Business
employees with a view to optimising for G&G software/applications that these objectives. Implementation on the Environment
on its fortes and projecting its repute require huge capital investment. of state of the art integrated E&P MPCL as a major E&P company has
Country wide. Virtual Desktop Infrastructure (VDI) data management system has a critical role in the society and
System has been indigenously led MPCL to the introduction and economy. E&P is a high risk business
INFORMATION TECHNOLOGY designed and implemented by adoption of industry’s best practices in respect of safety, and has directly
The Company strongly focuses on in-house IT team for G&G and regarding standardised data and indirectly, major impacts on the
increased collaboration between its reservoir engineering applications. management related workflows in environment. MPCL has obtained
technical and other functional areas, This enabled the Company to save the Company. The system is helping International Standard ISO 14001
which helps steer the selection and capital investment on costly high-end exploration, operation and reservoir (Environment management System)
implementation of its information workstations hardware. The system professionals for effective planning, since 2007 and the Company takes
systems. The latter provides greater has boosted centralised processing coordination and timely decision- its environmental responsibilities
integration amongst cross-functional capability for the high performance making during E&P related lifecycle. very seriously. An environmental
teams to induce effective planning, demanding technical software study is always carried out for
coordination and decision making application and made the Company The Company is also making all proposed operations such as
during various E&P related activities. pioneer in implementing VDI extensive use of information seismic, drilling or plant operations.
infrastructure in local E&P Industry. technology in other functions of the Survey reports are also sent to the
Our Exploration and Reservoir Company including processing of regulatory authorities throughout the
departments use industry leading MSPC is playing a vital role by financial data and procurement/HR duration of the projects and all legal
Geological & Geophysical (G&G) providing high quality and state of records records through SAP. obligations are strictly adhered to.
Directors' Report
To achieve Internal Control e) Monitoring: Internal Control designed to provide reasonable

Framework objectives, following Systems is monitored by Internal assurance with respect to recording
Internal Control components are Audit Department. This process and providing reliable financial and
assessed and evaluated by Internal assesses the quality of Internal operational information, complying
Audit Department: Control Framework in place. with applicable laws, safeguarding
assets from unauthorised use,
a) Control Environment: It sets the In addition, Internal Audit also executing transactions with
tone of Company and influences undertakes special tasks as proper authorisation and ensuring
the control consciousness of and when directed by the Audit compliance with corporate policies
personnel. It is the foundation of Committee of the Board. Internal and controls.
CORPORATE SOCIAL education, health and water related Internal Audit Function is an all other components of Internal Audit plays a central role in
RESPONSIBILITY (CSR) projects, in and around its areas of independent assurance and Control providing discipline and highlighting weaknesses in the Based on the framework of IFCs
MPCL’s CSR programme is distributed operations. consulting activity, designed to structure; existing system and processes established and maintained by
into four major categories: add value and improve MPCL’s and identifying implementation the Company, work performed by
Social Welfare Obligations for FY operations. It helps the Company b) Risk Assessment: Management of effective controls needed to the internal and external auditors
O Annual CSR Obligations 2018-19 have been deposited into accomplish its objectives by of Company is responsible strengthen the overall control and the reviews performed by
(Commitment as per Petroleum the respective Joint Accounts being bringing a systematic and for ensuring adequate risk system. Management and the relevant
Concession Agreement (PCA)) maintained with the concerned disciplined approach to evaluate identification and analysis of Board Committees, including the
Local Administrations, as per the and improve the effectiveness of relevant risks to achieve Internal Access of Head of Internal Audit Audit Committee, the Board is of
O Additional Work - Over & above
PCAs. risk management, control, and Control Framework objectives; to Audit Committee the opinion that the Company’s
Obligations
governance processes. In accordance with the requirements IFCs were adequate and effectively
O CSR at Mari Field Daharki INTERNAL CONTROLS c) Control Activities: These are of the Regulations, the Head of implemented during financial year
Objectives of MPCL’s ‘Internal the policies and procedures Internal Audit has direct and 2018-19.
O Production Bonus (funds Internal Control Framework and Control Framework’ are: that help ensure Management unrestricted access to the President
allocated / deposited for Social Role of Internal Audit directives are carried out and other members of the Audit Directors’ Responsibility in
a. Effectiveness and efficiency of
Welfare Schemes, maintained In compliance of requirements effectively; Committee. respect of Adequacy of Internal
operations;
with the concerned Local of Listed Companies (Code of Financial Controls
Administration) Corporate Governance) Regulations, b. Reliability of internal / external d) Information and Communication: Comments in Respect of The Board of Directors of the
2017, (the Regulations) the Board of reporting; Pertinent information is Adequacy of Internal Financial Company is responsible for
2018-19 – At a Glance Directors of the Company has set identified, captured and Controls (IFCs) ensuring that IFCs have been
c. Compliance with laws, rules and
During 2018-19, MPCL’s CSR strategy up an Internal Audit function, which communicated in a structured The Company has a comprehensive properly designed and implemented
regulations; and
remained focused on provision is headed by Head Internal Audit form and time frame that IFC framework, commensurate with in the Company and that such
of quality service delivery to its who functionally reports to Audit d. Safeguarding of Company’s enables people to carry out their the size, scale and complexity of its controls are adequate and
communities and sustainability of Committee of the Board of Directors. assets. responsibilities; and operations. The framework has been operating effectively.
Directors' Report
enterprise-wide risk management A dedicated ERM Department and governance risks faced by MPCL was granted Development
methodology to ensure a proactive, at MPCL ensures smooth and the organisation while trying to & Production Lease over Sujjal-1
adequate and holistic approach to streamlined implementation of ERM achieve its business and strategic discovery.
risk management. across the organisation, and to goals. The risks are classified based
provide risk-related advice, guidance on likelihood and impact, and Sufficient exploration acreage is
MPCL’s risk management programme and support to the departments. appropriate mitigation measures crucial to carry out aggressive
ensures that the following core Implementation is further facilitated are established. Significant risks to exploration to increase production
principles are adhered to: through identification and Company’s strategic objectives are and arrest the depletion of reserves.
O Clear assignment of engagement of Risk Champions monitored and reported to BDERC. MPCL acquired additional working
responsibilities and within each department, who interest share from PEL in Sukkur
accountabilities; support risk and control owners, and COMPANY’S BUSINESS Block (41.1765%), MOL Pakistan
promote risk initiatives within their in Ghauri Block (30%) and is in the
O Standardised enterprise-wide
teams. Principal activities and the process of acquiring 25% working
risk management framework and
development and performance of interest in PPL’s Bela West Block.
processes;
Company’s Risk Framework the company’s business during In the last bidding round held by
O Identification and management
ment The settin
ssetting
etting
g up of the
the overall
ove ERM
ERM the financial year the Government
Gover ment of Pakistan,
Govern Pa
akista n, MPCL
stan, MP
hat
of uncertain future events that Framework
Fr
Frame workk at MMPCL
MP CL was sup supported
ppoported The Company
Compan
m y is principally engaged
e
engageded bids were successful
uccessful for acquisition
suc acquisitio
acqui ition
The controls, based on the prevailing operations. The state-of-the-art ERP may influence achievement of by i-Risk Group, a UK-based ERM M in exploration, production and nd sale of exploration
exploration rights
ri in Wali West
business conditions and processes, solution (SAP) has inbuilt controls business plans and strategicc consultancy
consu
onsultanc
ltancyy and prov
provider
ider of risk
ri of hydrocarbons.
hydrocarbons
b . The recovery ofof Block
ock (100%)
(10 %) and
(100 d Taung g Block
c (60%
Block (60% %
have been tested during the year including authorisation controls. This objectives; management
m
manag ement ssolutions.
ment solu ons.. MPCL’s
tions MPCL’’s risk
M oil prices in 2018-19 has provided
prov
vided with
w operatorship).shiip). MPCL currently
operatorsh
and no reportable material weakness further enhances control environment O Integration of risk management
ment management
managemen
manag ement approach
approach is base based
ba sed impetus for growth to the E&P & holds sizable acreages under
in the design or effectiveness and provides seamless exchange of activities within the Company’s
ny’s on ISO 31000:2018,
IS 31000:20
31000:2018,
18, which
w provides industry and has also positivelyy exploration
exploratio
explo n and production
ration productio
prod uctionn in all
all the
was observed. The framework on information with access controls. In decision-making processes. guidance
guida nce for identifying
for ident
id entifying top strategic, impacted
impac ted MPCL
MPCL inin the form
fo
o of higher
higher
gher
gher provinces
proviv nces and
ovinces d erstwhile
nd
n e t ile federally
erstwh
rst
rstwh
stw federa
fede
edeerally
lly
IFCs over Financial Reporting has addition, the Company has a Whistle financial, operational, compliance
l, c
compli
ompliian
ance
ancnc revenues.
reven ue During
nues. During the year
ea 2018-19,
2018
201
20
018
0 18-19,
19,
19
19, administered
admin
a
adm
dmin
m iister
ter d areas.
e ed arreas.
eas
as
as
been reviewed by the internal and Blower’s Policy to address fraud and The Company’s Board of Directors orss
external auditors. other wrongdoings at workplace. is responsible for the governancece of
risk, for determining the Company’s
ny’s
Internal Control System As part of risk mitigation, the system level of risk appetite and tolerance,
nce,
The Company has well-founded of internal controls is reviewed on and establishing risk management ent
system of internal controls including an ongoing basis and necessary policies and framework. This is
IFCs over Financial Reporting that improvements are affected to executed through risk management ment
facilitates efficiency, reliability align with the changing business and governance infrastructure/
and completeness of accounting requirements. architecture, which includes Board’s
ar s
ard’
records and timely preparation of Diversification and Enterprise Risk
sk
reliable financial and management ENTERPRISE RISK MANAGEMENT Committee (BDERC). The BDERC
information. The internal control Managing risks is recognised as a is responsible for the oversight
system ensures compliance with key priority for MPCL’s business of risk and is, amongst other
all applicable laws and regulations, performance and corporate things, responsible for ensuring
promises optimum utilisation governance, and one that supports the adequacy, robustness and
of resources and protect the the achievement of organisational effectiveness of risk management nt
Company’s assets and stakeholder's objectives. The Company’s risk policies and processes. The Audit it
interests. management strategy is to create Committee through the Internal Audit
Audiit
a positive risk culture throughout Department holds the responsibility
bility
The Company has a properly laid the organisation and to integrate for assessing the efficiency and
down organisational structure and risk management into activities effectiveness of the risk management
ement
system of documenting processes, at all levels of organisation, from systems in place and undertaking ng
in form of Management System enterprise level activities such as the independent review of the risk
Procedures, to ensure orderly and strategic planning to business unit mitigation plans, which have been en
efficient conduct of its business processes. The Company adopts an designed for material risks.
Directors' Report
upheavals and a market where petroleum inventories are lower than average,
and OPEC spare crude oil production capacity is low. On the contrary,
downside price risks are mainly linked to the demand side, as economic
growth could be lower than expected and as a result it can cause a downward
trend for oil demand, growth and prices.
As far as petroleum-related policies and regulations are concerned, MPCL did

not face any significant changes in the year 2018-19.
Any changes that have occurred The Company is considering various Principal risks and uncertainties Future prospects of the Profits
during the financial year options for low BTU gas. As an facing the Company For MPCL, sustainable growth and increase in profits is projected in
concerning the nature of the option, the feasibility study on MPCL’s principal risks and foreseeable future. Moreover, the acquisition of new blocks as well as
business of the company MPCL’s proposed power project has uncertainties emanate from reserves additional interests in exploration/production blocks having good prospects,
There were no significant changes been completed and the Company depletion which has been addressed as well as evaluating other possible opportunities of high reward frontier
to affect the nature of the aims to obtain the requisite by increasing the plateau period exploration acreages both locally and internationally will help in increasing the Chairman of the Board other than
Company’s business during the regulatory approvals during the next for the next four years. Other risks reserves and enhancing the production revenues and returns in the long-term. the CEO
financial year under review. fiscal year. Much needed diversified include fluctuating crude oil prices Lt Gen Syed Tariq Nadeem Gilani
income stream to the Company and external regulations related to Furthermore, the recovery of oil prices which are projected to not sink to (Retd) is the Chairman of the Board,
Main trends and factors likely to will be ensured by the timely oil and gas sector. Lack of significant 2015 levels in at least the next few years, would increase the cash flow of the while Lt. Gen Ishfaq Nadeem Ahmed
affect the future development, completion of MPCL’s power project. gas discoveries during the past Company with incredible opportunity to hedge, diversify and expand portfolio (Retd) is the Managing Director/
performance and position of the The Company is also evaluating the decade in Pakistan has resulted in by reinvesting these increased cash flows into prospects that will eventually CEO of the Company. Therefore,
company’s business potential of venturing into mid- a sharp decline in the remaining provide a robust and sustainable returns for the shareholders. the positions of the Chairman and
The Company is constantly stream and down-stream sector. reserves of natural gas, which is the CEO are held by two different
looking for potential business “Fauji Consortium” comprising of the mainstay of our indigenous CORPORATE GOVERNANCE individuals.
prospects to hedge itself against Fauji Foundation, Fauji Fertilizer energy production. One of the major
the pricing risks that are faced Company Limited and MPCL has contributing reasons is the lack of Board Structure The names of the persons who, at
by the E&P sector as a whole. submitted Expression of Interest access to new exploration areas S.No Directors * Category any time during the financial year,
As a result, the Company is and Request for Proposal for the because of security related issues were directors of the company
Representing Fauji Foundation
exploring avenues in the energy Machike-Thallian-Tarru Jabba White which results in delay in acquiring O Mr Qaiser Javed
1. Lt Gen Syed Tariq Nadeem Gilani (Retd) Non-executive director
sector that can add value to the Oil Pipeline project being undertaken seismic data and also in drilling
2. Lt Gen Ishfaq Nadeem Ahmad (Retd) Executive director O Brig Raashid Wali Janjua (Retd)
Company while allowing the by Frontier Oil Company-1/Frontier activities. Like all E&P companies
3. Dr Nadeem Inayat Non-executive director
Company to avoid price related Works Organisation. in Pakistan, MPCL is also facing O Qazi Mohammad Saleem Siddiqui
4. Maj Gen Javaid Iqbal Nasar (Retd) Non-executive director
risks. Moreover, the Company this challenge and needs access to O Eng. S.H. Mehdi Jamal
5. Mr Rehan Laiq Non-executive director
is also looking for acquiring In the wake of developments which additional acreage for potential new
6. Syed Iqtidar Saeed Non-executive director O Mr Manzoor Ahmed
acreages in the international have taken place after Paris Accord, discoveries to reverse the reserves
market and is working on leads MPCL is looking into the changing depletion trend. Representing Government of Pakistan O Mr Abdul Jabbar Memon
that can generate revenues for trends of the E&P sector and is 7. Mr Asad Hayaud Din Non-executive director
the Company beyond national aware of the changing dynamics of In global oil pricing, volatility is the 8. Mr Sajid Mehmood Qazi Non-executive director COMMITTEES OF THE BOARD OF
boundaries. Apart from the global oil industry. MPCL remains name of the game and crude oil 9. Mr Shahid Yousaf Non-executive director DIRECTORS
Government owned OGDCL, MPCL committed towards long-term prices are driven by geo-political Representing OGDCL The Board of Directors of the
is the only fully integrated E&P investment in avenues that can help situation. All forecasts worldwide 10. Mr Zahid Mir Non-executive director Company oversees the operations
Company in Pakistan with its in protecting the global environment are based on certain assumptions 11. Mr Ahmed Hayat Lak Non-executive director and affairs of the Company in an
own drilling and seismic services and adapt itself to the changing which may or may not hold true in Representing General Public efficient and effective manner. For
capability for greater flexibility and context hand-in-hand with the global the future. According to independent 12. Mr Adnan Afridi Independent, non-executive director the sake of smooth functioning,
profitability. Additionally, we do community. At national level, MPCL’s analysts, Brent spot prices will be 13. Ms Ayla Majid Independent, non-executive director the Board has constituted four
have a unique security apparatus contribution to the agricultural in the range of $65-$75 per barrel committees. These committees are
which helps us to venture in economy is very pivotal as it in 2019-20. Upside price risks are * Presently, MPCL Board comprises of 12 male directors and 1 female director. entrusted with the task of ensuring
areas where other companies are provides gas as raw material for over largely related to the possibility Moreover, there are 10 non-executive directors, 2 independent non-executive speedy decisions relating to their
hesitant to operate. 80% of urea produced in the Country. of supply outages amid political directors and 1 executive director. respective domains.
Directors' Report
Audit Committee ANNUAL EVALUATION OF Directors with an opportunity standard deviation is less than 1,
THE PERFORMANCE OF THE to reflect upon their own then there is unanimity in board
Composition
BOARD, BOARD’S COMMITTEES competencies, their role, behavior, opinion. If the value is more than 1,
Audit Committee of the Board currently comprises of the following directors:
AND INDIVIDUAL DIRECTORS contributions and performance as the opinion of Board is dispersed
Director Designation
ALONG WITH DESCRIPTION OF Member of the Board. against that performance factor.
Ms Ayla Majid President CRITERIA USED
In line with the requirements In addition to the identified Results of Evaluation
(independent, non-executive director)
of clause 10(3)(iv) of the Listed factors, Directors can also provide for FY 2018-19
Mr Adnan Afridi Member
Companies (Code of Corporate their subjective comments in Board Evaluation for the year 2018-
Mr Rehan Laiq Member
Governance) Regulations 2017, a the Comments Section of the 19 revealed that the mean value
Mr Shahid Yousaf Member
formal and effective mechanism is Templates. against all performance factors
Mr Ahmed Hayat Lak Member
in place for annual evaluation of the was above 3, which showed that
Board’s own performance, Members Board Evaluation Template and in the opinion of the Directors, the
Technical Committee
of the Board and of Board’s Individual Director’s Template are composition and performance of
Composition Committees. forwarded to all Board Members, the Board and overall governance
Technical Committee of the Board currently comprises of the following while Committees Evaluation of the affairs of the Company
directors: Mechanism for Board’s Self Template is forwarded to Members was satisfactory and the value
Director Designation Evaluation was approved by MPCL of the respective Committees. The of standard deviation was less
Board in its Meeting held on Directors are requested to rate than 1 against all Performance
Syed Iqtidar Saeed President September 30, 2014. The approved each Factor on a scale of 1 to 5. The Factors showing unanimity in the
Mr Rehan Laiq Member Board Performance Evaluation scores are consolidated through a opinions of the Directors against
Mr Shahid Yousaf Member Template contains 36 Performance specially designed programme and these factors except; (i) Proportion
Mr Zahid Mir Member Factors covering areas such as Mean Values, Standard Deviations among independent directors and
Mr Sajid Mehmood Qazi Member Composition of the Board and and Bar Charts for each factor are non-independent directors and
its Committees, Functions and calculated. (ii) representation from minority
HR and Remuneration Committee Performance of the Board and its shareholders on the board.
Composition Committees, Governance Structure As per the methodology, if

It is clarified that the Company has
HR and Remuneration Committee of the Board currently comprises of the and Practices, and Company the mean value against any
obtained a Relaxation from SECP
following directors: Performance Monitoring System. performance factor is less than 3,
regarding number of independent
it needs improvement. If the mean
directors till reconstitution of the
Mechanism for Board’s Committees’ value is above 3, the performance Board in 2022. Hence, the issue of
Evaluation was approved by MPCL Factor is acceptable. Further, independent directors will be duly
Mr Adnan Afridi President
Board in its Meeting held on the standard deviation indicates addressed at that time. Similarly,
(independent, non-executive director)
April 16, 2018. Committees’ Self the degree of dispersion in the currently there are two directors
Maj Gen Javaid Iqbal Nasar (Retd) Member
Evaluation Template consists of 15 opinion of Board Members against on the Board representing minority
Performance Factors pertaining to any specific factor. If the value of shareholders.
Ms Ayla Majid Member
the Composition of the Committee,
Mandate and Functioning of the
Diversification & Enterprise Risk Management Committee
Committee, Role of Committee’s
Composition Chairman, General Atmosphere
Diversification & Enterprise Risk Management Committee of the Board and Contribution of Committee
currently comprises of the following directors: Members.
Mechanism for Individual Directors
Dr Nadeem Inayat President (non-executive director) Evaluation was approved by MPCL
Syed Iqtidar Saeed Member Board in its Meeting held on May
Mr Rehan Laiq Member 31, 2018. Individual Director’s Self
Mr Sajid Mehmood Qazi Member Evaluation Template consists of 24
Mr Zahid Mir Member Performance Factors which provide
Directors' Report
Committees’ and Individual Directors Governance) Regulations 2017, a MANAGEMENT’S RESPONSIBILITY cease operations, or has no realistic & Co as auditors of the Company for the financial year 2019-20. The
Evaluation revealed that the mean Directors’ Remuneration Policy was TOWARDS THE PREPARATION alternative but to do so. recommendation of the Audit Committee was endorsed by the Board of
value against all performance factors approved by the Board in 171st AND PRESENTATION OF THE Directors.
was above 3, which showed that Board Meeting held on April 16, FINANCIAL STATEMENTS CODE OF CORPORATE
in the opinion of the Directors, the 2019. As per the approved Policy, The Management is responsible for GOVERNANCE (CCG) ACKNOWLEDGEMENT
composition and performance of non-executive directors are entitled the preparation and fair presentation The Securities and Exchange The Board of Directors would like to express its appreciation for the efforts
Committees and contribution of to receive a fixed fee for attending of the financial statements in Commission of Pakistan (SECP) has and dedication of all employees of the Company, which enabled the
each individual director in the Board each Board and Committee meeting. accordance with the accounting and issued Listed Companies (Code of Management to run the Company efficiently during the year resulting in
and respective Committees was The fee is determined by the Board reporting standards as applicable in Corporate Governance) Regulations, uninterrupted production and supply of hydrocarbons to its customers. The
satisfactory. The value of standard and revised from time to time. Pakistan and the requirements of the 2017 (the Regulations) to establish Board also wishes to express its appreciation for continued assistance and
deviation was less than 1 against No fee is paid to the executive Companies Act, 2017 and for such a framework of good corporate cooperation received from the local administration at Daharki as well as at all
all Performance Factors showing directors. Further, no fee is paid to internal controls as Management governance whereby every listed the other locations, Provincial Governments, various departments of Federal
unanimity in the opinions of the the Directors for attending General determines are necessary to company is managed in compliance Government especially the Ministry of Energy, Ministry of Finance, Oil and Gas
Directors on each factors. Meetings of the Company. No extra enable the preparation of financial with the best practices. Regulatory Authority, Directorates of Petroleum Concessions, Oil and Gas, Fauji
payment is made on account of statements that are free from Foundation, Oil & Gas Development Company Limited and law enforcement
All the results of the evaluations being an Independent Director, material misstatement, whether due The Company makes every effort agencies.
along with suggestions/comments Chairman of the Board or President to fraud or error. to achieve full compliance with
of the Directors were presented to of a Committee. When on Company the Regulations. The Statement For and on behalf of the Board
the Board’s HR&R Committee in its business, all directors are also In preparing the financial statements, of Compliance with the Listed
meeting held on July 25, 2019 and entitled to receive travelling and the Management is responsible for Companies (Code of Corporate
subsequently to the Board in its daily allowances as per approved assessing the Company's ability Governance) Regulations, 2017
178th meeting held on July 30, 2019. relevant Policy. to continue as a going concern, prepared by the Board of Directors is
disclosing, as applicable, matters reviewed and verified by the External
DIRECTORS’ PATTERN OF SHAREHOLDING related to going concern and using Auditors of the Company on the basis
REMUNERATION POLICY A statement showing the pattern of the going concern basis of accounting of documentary evidence.
In line with Clause 17 of the Listed shareholding as at June 30, 2019 is unless Management either intends
Companies (Code of Corporate provided on pages 125-129. to liquidate the Company or to EVENTS AFTER THE STATEMENT Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid
OF FINANCIAL POSITION DATE Managing Director/CEO Director
The Board of Directors in its meeting
held on July 30, 2019 have proposed Islamabad
(i) final cash dividend for the year July 30, 2019
ended June 30, 2019 @ Rs 2.0 per
share, and (ii) issuance of Bonus
Shares in ratio of one share for every
ten shares held (i.e. 10%), for approval
of the members in the Annual General
Meeting.
EXTERNAL AUDITORS
The present auditors, M/s Deloitte
Yousuf Adil, Chartered Accountants,
will retire and being eligible,
have offered themselves for re-
appointment as auditors of the
Company.
The Audit Committee considered

the appointment of auditors and
recommended M/s A.F Ferguson
Events after the Geographical Presence

MPCL CONCESSIONS AND WORKING INTEREST
Statement of Financial Position Date
LEGEND
O AREAS AS OPERATOR
OAREAS AS JOINT VENTURE PARTNER
OD & P LEASES (OPERATED)
OD & P LEASE (NON OPERATED)
OPERATOR: MPCL
MPCL 98.19%
KPOGCL 1.81%
OPERATOR: OGDCL
OGDCL 50.00%
MPCL 33.33%
SEL 16.67%
BLOCK: PESHAWAR EAST

BLOCK: KOHAT
BLOCK: GHAURI
B OPERATOR: MPCL
MPCL 65%
OPERATOR: MPCL BLOCK: BANNU WEST BLOCK: KARAK
KAR
R
RAK PPL 35%
MPCL 55% WALI WEST
ST
OGDCL 35%
ZPCPL 10%
OPERATOR: MPCL OPERATOR: MPCL

MPCL 100% MPCL 60%
Award of block MOL 40%
is in Progress
OPERATOR: MPCL OPERATOR: MPCL

MPCL 60% MPCL 60%
PPL Europe 40% PPL Europe 40%
BLOCK: HARNAI
BLOCK: ZIARAT
OPERATOR: MPCL D&PL: ZARGHUN SOUTH OPERATOR: MPCL
MPCL 35.00% BLOCK: 28 MPCL 95%
SPUD 40.00% OPERATOR: OGDCL BLOCK: KOHLU BLOCK: KALCHAS OGDCL 05%
PKP 7.50% OGDCL 40%
GHPL 17.50% MPCL 30%
OPI 30% OPERATOR: OGDCL
OGDCL 50%
MPCL 50%
D&PL: MARI OPERATOR: MPCL

MPCL 100%
OPERATOR: MPCL D&PL: KOONJ
MPCL 100% BLOCK:
CK: SUKKUR
SU OPERATOR: MPCL
MPCL 100%
Final Cash Dividend and Bonus Shares OPERATOR: PPL

PPL 65%
MPCL 35%
The Board of Directors in its meeting held on July 30, 2019 has proposed
OPERATOR: MPCL
MPCL 60%
the following for approval of the members in Annual General Meeting: POL 40%
D & PL: FAZL BLOCK: HALA
Award of block BLOCK: TAUNG D & PL: ADAM - X OPERATOR: PPL
is in Progress
D & PL: ADAM WEST PPL 65%
OPERATOR: PPL MPCL 35%
OPERATOR: PPL
PPL 65% PPL 65%
MPCL 35% MPCL 35%
T
BLOCK: BELA WEST
D&PL: SUJJAL OPERATOR: MPCL

MPCL 100%
BLOCK
BLOCK:
L SUJAWAL OPERATOR: MPCL
D&PL: SUJAWAL MPCL 100%
Final cash Issuance of Bonus OPERATOR: PPL
PPL 37.5%
dividend for the Shares in ratio of one KUFPEC 35.0% BLOCK:
BLOCK
OCK
CK SHAH BANDAR
MPCL 25.0% OPERATOR: MPCL
year ended share for every ten GHPL 2.5% OPERATOR: PPL
MPCL 100%
June 30, 2019 shares held (i.e. 10%) PPL 63.0%
MPCL 32.0%
@ Rs. 2.0 per share GHPL 2.5%
SEHPL 2.5%
(i.e. 20%)
Statement of
Compliance
with the Listed Companies
Mari Petroleum Company limited
(Code
Year e of
ended unCorporate
June 30, 2019 Governance)
Regulations, 2017
The Company has complied with the requirements of the Listed Companies (Code of Corporate Governance)
Regulations, 2017 (the Regulations) in the following manner:
1. The total number of directors is 14 as per the following:

a. Male: 12*
b. Female: 01
* One position vacant.
2. The composition of the Board is as follows:

Category Names
Independent Director Mr Adnan Afridi

Ms Ayla Majid
Executive Director Lt Gen Ishfaq Nadeem Ahmad, HI(M), (Retd)
Non-Executive Directors Lt Gen Syed Tariq Nadeem Gilani, HI(M), (Retd)

Dr Nadeem Inayat
Maj Gen Javaid Iqbal Nasar (Retd)
Mr Rehan Laiq
Syed Iqtidar Saeed
Mr Sajid Mehmood Qazi
Mr Shahid Yousaf
Mr Mian Asad Hayaud Din
Mr Zahid Mir
Mr Ahmed Hayat Lak
Knock Out Drum at Kalabagh Gas & Condensate Field, Karak Block
Statement of Compliance with the Code of Corporate Governance
3. The Directors have confirmed 9. The following Directors on the Board are certified under SECP approved
that none of them is serving as Directors’ Training Program: d) Diversification & Enterprise Risk Management Committee
a Director on more than five listed S# Names Director Designation
companies, including this Company
(excluding the listed subsidiaries i. Lt Gen Syed Tariq Nadeem Gilani, HI(M), (Retd) Dr Nadeem Inayat President
of listed holding companies where ii. Mr Rehan Laiq Syed Iqtidar Saeed Member
applicable). iii. Dr Nadeem Inayat Mr Rehan Laiq Member
Mr Sajid Mehmood Qazi Member
iv. Maj Gen Javaid Iqbal Nasar (Retd)
4. The Company has prepared a Code Mr Zahid Mir Member
v. Mr Sajid Mehmood Qazi
of Conduct and has ensured that
appropriate steps have been taken vi. Mr Shahid Yousaf 13. The terms of reference of Audit, HR&R and Technical Committees have
to disseminate it throughout the vii. Mr Zahid Mir been formed, documented and advised to the Committees for compliance.
Company along with its supporting viii. Mr Ahmed Hayat Lak Diversification and ERM Committee is newly constituted and its terms of
policies and procedures. reference are in process of approval.
ix. Mr Adnan Afridi
x. Ms Ayla Majid 14. The frequency of meetings of the Committees were as per following:
5. The Board has developed a
vision/mission statement, overall 10. The Board has approved appointment of CFO, Company Secretary and Head
corporate strategy and significant Committee Frequency of meeting
of Internal Audit including their remuneration and terms and conditions of
policies of the Company. A employment and complied with relevant requirements of the Regulations. Audit Committee Quarterly
complete record of particulars HR and Remuneration Committee Yearly
of significant policies along with 11. The CFO and the CEO duly endorsed the financial statements before Technical Committee Required basis
the dates on which they were approval by the Board. Diversification & ERM Committee New Committee
approved or amended has been
maintained. 12. The Board has formed following Committees comprising of the Members
15. The Board has set up an effective internal audit function staffed with persons who are considered suitably qualified
as given below:
6. All the powers of the Board have and experienced for the purpose and are conversant with the policies and procedures of the Company.
been duly exercised and decisions a) Audit Committee
on relevant matters have been 16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the
taken by the Board/ Shareholders Quality Control Review Programme of the Institute of Chartered Accountants of Pakistan (ICAP) and registered with
as empowered by the relevant Ms Ayla Majid President (Independent Director) Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children
provisions of the Companies Act Mr Rehan Laiq Member do not hold shares of the Company and that the firm and all its partners are in compliance with International
2017 (the Act) and the Regulations. Mr Shahid Yousaf Member Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP.
7. The meetings of the Board were Mr Adnan Afridi Member 17. The statutory auditors or the persons associated with them have not been appointed to provide other services
presided over by the Chairman b) HR and Remuneration Committee except in accordance with the Act, the Regulations or any other regulatory requirement and the auditors have
and, in his absence, by a Director Director Designation
confirmed that they have observed IFAC guidelines in this regard.
elected by the board for this
Mr Adnan Afridi President (Independent Director) 18. We confirm that all other requirements of the Regulations have been complied with.
purpose. The Board has complied
Maj Gen Javaid Iqbal Nasar (Retd) Member
with the requirements of the
Act and the Regulations with
Ms Ayla Majid Member
respect to frequency, recording
and circulating minutes of the c) Technical Committee For and on behalf of the Board
meetings of the Board. Director Designation
Syed Iqtidar Saeed President

8. The Board of Directors have a Mr Rehan Laiq Member
formal policy and transparent Mr Sajid Mehmood Qazi Member
procedure for remuneration of Mr Shahid Yousaf Member
directors in accordance with the Islamabad Lt Gen Syed Tariq Nadeem Gilani, HI (M), (Retd)
Mr Zahid Mir Member
Act and the Regulations. July 30, 2019 Chairman
Financial
Statements for the year ended June 30, 2019
Independent Auditors’ Report to the Members 167

Statement of Financial Position 172
Statement of Profit or Loss 174
Statement of Comprehensive Income 175
Statement of Cash Flows 176
Statement of Changes in Equity 177
Notes to and Forming Part of the Financial Statements 178
Page intentionally left blank.

Statement of Financial Position

As at June 30, 2019
2019 2018 2019 2018

Note (Rupees in thousand) Note (Rupees in thousand)
EQUITY AND LIABILITIES ASSETS
SHARE CAPITAL AND RESERVES NON CURRENT ASSETS

Authorized capital Property, plant and equipment 11 16,176,231 13,266,282
250,000,000 (2018: 250,000,000) ordinary shares of Rs 10 each 2,500,000 2,500,000 Development and production assets 12 12,755,574 11,886,872
1,059,000,100 (2018: 1,059,000,100) preference shares of Rs 10 each 10,590,001 10,590,001 Exploration and evaluation assets 13 6,553,548 2,689,549
13,090,001 13,090,001 Long term loans and advances 14 39,755 35,411
Long term deposits and prepayments 15 230,999 62,890
Issued, subscribed and paid up capital 4 1,212,750 1,102,500 Deferred income tax asset 16 651,147 1,819,166
Undistributed percentage return reserve 5 602,415 613,109 36,407,254 29,760,170
Other reserves 6 13,190,001 12,190,001
Profit and loss account 7 48,601,563 26,286,128
63,606,729 40,191,738
NON CURRENT LIABILITIES CURRENT ASSETS

Deferred liabilities 8 10,057,962 7,952,336 Stores and spares 17 2,349,391 671,051
Trade debts 18 148,939,878 95,294,994
CURRENT LIABILITIES Loans and advances 19 4,752,460 2,532,344
Trade and other payables 9 140,372,206 93,903,238 Short term investments 20 20,700,000 8,437,354
Unclaimed dividend 32,563 19,371 Short term prepayments 21 92,919 66,714
Unpaid dividend 7,544 11,514 Interest accrued 105,747 103,183
Provision for income tax 5,985,202 2,087,503 Other receivables 78,739 30,982
146,397,515 96,021,626 Cash and bank balances 22 6,635,818 7,268,908
183,654,952 114,405,530
CONTINGENCIES AND COMMITMENTS 10
220,062,206 144,165,700 220,062,206 144,165,700
The annexed notes 1 to 46 form an integral part of these financial statements.
Muhammad Asif Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid
General Manager Finance/CFO Managing Director / CEO Director
Statement of Profit or Loss Statement of Comprehensive Income

for the year ended June 30, 2019 for the year ended June 30, 2019
2019 2018 2019 2018

Gross sales to customers 23 117,542,103 100,042,839 Profit for the year 24,327,088 15,374,340
Gas development surcharge 9,280,308 11,029,741 Other comprehensive loss:

General sales tax 12,098,286 11,668,172 Items that will not be reclassified to statement of profit or loss:
Excise duty 1,888,366 1,906,530
Gas infrastructure development cess 34,827,136 34,762,028 Remeasurement losses of defined benefit plans 33 (319,639) (198,142)
58,094,096 59,366,471 Tax effect related to remeasurement of defined benefit plans

Sales - net 59,448,007 40,676,368 - Current tax credit 173,326 108,244
Royalty 7,574,515 5,180,869 - Deferred tax charge (5,059) (1,949)
51,873,492 35,495,499 (151,372) (91,847)

Total comprehensive income for the year 24,175,716 15,282,493
Operating expenses 24 11,712,974 9,985,411
Exploration and prospecting expenditure 25 4,308,006 3,314,839
Other charges 26 2,435,811 1,447,747
18,456,791 14,747,997
33,416,701 20,747,502
Other income / (expenses) 27 326,087 (581,846)
Operating profit 33,742,788 20,165,656
Finance income 28 1,767,306 765,616
Finance cost 29 801,760 639,728
Profit before taxation 34,708,334 20,291,544
Provision for taxation 30 10,381,246 4,917,204
Profit for the year 24,327,088 15,374,340
Earnings per share - basic and diluted (Restated)
Earnings per ordinary share (Rupees) 31 200.59 126.77
Distributable earnings per ordinary share (Rupees) 31 6.27 5.85
Muhammad Asif Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid Muhammad Asif Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid
General Manager Finance/CFO Managing Director / CEO Director General Manager Finance/CFO Managing Director / CEO Director
Statement of Cash Flows Statement of Changes in Equity

for the year ended June 30, 2019 for the year ended June 30, 2019
2019 2018
Other Reserves
Note (Rupees in thousand)
Issued, Undistributed Capital
subscribed percentage redemption Self Profit
and paid up return reserve insurance and loss
Cash flows from operating activities capital reserve fund reserve account Total
Cash receipts from customers 64,734,687 59,354,356 (Rupees in thousand)
Cash paid to the Government for Government levies (25,346,338) (26,365,488) Balance as at July 1, 2017 1,102,500 496,436 10,590,001 600,000 12,748,733 25,537,670
Cash paid to suppliers, employees and others (13,764,354) (10,415,830)
Total comprehensive income for the year:
Income tax paid (5,187,942) (2,347,799)
Profit for the year - - - - 15,374,340 15,374,340
Cash provided by operating activities 20,436,053 20,225,239 Other comprehensive loss - - - - (91,847) (91,847)
- - - - 15,282,493 15,282,493
Cash flows from investing activities Final cash dividend for the year
Property, plant and equipment (3,119,481) (2,182,761) ended June 30, 2017 @ Rs 2.20 per share * - (103,745) - - (138,805) (242,550)
Development and production assets (2,413,957) (1,650,534) First interim cash dividend for the year ended
Exploration and evaluation assets (4,325,361) (2,424,676) June 30, 2018 @ Rs 3.50 per share * - - - - (385,875) (385,875)
Proceeds from disposal of property, plant and equipment 171 32,688 Transfer from profit and loss account to
Interest received 1,807,092 681,719 undistributed percentage return reserve - 220,418 - - (220,418) -
Transfer from profit and loss account to
Cash used in investing activities (8,051,536) (5,543,564)
self insurance reserve - - - 1,000,000 (1,000,000) -
Balance as at June 30, 2018 1,102,500 613,109 10,590,001 1,600,000 26,286,128 40,191,738
Cash flows from financing activities
Redemption of preference shares and repayment of long term loans (3,390) (5,008,719)
Total comprehensive income for the year:
Finance cost paid (68) (270,939)
Profit for the year - - - - 24,327,088 24,327,088
Dividends paid (751,503) (623,547)
Other comprehensive loss - - - - (151,372) (151,372)
Cash used in financing activities (754,961) (5,903,205) - - - - 24,175,716 24,175,716
Increase in cash and cash equivalents 11,629,556 8,778,470 Final cash dividend for the year ended
Cash and cash equivalents at beginning of year 15,706,262 6,927,792 June 30, 2018 @ Rs 2.50 per share * - note 5.2 - (171,990) - - (103,635) (275,625)
Cash and cash equivalents at end of year 32 27,335,818 15,706,262 First interim cash dividend for the year ended
June 30, 2019 @ Rs 4.00 per share * - - - - (485,100) (485,100)
The annexed notes 1 to 46 form an integral part of these financial statements. Issuance of bonus shares * 110,250 (110,250) - - - -
undistributed percentage return reserve - 271,546 - - (271,546) -
self insurance reserve - - - 1,000,000 (1,000,000) -
Balance as at June 30, 2019 1,212,750 602,415 10,590,001 2,600,000 48,601,563 63,606,729
* Distribution to owners - recorded directly in equity
Muhammad Asif Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid Muhammad Asif Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid
General Manager Finance/CFO Managing Director / CEO Director General Manager Finance/CFO Managing Director / CEO Director
Notes to and Forming Part of the

Financial Statements
For the year ended June 30, 2019
1. LEGAL STATUS AND OPERATIONS decommissioning cost that has been measured at present value and the obligation under employee defined
1.1 Mari Petroleum Company Limited (“the Company”) is a public limited company incorporated in Pakistan benefit plans that is carried at present value of defined benefit obligations net of fair value of plan assets.
on December 4, 1984 under the Companies Ordinance, 1984 (subsequently replaced with the Companies
Act, 2017). The shares of the Company are listed on the Pakistan Stock Exchange Limited. The Company is 2.3 Functional and presentation currency
principally engaged in exploration, production and sale of hydrocarbons. The registered office of the Company These financial statements are presented in Pakistan Rupees (Rupees) which is the functional currency of the
is situated at 21 Mauve Area, 3rd Road, G-10/4, Islamabad. Company. All figures are rounded off to the nearest thousands of Rupees.
1.2 Geographical location of concessions / blocks is as under: 2.4 Critical accounting estimates and judgements
The preparation of these financial statements in conformity with the approved accounting standards
Concession / block Location
requires management to make judgements, estimates and assumptions that affect the application of
Mari Field, Sujawal block, Sukkur block, Hala block, Shah Bandar block Sindh policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated
Zarghun South Field, Kalchas block, Ziarat block, Harnai block, assumptions are based on historical experience and other factors that are believed to be reasonable under
Block 28, Bela West block Balochistan the circumstances, the results of which form the basis of making judgment about carrying amounts of assets
Bannu West block, Kohat block KPK and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Ghauri block Punjab
Karak block, Peshawar East block KPK and Punjab The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
Kohlu block Balochistan and Punjab estimates are recognized in the period in which estimates are revised if the revision affects only that period,
or in the period of revision and future periods if the revision affects both current and future periods.
1.3 Revision in Mari Wellhead Gas Price formula
The previous gas price mechanism for Mari field was governed by Mari Gas Well Head Price Agreement In the process of applying the Company’s accounting policies, the management has made the following
(“the Agreement”) dated December 22, 1985 between the President of Islamic Republic of Pakistan and estimates, assumptions and judgements which are significant to these financial statements:
the Company. Effective July 1, 2014, the Agreement has been replaced with revised Mari Wellhead Gas
Price Agreement (2015) (“Revised Agreement”) dated July 29, 2015 in line with the Economic Coordination a) Estimation of oil and gas reserves used for amortization / impairment
Committee (ECC) decision explained below: Oil and gas reserves are an important element in impairment testing for development and production assets
of the Company. Estimates of these reserves are inherently imprecise, require the application of judgement
Effective July 1, 2014, the cost plus wellhead gas pricing formula was replaced with a crude oil price linked
and are subject to future revision. Proved reserves are estimated by reference to available reservoir and well
formula which provides a discounted wellhead gas price to be gradually achieved in five years from July
information, including production and pressure trends for producing reservoirs and, in some cases, subject
1, 2014. Mari field wellhead gas price for the year has been determined in line with the revised formula as
to definitional limits, to similar data from other producing reservoirs. All proved reserve estimates are subject
approved by the ECC. The revised formula provides dividend distribution to be continued for next ten years
to revision, either upward or downward, based on new information, such as from development, drilling and
in line with the previous cost plus formula. Accordingly, the shareholders are entitled to a minimum return
production activities or from changes in economic factors, including contract terms or development plans.
of 30%, net of all taxes, on shareholders’ funds which is to be escalated in the event of increase in the
Changes to the Company’s estimates of proved reserves, particularly proved developed reserves, also affect
Company’s gas or equivalent oil production beyond the level of 425 MMSCFD at the rate of 1%, net of all
the amount of depreciation, impairment and amortization recorded in the financial statements for fixed
taxes, on shareholder’s funds for each additional 20 MMSCFD of gas or equivalent oil produced, prorated for
assets related to hydrocarbon production activities.
part thereof on annual basis, subject to a maximum of 45%. Any residual profits for the next ten years are to
be reinvested for exploration and development activities in Mari as well as outside Mari field.
b) Provision for decommissioning cost
Provision is recognized for the future decommissioning and restoration of oil and gas wells, production
2. BASIS OF PREPARATION
facilities and pipelines at the end of their economic lives. The timing of recognition requires the application of
2.1 Statement of compliance judgement to existing facts and circumstances, which can be subject to changes. Estimates of the amounts of
These financial statements have been prepared in accordance with the accounting and reporting standards provision are based on current legal and constructive requirements, technology and price levels. Provision is
as applicable in Pakistan. The accounting and reporting standards as applicable in Pakistan comprise of: based on best current estimates, however, because actual outflows can differ from estimates due to changes
– International Financial Reporting Standards (IFRS), issued by the International Accounting Standards in laws, regulations, public expectations, technology, prices and conditions, and can take place many years
Board (IASB) as notified under the Companies Act, 2017; and in the future, the carrying amount of provision is reviewed annually and adjusted to take account of such
changes.
– Provisions of and directives issued under the Companies Act, 2017.
Where the provisions of and directives issued under the Companies Act, 2017 differ from IFRS, the provisions c) Property, plant and equipment
of and directives issued under the Companies Act, 2017 have been followed. The Company reviews the useful lives and residual values of property, plant and equipment at each reporting
date. Any change in the estimates may affect the carrying amounts of respective items of property, plant and
2.2 Basis of measurement equipment with a corresponding effect on the depreciation charge and impairment, if any.
These financial statements have been prepared under the historical cost convention except provision for

d) Exploration and evaluation assets / expenditure – IFRS 9 ‘Financial Instruments’ (effective from accounting period beginning on or after July 1,
The Company’s accounting policy for exploration and evaluation expenditure results in certain items of 2018)
expenditure being capitalized for an area of interest where it is considered likely to be recoverable by future IFRS 9 ‘Financial Instruments’ replaces the existing guidance in IAS 39 Financial Instruments: Recognition
exploration or sale or where the activities have not reached a stage which permits a reasonable assessment and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial
of the existence of reserves. This policy requires management to make certain estimates and assumptions as instruments, a new expected credit loss model for calculating impairment on financial assets, and
to future events and circumstances, in particular whether an economically viable extraction operation can be new general hedge accounting requirements. It also carries forward the guidance on recognition and
established. Any such estimates and assumptions may change as new information becomes available. If, after derecognition of financial instruments from IAS 39. The Company has applied the new standard in
having capitalized the expenditure under the policy, a judgement is made that recovery of the expenditure is accordance with the transition provisions of IFRS 9. Comparatives have not been restated and there are
unlikely, the relevant capitalized amount is written off to the statement of profit or loss. no adjustments on transition to be reported in opening retained earnings at July 01, 2018.
IFRS 9 provides a single classification and measurement approach for financial assets that reflects the
e) Development and production expenditure
business model in which they are managed and their cash flow characteristics. For financial liabilities the
Development and production activities commence after project sanctioning by the approving authority.
existing classification and measurement requirements of IAS 39 are largely retained.
Judgement is applied by the management in determining when a project is economically viable before
obtaining project sanction approval. In exercising this judgement, management is required to make certain The table below illustrates the classification of financial assets under IFRS 9 and IAS 39 at the date of
estimates and assumptions similar to those described above for capitalized exploration and evaluation initial application i.e. July 1, 2018. There was no difference in carrying amounts for financial assets.
expenditure. Any such estimates and assumptions may change as new information becomes available. If, Further, there were no differences in classification or carrying amounts for financial liabilities.
after having commenced development activity, a judgement is made that a development and production
asset is impaired, the appropriate amount is written off to the statement of profit or loss. Classification Classification
As at July 1, 2018 under IAS 39 under IFRS 9
f) Employee benefits All financial assets as referred to in note 35.1 Loans and receivables Amortized cost
Certain actuarial assumptions have been adopted as disclosed in note 33 to the financial statements for
determination of present value of defined benefit obligations and fair value of plan assets. Management of the Company has assessed that these changes do not have any significant impact on the
Company’s financial statements other than certain additional disclosures.
g) Income taxes
Certain annual improvements have also been made to a number of IFRSs. Such improvements did not have
In making the estimates of income taxes currently payable by the Company, the management takes into
any material effect on the financial statements of the Company.
account the income tax law applicable to the Company and the decisions of appellate authorities on certain
issues in the past. This involves judgement on the future tax treatment of certain transactions. Deferred tax
2.6 Standards, amendments to published standards and interpretations that are not yet effective and
is recognized based on the expectation of the tax treatment of these transactions.
have not been early adopted by the Company
The following standards, amendments and interpretations are only effective for accounting periods, beginning
h) Provision against financial assets
on or after the date mentioned against each of them.
The Company reviews the recoverability of its financial assets to assess the expected credit losses and Effective from
provision thereagainst on an annual basis. accounting period
beginning on or after
2.5 Standards, amendments to published standards and interpretations that became effective during
Amendments to IFRS 3 ‘Business Combinations’ - Amendments regarding
the year
the definition of business January 01, 2020
The following amendments to the accounting and reporting standards as applicable in Pakistan are effective
for the first time for the year ended June 30, 2019 and are relevant to the Company: Amendments to IFRS 9 ‘Financial Instruments’ - Amendments regarding
prepayment features with negative compensation and modifications of
– IFRS 15 ‘Revenue from contracts with customers’ (effective from accounting period beginning on
financial liabilities January 01, 2019
or after July 1, 2018)
IFRS 15 ‘Revenue from contracts with customers’ replaces the previous revenue standards: lAS 18 Amendments to IFRS 10 ‘Consolidated Financial Statements’ and Date to be determined.
Revenue, lAS 11 Construction Contracts and the related interpretations on revenue recognition. It IAS 28 ‘Investments in Associates and Joint Ventures’ - Sale or contribution Earlier application
introduces a single five-step model for revenue recognition and establishes a comprehensive framework of assets between an investor and its associate or joint venture is permitted
for recognition of revenue from contracts with customers based on a core principle that an entity should Amendments to References to the Conceptual Framework in IFRS Standards January 01, 2020
recognise revenue representing the transfer of promised goods or services to customers in an amount
Amendments to IAS 1 ‘Presentation of Financial Statements’ and IAS 8
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
‘Accounting Policies, Changes in Accounting Estimates and Errors’
services.
- Amendments regarding the definition of material January 01, 2020
Management of the Company has assessed that these changes do not have any significant impact on the Amendments to IAS 19 ‘Employee Benefits’ - Amendments regarding plan
Company’s financial statements other than certain additional disclosures. amendments, curtailments or settlements January 01, 2019

Effective from recognized for all taxable temporary differences and deferred tax assets are recognized to the extent, it is
accounting period probable that taxable profits will be available against which deductible temporary differences, unused tax
beginning on or after
losses and tax credits can be utilized. Deferred taxation has been calculated at the estimated effective tax
Amendments to IAS 28 ‘Investments in Associates and Joint Ventures’ rate of 32% after taking into account the availability of depletion allowance and royalty.
- Amendments regarding long-term interests in an associate or joint venture
that form part of the net investment in the associate or joint venture but to 3.2 Provisions
which the equity method is not applied January 01, 2019 Provisions are recognized when the Company has a present legal or constructive obligation as a result of past
events and, it is probable that an outflow of resources embodying economic benefits will be required to settle
IFRIC 23 ‘Uncertainty over Income Tax Treatments’: Clarifies the accounting
the obligation and a reliable estimate can be made of the amount of obligation.
treatment in relation to determination of taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits and tax rates, when there is uncertainty
3.3 Provision for decommissioning cost
over income tax treatments under IAS 12 ‘Income Taxes’ January 01, 2019
Estimated decommissioning and restoration costs, which are primarily in respect of abandonment and removal
These standards, interpretations and the amendments are either not relevant to the Company’s operations of wells and production facilities at Mari Field and the Company’s proportionate share in joint operating
or are not expected to have significant impact on the Company’s financial statements other than certain fields, are based on current requirements, technology and price levels and are stated at present value. The
additional disclosures. associated asset retirement costs are capitalized as part of property, plant and equipment, development
and production assets and exploration and evaluation assets and amortized on unit of production basis over
Certain annual improvements have also been made to a number of IFRSs.
the total proved reserves of the relevant field. The liability is recognized once an obligation (whether legal
IFRS 16 ‘Leases’ replaces the previous lease standard: IAS 17 Leases and is effective from annual accounting or constructive) crystallizes in the period when a reasonable estimate of the fair value can be made; and a
period beginning on or after January 01, 2019. It will result in almost all leases being recognised on the corresponding amount is recognized in property, plant and equipment, development and production assets
statement of financial position, as the distinction between operating and finance leases is removed. Under the and exploration and evaluation assets.
new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised.
The present value is calculated using amounts discounted over the useful economic life of the reserves. Any
The only exceptions are short term and low value leases. Management is in the process of assessing the
change in the present value of the estimated expenditure is dealt with prospectively and reflected as an
impact of changes laid down by this standard on its financial statements.
adjustment to the provision and a corresponding adjustment to property, plant and equipment, development
Other than the aforesaid standards, interpretations and amendments, the International Accounting Standards and production assets and exploration and evaluation assets. The unwinding of discount on decommissioning
Board (IASB) has also issued the following standards which have not been adopted locally by the Securities provision is recognized as finance cost.
and Exchange Commission of Pakistan: The decommissioning cost has been discounted at a real discount rate of 1.20% (2018: 1.20% ) per annum.
– IFRS 1 – First Time Adoption of International Financial Reporting Standards

3.4 Employee benefits
– IFRS 14 – Regulatory Deferral Accounts
– IFRS 17 – Insurance Contracts The Company operates:
The following interpretations issued by the IASB have been waived off by SECP: i) Defined benefit funded and unfunded plans for its management and non-management employees.
– IFRIC 4 – Determining whether an arrangement contains lease The amounts arising as a result of remeasurements on employee retirement benefits are recognized
– IFRIC 12 – Service concession arrangements immediately in statement of comprehensive income. Past service cost and curtailments are recognized
in statement of profit or loss, in the period in which change takes place.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Actuarial valuation is conducted periodically using the “Projected Unit Credit Method” and the latest
The principal accounting policies applied in the preparation of these financial statements are set out below. valuation was carried out as at June 30, 2019. The results of the valuation are summarized in note 33 to
These policies have been consistently applied to all the periods presented in these financial statements these financial statements.
unless otherwise stated.
ii) Defined contribution provident fund for its employees for which Rs 83.03 million (2018: Rs 72.50 million)
are charged to income for the year. The contributions to the fund are made by the Company at the rate
3.1 Taxation
of 10% per annum of the basic salary.
Current
iii) The Company has the policy to provide for compensated absences of its employees in accordance with
Provision for current taxation is based on taxable income at the applicable tax rates after taking into account
respective entitlement on cessation of service; related expected cost thereof has been included in the
tax credits and tax rebates, if any.
financial statements.
Deferred
The Company accounts for deferred taxation on all timing differences, using the ‘liability method’ in respect of 3.5 Property, plant and equipment
all major temporary differences between carrying amounts of assets and liabilities in the financial statements Property, plant and equipment except freehold land are stated at cost less accumulated depreciation and
and the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are impairment loss, if any. Freehold land is stated at cost. Cost in relation to property, plant and equipment

comprises acquisition and other directly attributable costs and decommissioning cost as referred in Intangible E&E assets are not amortized.
note 3.3 to these financial statements.
Intangible E&E assets are assessed for impairment when facts and circumstances indicate that carrying
Depreciation on property, plant and equipment is charged to income using the straight line method at rates amounts may exceed the recoverable amounts of these assets. Such indicators include, the point at which
specified in note 11 to these financial statements so as to write off the cost of property, plant and equipment a determination is made as to whether or not commercial reserves exist, the period for which the Company
over their estimated useful lives. has right to explore has either expired or will expire in the near future and is not expected to be renewed,
substantive expenditure on further exploration and evaluation activities is not planned or budgeted and any
Depreciation on additions to property, plant and equipment is charged from the month in which an asset is
other event, that may give rise to indication that such assets are impaired.
available for use while no depreciation is charged for the month in which the asset is derecognized.
Where an impairment loss subsequently reverses, the carrying amount of the Intangible E & E assets is
Subsequent costs are included in the assets’ carrying amounts when it is probable that future economic
increased due to the revised recoverable amount but limited to the extent of the carrying amount that would
benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
have been determined had no impairment loss being recognized for the Intangible E & E assets in prior years.
Carrying amount of parts so replaced, if any, is derecognized. All other repairs and maintenance are charged
A reversal of the impairment loss is recognized as income in the statement of profit or loss.
to income as and when incurred. Gains and losses on disposals are credited or charged to income in the year
of disposal.
3.7 Development and production assets
Capital work in progress is stated at cost less impairment loss, if any, and transferred to respective item of Development and production assets represent the cost of developing the discovered commercial reserves,
property, plant and equipment when available for intended use. together with the capitalized E&E expenditures transferred from intangible E&E assets as outlined in note
3.6 above. The cost of development and production assets also includes the cost of acquisitions of such
The carrying amounts of the Company’s assets are reviewed at each statement of financial position date to
assets, directly attributable overheads, and the cost of recognizing provisions for future site restoration and
determine whether there is any indication of impairment loss. If any such indication exists, the recoverable
decommissioning. Development and production assets are amortized on a unit of production basis, which is
amount of such assets is estimated and impairment losses are recognized in the statement of profit or loss.
the ratio of oil and gas production in the year to the estimated quantities of commercial reserves at the end
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
of the year plus the production during the year.
recoverable amount but limited to the extent of the carrying amount that would have been determined (net of
amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively.
of the impairment loss is recognized as income in the statement of profit or loss. Acquisition cost of leases, where commercial reserves have been discovered, are capitalized and amortized
on unit of production basis.
3.6 Exploration and evaluation assets
The Company applies the “successful efforts” method of accounting for Exploration and Evaluation (E&E) Impairment test of development and production assets is also performed whenever events and circumstances
expenditures. Under this method of accounting, exploratory/evaluation drilling expenditures are initially arising during the development and production phase indicate that carrying amounts of the development and
capitalized as intangible E&E assets in cost centers by well, field or exploration area, as appropriate, till such production assets may exceed their recoverable amount. Such circumstances depend on the interaction
time that technical feasibility and commercial viability of extracting gas and oil are demonstrated. of a number of variables, such as the recoverable quantities of hydrocarbons, the production profile of the
hydrocarbons, the cost of the development of the infrastructure necessary to recover the hydrocarbons,
Major costs capitalized include material, chemical, fuel, well services, rig costs, cost of recognizing provisions the production costs, the contractual duration of the production concession and the net selling price of the
for future site restoration and decommissioning and any other cost directly attributable to a particular well. hydrocarbons produced.
All other exploration costs including cost of technical studies, seismic acquisition and processing, geological
and geophysical activities are charged currently against income as exploration and prospecting expenditure. The carrying amounts are compared against expected recoverable amounts of the oil and gas assets,
Costs incurred prior to having obtained the legal rights to explore an area are charged directly to the statement generally by reference to the present value of the future net cash flows expected to be derived from such
of profit or loss as and when incurred. assets. The cash generating unit applied for impairment test purpose is generally field by field basis, except
that a number of fields may be grouped as a single cash generating unit where the cash flows of each field
Tangible assets used in E&E activities, other than stores held, including the Company’s vehicles, drilling are inter-dependent.
rigs and other property, plant and equipment used by the Company’s exploration function are classified as
property, plant and equipment. However, to the extent that such a tangible asset is consumed in developing 3.8 Stores and spares
an intangible E & E asset, the amount reflecting that consumption is recorded as part of the cost of the These are valued at the lower of cost and net realizable value less allowance for obsolete and slow moving
intangible E&E asset. Such intangible costs include directly attributable overheads, together with the cost of items. Material in transit is valued at cost. Cost is determined on the moving average basis and comprises
other materials consumed during the exploration and evaluation phases. cost of purchases and other costs incurred in bringing the items to their present location and condition. Net
realizable value signifies the estimated selling price in the ordinary course of business less costs necessarily
Intangible E&E assets relating to each exploration license/field are carried forward, until the existence or
to be incurred in order to make a sale.
otherwise of commercial reserves have been determined subject to certain limitations including review
for indications of impairment. If commercial reserves have been discovered, the carrying value after any When stores and spares meet the definition of property, plant and equipment, they are classified as stores
impairment loss of the relevant E&E assets is then reclassified as development and production assets. and spares held for capital expenditure, classified under property, plant and equipment.
Otherwise, the capitalized costs are written off as dry hole costs.

3.9 Foreign currencies 3.15 Impairment of non-financial assets

Pakistan Rupees is the functional as well as reporting currency of the Company. Transactions in foreign Assets that have an indefinite useful life, for example land, are not subject to depreciation and are tested
currencies are recorded at the rate of exchange prevailing on the date of the transaction. All monetary assets annually for impairment. Assets that are subject to depreciation are reviewed for impairment at each statement
and liabilities in foreign currencies are translated into Pak Rupees at the rate of exchange prevailing at the of financial position date, or wherever events or changes in circumstances indicate that the carrying amount
statement of financial position date. All exchange differences are taken to the statement of profit or loss. may not be recoverable. An impairment loss is recognised for the amount for which the asset’s carrying
amount exceeds its recoverable amount. An asset’s recoverable amount is the higher of its fair value less
3.10 Revenue and other income costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
Revenue from contracts with customers is recognized when or as the Company satisfies a performance levels for which there are separately identifiable cash flows. Non-financial assets that suffered an impairment
obligation by transferring control of a promised good or service to a customer. The Company principally are reviewed for possible reversal of the impairment at each statement of financial position date. Reversals
satisfies its performance obligations at a point in time. The transfer of control of hydrocarbons usually of the impairment loss are restricted to the extent that asset’s carrying amount does not exceed the carrying
coincides with the delivery of the same to customers. amount that would have been determined, net of depreciation or amortization, if no new impairment loss had
been recognised. An impairment loss or reversal of impairment loss is recognised in income for the year.
When, or as, a performance obligation is satisfied, the Company recognizes as revenue the amount of the
transaction price that is allocated to that performance obligation. The transaction price is the amount of 3.16 Financial instruments
consideration to which the Company expects to be entitled. Effect of adjustment, if any, arising from revision A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
in sale price is reflected as and when the prices are finalized with the customers and/or approved by the or equity instrument of another entity.
Government.
a) Financial assets
Finance income is recognized as the interest accrues (using the effective interest rate, that is, the rate that Financial assets are recognized initially at fair value, normally being the transaction price. In the case of
exactly discounts estimated future cash receipts through the expected life of the financial instrument to the financial assets not at fair value through profit or loss, directly attributable transaction costs are also included.
net carrying amount of the financial asset). The subsequent measurement of financial assets depends on their classification, as set out below. The
Company derecognizes financial assets when the contractual rights to the cash flows expire.
3.11 Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently From July 01, 2018, the Company classifies its financial asset as measured at amortized cost, fair value through
carried at amortized cost using the effective interest method. other comprehensive income or fair value through profit or loss. The classification depends on the business
model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
Preference shares, which are mandatorily redeemable by the Company are classified as liabilities. The profit
on these preference shares is recognized in the statement of profit or loss as finance cost. (i) Financial assets measured at amortized cost
Financial assets are classified as measured at amortized cost when they are held in a business model the
3.12 Borrowing cost objective of which is to collect contractual cash flows and the contractual cash flows represent solely
Borrowing costs which are directly attributable to the acquisition, construction or production of a qualifying payments of principal and interest. Such assets are carried at amortized cost using the effective interest
asset are capitalised as part of the cost of that asset. The Company suspends capitalization of borrowing costs method if the time value of money is significant. Gains and losses are recognized in statement of profit or
during extended period when active development of a qualifying asset is suspended. All other borrowing loss when the assets are derecognized or impaired and when interest is recognized using the effective
costs are charged to statement of profit or loss. interest method. This category of financial assets includes ‘Long term deposits’, ‘Trade debts’, ‘Loans and
advances’, ‘Interest accrued’, ‘Short term investments’ and ‘Cash and bank balances’ in the statement of
3.13 Interest in joint arrangements financial position.
A joint arrangement is one in which two or more parties have joint control. Joint control is the contractually
agreed sharing of control of an arrangement, which exist only when decisions about the relevant activities (ii) Financial assets measured at fair value through other comprehensive income
require the unanimous consent of the parties sharing control. Investments in joint arrangements are classified Financial assets are classified as measured at fair value through other comprehensive income when they
as either joint operations or joint ventures, depending on the contractual rights and obligations that each are held in a business model the objective of which is both to collect contractual cash flows and sell the
investor has, rather than the legal structure of the joint arrangement. The Company has assessed the nature financial assets, and the contractual cash flows represent solely payments of principal and interest. The
of its joint arrangements and determined them to be joint operations. Company does not have any financial assets classified in this category.
(iii) Financial assets measured at fair value through profit or loss

3.14 Joint operations
Financial assets are classified as measured at fair value through profit or loss when the asset does not
The Company classifies a joint arrangement as a joint operation when the Company has the rights to the
meet the criteria to be measured at amortized cost or fair value through other comprehensive income.
assets, and obligations for the liabilities, of the arrangement and accounts for each of its share of assets,
Such assets are carried on the statement of financial position at fair value with gains or losses recognized
liabilities, revenues and expenses. These are accounted for on the basis of latest audited financial statements
in the statement of profit or loss. The Company does not have any financial assets classified in this
and where applicable, the cost statements received from the operator of the joint operations, for the
category.
intervening period upto the statement of financial position date.

b) Financial liabilities 3.18 Trade debts and other receivables

The measurement of financial liabilities depends on their classification, as follows: Trade debts and other receivables are recognised and carried at their amortized cost less an allowance for
any uncollectible amounts. Carrying amounts of trade and other receivables are assessed on a regular basis
(i) Financial liabilities measured at fair value through profit or loss and if there is any doubt about the realizability of these receivables, appropriate amount of provision is made.
Financial liabilities that meet the definition of held for trading are classified as measured at fair value
through profit or loss. Such liabilities are carried on the statement of financial position at fair value with 3.19 Cash and cash equivalents
gains or losses recognized in the statement of profit or loss. The Company does not have any financial Cash and cash equivalents, for the purposes of statement of cash flows, comprise cash in hand and at bank
liabilities classified in this category. and include short term highly liquid investments that are readily convertible to the known amounts of cash
and are subject to an insignificant risk of change in value. Cash equivalents are classified as financial assets
(ii) Financial liabilities measured at amortized cost
measured at amortized cost.
All other financial liabilities are initially recognized at fair value, net of directly attributable transaction
costs.
3.20 Dividend distribution
After initial recognition, other financial liabilities are subsequently measured at amortized cost using Dividend is recognized as a liability in the financial statements in the period in which it is declared.
the effective interest method. This category of financial liabilities includes trade and other payables,
unclaimed dividend and unpaid dividend. 3.21 Research and development costs
Research and development costs are charged to income as and when incurred.
c) Fair value measurement
Fair value is the price that would be received from sale of an asset or paid to transfer a liability in an orderly
3.22 Operating leases
transaction between market participants. The Company categorizes assets and liabilities measured at fair
Rentals payable for vehicles under operating leases are charged to statement of profit or loss over the term
value into one of three levels depending on the ability to observe inputs employed in their measurement.
of the relevant lease.
Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs
that are observable, either directly or indirectly, other than quoted prices included within level 1 for the asset
3.23 Operating segments
or liability. Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications
Segment reporting is based on the operating (business) segments of the Company. An operating segment
to observable related market data or Company’s assumptions about pricing by market participants.
is a component of the Company that engages in business activities from which it may earn revenues and
d) Off-setting of financial assets and liabilities incur expenses, including revenues and expenses that relate to transactions with any of the Company’s
A financial asset and a financial liability is offset and the net amount is reported in the statement of financial other components. An operating segment’s operating results are reviewed regularly by the Chief Executive
position if the Company has a legally enforceable right to set-off the recognised amounts and intends either Officer / Board of Directors to make decisions about resources to be allocated to the segment and assess its
to settle on a net basis or to realise the asset and settle the liability simultaneously. performance, and for which discrete financial information is available.
e) Impairment of financial assets measured at amortized cost The business segments are engaged in providing products or services which are subject to risks and rewards
The Company assesses on a forward looking basis the expected credit losses associated with financial assets which differ from the risk and rewards of other segments. Segments reported are exploration and production,
classified as measured at amortized cost at each statement of financial position date. Expected credit losses Mari Seismic Unit and Mari Drilling Unit.
are measured based on the maximum contractual period over which the Company is exposed to credit risk.
Since this is typically less than 12 months there is no significant difference between the measurement of 3.24 Earnings Per Share
12-month and lifetime expected credit losses for the Company’s in-scope financial assets. The measurement The Company presents basic and diluted Earnings Per Share (EPS) data for its ordinary shares. Basic EPS is
of expected credit losses is a function of the probability of default, loss given default and exposure at default. calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
The expected credit loss is estimated as the difference between the asset’s carrying amount and the present average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the
value of the future cash flows the Company expects to receive discounted at the financial asset’s original profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
effective interest rate. The carrying amount of the asset is adjusted, with the amount of the impairment gain outstanding for the effects of all dilutive potential ordinary shares.
or loss recognized in the statement of profit or loss.
A financial asset or group of financial assets classified as measured at amortized cost is considered to
be credit-impaired if there is reasonable and supportable evidence that one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset (or group of financial assets) have
occurred. Financial assets are written off where the Company has no reasonable expectation of recovering
amounts due.
3.17 Trade and other payables

Liabilities for trade and other payables are carried at their amortized cost which approximates the fair value
of the consideration to be paid in the future for goods and services received.

2019 2018 units as would be determined based on market price for listed entities or breakup value for non-listed entities.
The shares relating to the surrendered units would be transferred back to GoP.
4. ISSUED, SUBSCRIBED AND PAID UP CAPITAL The Scheme also provides that 50% of dividend related to shares transferred to the respective Trust Fund
24,850,007 (2018: 24,850,007) ordinary shares of would be distributed amongst the unit-holder employees. The balance 50% dividend would be transferred by
Rs 10 each issued for cash 248,500 248,500 the respective Trust Fund to the Central Revolving Fund managed by the Privatization Commission of Pakistan
for the payment to employees against surrendered units. The deficit, if any, in Trust Funds to meet the re-
11,899,993 (2018: 11,899,993) ordinary shares of purchase commitment would be met by GoP.
Rs 10 each issued for consideration other than cash 4.1 119,000 119,000
The above Scheme needs to be accounted for by the covered entities, including the Company, under the
provisions of the amended International Financial Reporting Standard to share based payment (IFRS 2).
84,525,000 (2018: 73,500,000) ordinary shares of
However, keeping in view the difficulties that may be faced by the entities covered under the Scheme, the
Rs 10 each issued as bonus shares 4.2 845,250 735,000
Securities and Exchange Commission of Pakistan on receiving representation from some of the entities
1,212,750 1,102,500 covered under the scheme and after having consulted the Institute of Chartered Accountants of Pakistan
vide their letter number CAIDTS/PS& TAC/2011-2036 dated February 2, 2011 has granted exemption to such
4.1 This represents shares allotted to the Government of Pakistan and Fauji Foundation in consideration for entities from the application of IFRS 2 to the Scheme vide SRO 587 (I)/2011 dated June 7, 2011.
transfer of assets and liabilities of Pak Stanvec Petroleum Project.
Had the exemption not been granted, the staff costs of the Company for the year would have been lower by
4.2 The Board of Directors in its meeting held on August 30, 2018 proposed issuance of bonus shares in ratio Rs 777.96 million, profit for the year would have been higher by Rs 375.99 million, earnings per share would
of one share for every ten shares held (i.e. 10%) amounting to Rs 110.250 million. The bonus shares were have been higher by Rs 3.10 per share and reserves would have been higher by Rs 592.78 million.
subsequently issued after approval of the shareholders in the Annual General Meeting held on October 18,
The Company understands that the Scheme is currently under review by the GoP, the impact of which cannot
2018.
be determined as of June 30, 2019.
669,200 bonus shares have not been issued as at June 30, 2019 due to pending resolution of issue relating to
deduction of withholding tax on issuance of bonus shares (2018: 608,364 bonus shares). 4.5 Rights and Privileges in the Participation and Shareholders Agreement (PSA)
A Participation and Shareholders Agreement (PSA) was signed among sponsor shareholders i.e. Fauji
4.3 Major shareholding of the Company is as follows: Foundation, Government of Pakistan (GoP) and Oil and Gas Development Company Limited (OGDCL) on June 3,
2019 2018 1985 which contained the rights and privileges of the parties. PSA was later amended through a Supplemental
(Percentage) PSA dated July 25, 1992.
Fauji Foundation 40.00 * 40.00* Right of First Refusal

Oil and Gas Development Company Limited (OGDCL) 20.00 * 20.00* If any of the sponsor shareholders desires to sell or transfer its shares in the Company in whole or in part, the
Government of Pakistan 18.39 18.39 remaining sponsor shareholders shall have the first option to purchase such shares subject to the conditions
and in the manner prescribed in the PSA.
* Pattern of shareholding includes 404,250 and 202,125 bonus shares (2018: 367,500 and 183,750 bonus
shares) of Fauji Foundation and OGDCL respectively, which have not been issued as at year end due to Board Selection
pending resolution of issue as referred to in note 4.2. The membership of the Board of Directors of the Company shall reflect as closely as possible the proportion
in which shares of the Company are held by the sponsor shareholders and others.
4.4 Application of IFRS 2 - Share Based Payment
On August 14, 2009, the Government of Pakistan (GoP) launched Benazir Employees’ Stock Option Scheme Management Right
(the “Scheme”) for employees of certain State Owned Enterprises (SOEs) and non-State Owned Enterprises The management of the affairs and the business of the Company shall vest in and be conducted by Fauji
(non-SOEs) where GoP holds significant investments. The Scheme is applicable to permanent and contractual Foundation through a Managing Director exclusively nominated by Fauji Foundation.
employees who were in employment of these entities on the date of launch of the Scheme, subject to
completion of five years vesting period by all contractual employees and by permanent employees in certain
instances.
The Scheme provides for a cash payment to employees on retirement or termination based on the price of
shares of respective entities. To administer this Scheme, GoP shall transfer 12% of its investment to a Trust
Fund to be created for the purpose by each of such entities. The eligible employees would be allotted units
by each Trust Fund in proportion to their respective length of service and on retirement or termination such
employees would be entitled to receive such amounts from Trust Funds in exchange for the surrendered

2019 2018 2019 2018

5. UNDISTRIBUTED PERCENTAGE RETURN RESERVE 7. PROFIT AND LOSS ACCOUNT
Balance at beginning of the year 613,109 496,436 Undistributed return 7.1 3,197 103,635
Transferred from profit and loss account 5.1 271,546 220,418 Unappropriated balance 48,598,366 26,182,493
Bonus shares issued 4.2 (110,250) - 48,601,563 26,286,128
Final dividend:
for the year ended June 30, 2018 5.2 (171,990) - 7.1 This represents the balance amount of distributable return to shareholders on account of increase in
for the year ended June 30, 2017 - (103,745) hydrocarbons production.
Balance at end of the year 602,415 613,109 2019 2018
5.1 This represents the amount of distributable profits for the year related to undistributable percentage return
8. DEFERRED LIABILITIES
reserve.
Provision for decommissioning cost 8.1 9,111,825 7,127,202
5.2 The Board of Directors in its meeting held on August 30, 2018 proposed a final cash dividend for the year Provision for employee benefits - unfunded 8.2 660,160 577,090
ended June 30, 2018 @ Rs 2.5 per share amounting to Rs 275.625 million, which was subsequently approved Provision for compensated leave absences 285,977 242,707
by the shareholders in Annual General Meeting held on October 18, 2018. Out of this, Rs 171.990 million has Deferred income - 5,337
been appropriated out of undistributed percentage return reserve while balance amount of Rs 103.635 million
10,057,962 7,952,336
represents undistributed guaranteed return for the year ended June 30, 2018.
5.3 The amount held in this reserve represents the balance of the percentage return reserve on Shareholders’ 8.1 Provision for decommissioning cost
Funds as referred to in the Revised Agreement. Balance at beginning of the year 7,127,202 6,741,532
2019 2018 Provision made during the year 1,056,909 371,078
Note (Rupees in thousand) Revision due to change in estimates 165,711 (705,829)
Unwinding of discount 762,003 720,421
6. OTHER RESERVES
Balance at end of the year 9,111,825 7,127,202
Capital redemption reserve fund 6.1 10,590,001 10,590,001
Self insurance reserve 6.2 2,600,000 1,600,000 The above provision is analysed as follows:
13,190,001 12,190,001 Wells 7,955,679 6,391,110

Production facilities including gathering lines 1,156,146 736,092
6.1 Capital Redemption Reserve Fund
9,111,825 7,127,202
This reserve was created for redemption of redeemable preference shares in the form of cash to the
preference shareholders. It is expected that cash outflows resulting from decommissioning will occur between 2019 to 2050.
2019 2018 2019 2018

(Rupees in thousand) Note (Rupees in thousand)
6.2 Self Insurance Reserve 8.2 Provision for employee benefits - unfunded
Balance at beginning of the year 1,600,000 600,000
Post retirement leave benefits for management employees 33.2 511,409 427,678
Transferred from profit and loss account 1,000,000 1,000,000
Post retirement medical benefits for management employees 33.2 75,047 74,893
Balance at end of the year 2,600,000 1,600,000 Pension plan for non-management employees 33.2 73,704 74,519
6.2.1 The Company has set aside a specific capital reserve for self insurance of general assets, vehicles and personal 660,160 577,090
accident of security personnel.
9.
10.
9.3
9.2
9.1
M a r i
Royalty
Creditors
P e t r o l e u m
Excise duty
Gratuity funds
Provident fund
Deferred income
General sales tax
Accrued liabilities
C o m p a n y
Mari field and Rigs

Allocation for the year
Workers’ Welfare Fund
Joint operating partners
Amount paid to the Fund

Balance at end of the year
Share in joint operations

Gas development surcharge
L i m i t e d
Redeemable preference shares
Balance at beginning of the year

TRADE AND OTHER PAYABLES
Workers’ Profit Participation Fund
matter subjudice in the apex courts.

Workers’ Profit Participation Fund

Retention and earnest money deposits
Commitments for capital expenditure

CONTINGENCIES AND COMMITMENTS
Gas Infrastructure Development Cess (GIDC)
194
Profit accrued on redeemable preference shares

at June 30, 2019 (2018: 6,568,536 preference shares).
Interest on delayed payments @ 45.00% (2018: 39.00%) per annum

9.3
9.2
9.1
Note
2019
2019
13,073,981
2,804,430
10,269,551
172,080
2,025,176
1,975,795
3,714
1,972,081
49,381
140,372,206
172,080
463,730
324,455
10,112
115,655
1,248,526
108,040,424
160,201
8,716,160
11,633,546
19,367
1,007,598
61,193
2,392,598
3,359,436
2,647,125
(1,853,096)
2018
2018
-
-
6,927,694
1,745,102
5,182,592
49,381
1,262,951
1,201,164
1,783
1,199,381
61,787
93,903,238
49,381
248,366
10,180
119,045
516,504
74,168,121
173,499
6,005,547
6,552,132
399,289
51,646
1,032,168
2,818,867
1,758,493
(1,213,570)
Further, 6,229,557 preference shares have not been claimed/redeemed by certain minority shareholders as
5,335,946 preference shares have not been issued as at June 30, 2019 due to pending resolution of issue
This includes amounts withheld by fertilizer companies due to Gas Infrastructure Development Cess (GIDC)
relating to deduction of withholding tax on issuance of bonus shares (2018: 5,335,946 preference shares).
11. PROPERTY, PLANT AND EQUIPMENT
Decommissioning
Cost–Mari field
and Joint Operations’ Stores and Capital
Buildings on Buildings on Drilling rig, Equipment Computers production facilities spares held for work in
Freehold Leasehold freehold leasehold Roads and tools and and general and allied Gathering Furniture Vehicles Vehicles including gathering capital progress
DESCRIPTION land land land land bridges equipment plant equipment lines and fixtures heavy light lines (note 3.3) expenditure (note 11.1) Total
As at July 1, 2017
Cost 694,963 102,224 1,182,439 784,957 199,779 3,570,171 6,604,581 439,147 2,693,375 129,113 689,332 467,410 411,104 1,643,387 703,867 20,315,849
Accumulated depreciation - 15,951 481,808 159,908 138,805 1,604,526 2,036,330 247,498 1,765,398 69,279 670,305 330,992 106,379 - - 7,627,179
Net book value 694,963 86,273 700,631 625,049 60,974 1,965,645 4,568,251 191,649 927,977 59,834 19,027 136,418 304,725 1,643,387 703,867 12,688,670
Year ended June 30, 2018

Opening net book value 694,963 86,273 700,631 625,049 60,974 1,965,645 4,568,251 191,649 927,977 59,834 19,027 136,418 304,725 1,643,387 703,867 12,688,670
Additions / transfers from
capital work in progress 5,504 - 31,700 - - 60,401 1,233,743 30,601 54,760 8,813 85,353 22,294 - 1,412,466 - 2,945,635
Additions to capital work in progress - - - - - - - - - - - - - - 3,909,308 3,909,308
Revision due to change in estimates of
provision for decommissioning cost - - - - - - - - - - - - (76,240) - - (76,240)
Disposals
Cost - - (1,731) - - (5,214) (62,634) (8,097) - (5,278) (15,899) (21,806) - - - (120,659)
Accumulated depreciation - - 368 - - 4,432 36,874 8,072 - 5,277 15,899 21,806 - - - 92,728
- - (1,363) - - (782) (25,760) (25) - (1) - - - - - (27,931)
Transfers - - - - - - - - - - - - - (1,194,135) (3,478,047) (4,672,182)
Transferred from exploration and
evaluation assets - cost - - - - - - 26,642 - - - - - - - - 26,642
Transferred from development and
production assets - cost - - - - - - 16,578 103 - 88 - - - - - 16,769
Depreciation charge - (1,487) (55,806) (35,488) (9,827) (287,672) (721,509) (83,887) (200,504) (8,970) (24,228) (76,925) (38,086) - - (1,544,389)
Net book value 700,467 84,786 675,162 589,561 51,147 1,737,592 5,097,945 138,441 782,233 59,764 80,152 81,787 190,399 1,861,718 1,135,128 13,266,282
As at July 1, 2018
Cost 700,467 102,224 1,212,408 784,957 199,779 3,625,358 7,818,910 461,754 2,748,135 132,736 758,786 467,898 334,864 1,861,718 1,135,128 22,345,122
Net book value 700,467 84,786 675,162 589,561 51,147 1,737,592 5,097,945 138,441 782,233 59,764 80,152 81,787 190,399 1,861,718 1,135,128 13,266,282
Year ended June 30, 2019

Opening net book value 700,467 84,786 675,162 589,561 51,147 1,737,592 5,097,945 138,441 782,233 59,764 80,152 81,787 190,399 1,861,718 1,135,128 13,266,282
Additions / transfers from
capital work in progress - - 41,156 73,005 - 132,818 1,033,988 51,402 582,627 7,998 452,077 439,427 - 855,440 - 3,669,938
Additions to capital work in progress - - - - - - - - - - - - - - 3,440,712 3,440,712
195

provision for decommissioning cost - - - - - - - - - - - - 341,278 - - 341,278
Disposals / adjustments
Cost - - 37,300 (29,821) 610 (42,808) 756,677 790 31,170 (311) (13,160) 692 - - (515) 740,624
Accumulated depreciation - - (13,828) 2 (793) 27,906 (755,587) (1,271) (31,181) (70) (6,537) 27,354 - - - (754,005)
- - 23,472 (29,819) (183) (14,902) 1,090 (481) (11) (381) (19,697) 28,046 - - (515) (13,381)
A n n u a l
Transferred from development and

production assets - cost - - 4,299 - - - 468,041 721 538,575 - 5,427 18,141 - 19,257 - 1,054,461
evaluation assets - cost - - - - - - - - - - - - - 47,496 - 47,496
Transfers - - - - - - - - - - - - - (837,237) (3,153,932) (3,991,169)
R e p o r t
Depreciation charge - (1,487) (57,596) (37,859) (9,791) (233,718) (859,680) (73,094) (213,522) (9,987) (40,317) (74,163) (28,172) - - (1,639,386)
Net book value 700,467 83,299 686,493 594,888 41,173 1,621,790 5,741,384 116,989 1,689,902 57,394 477,642 493,238 503,505 1,946,674 1,421,393 16,176,231
2 0 1 9
As at June 30, 2019

Cost 700,467 102,224 1,295,163 828,141 200,389 3,715,368 10,077,616 514,667 3,900,507 140,423 1,203,130 926,158 676,142 1,946,674 1,421,393 27,648,462
Net book value 700,467 83,299 686,493 594,888 41,173 1,621,790 5,741,384 116,989 1,689,902 57,394 477,642 493,238 503,505 1,946,674 1,421,393 16,176,231
Annual rates of depreciation (%) - 1-3 5 5 10 5-33.33 10 25 10 10 30 20

Property, plant and equipment includes Rs 3.37 million (2018: Rs 11.46 million), which represents the net book value of line heaters rented to an associated company, Foundation Power Company Daharki Limited. It also includes assets amounting to Rs 362.23 million
(2018: Rs 98.62 million), being Company’s share in joint operations operated by others (assets not in the possession of the Company).

2019 2018 11.4 Detail of property, plant and equipment disposed off during the year is as follows:
Net Sale Gain / Mode
11.1 Capital work in progress Description Cost Book value proceeds (loss) Particulars of purchaser of disposal
Stores and spares - 339,434 (Rupees in thousand)
Land, buildings, roads and bridges 409,995 195,521

Computers and allied equipment 1,261 13 171 158 Various employees of the Company Company policy
Plant, machinery and others 1,011,398 600,173
Vehicles - light 32,788 - - - Returned to Excise & Customs Returned
1,421,393 1,135,128 Drilling rigs, tools & equipment 41,275 13,368 - (13,368) Not applicable Scrap
75,324 13,381 171 (13,210)
11.2 The depreciation charge has been allocated as follows:
Operating expenses 1,003,374 959,904
11.5 Detail of significant immovable fixed assets as at June 30, 2019 is as follows:
Other income / (expenses):
Mari Seismic Unit - Net 196,869 71,831 Approximate
Description Location Area of Land
Mari Drilling Unit - Net 90,445 126,702
Mari Seismic Processing Centre - Net 3,783 17,943 Wells, production / processing facilities, housing colony/residential area,
Exploration and prospecting expenditure 200,793 210,837 field office, liaison office, warehouse and guest house Sindh 2,558.09 acres
Development and production assets 16,247 80,501 Land and Head Office building Islamabad 3.29 acres
Exploration and evaluation assets 127,875 76,671 Wells, production / processing facilities, residential area, field office and warehouse Balochistan 75.24 acres
1,639,386 1,544,389 Wells, production / processing facilities and guest house KPK 37 acres
Wells, production / processing facilities and field office / residential area Punjab 90.29 acres
11.3 Detail of property and equipment as at June 30, 2019 relating to Mari Seismic Unit is as follows:
Accumulated Net
Description Cost Depreciation Book value
Buildings on freehold land 20,170 5,715 14,455

Equipment and general plant 4,375,870 1,232,047 3,143,823
Computers and allied equipment 22,648 8,756 13,892
Furniture and fixtures 1,560 187 1,373
Vehicles 977,942 334,797 643,145
Capital work in progress 468,731 - 468,731
5,866,921 1,581,502 4,285,419


12. DEVELOPMENT AND PRODUCTION ASSETS 2019 2018

Producing fields
Wholly Joint Decommissioning
Description owned operations Sub total cost Total 13. EXPLORATION AND EVALUATION ASSETS
(Rupees in thousand) Balance at beginning of the year 2,689,549 5,972,108
As at July 1, 2017
Additions 13.1 4,740,662 2,623,232
Cost 5,644,543 5,161,015 10,805,558 1,248,034 12,053,592
Stores and spares held for capital expenditure
Accumulated amortization (3,184,699) (751,455) (3,936,154) (707,560) (4,643,714)
transferred to property, plant and equipment (47,496) -
Net book value 2,459,844 4,409,560 6,869,404 540,474 7,409,878
Transferred to development and production assets (676,465) (5,291,479)
Year ended June 30, 2018 Tangible assets transferred to property, plant and equipment - (26,642)
Opening net book value 2,459,844 4,409,560 6,869,404 540,474 7,409,878 Revision due to change in estimates of provision for
Additions 1,599,295 131,740 1,731,035 249,194 1,980,229 decommissioning cost 160,619 21,855
Tangible assets transferred to Cost of dry and abandoned wells written off (313,321) (609,525)
property, plant and equipment - (16,769) (16,769) - (16,769) Balance at end of the year 6,553,548 2,689,549
evaluation assets - 4,860,239 4,860,239 431,240 5,291,479 13.1 It includes additions amounting to Rs 287.426 million (2018: Rs 121.884 million) on account of provision for
Revision due to change in estimates decommissioning cost.
of provision for decommissioning cost (65,844) - (65,844) (585,600) (651,444) 2019 2018
Amortization for the year (191,366) (1,763,595) (1,954,961) (171,540) (2,126,501)
Net book value 3,801,929 7,621,175 11,423,104 463,768 11,886,872
14. LONG TERM LOANS AND ADVANCES
As at July 1, 2018 Considered good - secured
Cost 7,177,994 10,136,225 17,314,219 1,342,868 18,657,087 Executives 14.1 7,410 7,885
Accumulated amortization (3,376,065) (2,515,050) (5,891,115) (879,100) (6,770,215) Other employees 14.1 55,374 49,583
Net book value 3,801,929 7,621,175 11,423,104 463,768 11,886,872
62,784 57,468
Year ended June 30, 2019 Less: amount due within twelve months shown
Opening net book value 3,801,929 7,621,175 11,423,104 463,768 11,886,872 under current loans and advances 19
Additions 2,349,964 80,240 2,430,204 769,483 3,199,687 Executives 5,665 6,148
Tangible assets transferred to Other employees 17,364 15,909
property, plant and equipment - (1,035,204) (1,035,204) - (1,035,204)
23,029 22,057
evaluation assets - 598,611 598,611 77,854 676,465 39,755 35,411
Stores and spares held for capital
14.1 Reconciliation of carrying amount of loans and advances to executives and other employees is as follows:
expenditure transferred to
property, plant and equipment - (19,257) (19,257) - (19,257) Repayments /
Left over inventory transferred to Balance as at Disbursements transfers during Balance as at
July 1, 2018 during the year the year June 30, 2019
stores and spares - (41,231) (41,231) - (41,231)
provision for decommissioning cost (190,992) (10,270) (201,262) (134,924) (336,186) Executives 7,885 11,918 12,393 7,410
Amortization for the year (287,877) (1,109,976) (1,397,853) (177,719) (1,575,572) Other employees 49,583 32,840 27,049 55,374
Net book value 5,673,024 6,084,088 11,757,112 998,462 12,755,574
Total 57,468 44,758 39,442 62,784
As at June 30, 2019
Year ended June 30, 2018 53,714 51,930 48,176 57,468
Cost 9,336,966 9,709,114 19,046,080 2,055,281 21,101,361
Accumulated amortization (3,663,942) (3,625,026) (7,288,968) (1,056,819) (8,345,787)
Net book value 5,673,024 6,084,088 11,757,112 998,462 12,755,574

14.2 Loans and advances to employees are for general purpose and for house rent advance which are recoverable 2019 2018
in 12 to 60 equal monthly instalments and are secured by an amount due to the employee against provident
fund. These loans and advances are interest free. These do not include any amount receivable from the Chief
18. TRADE DEBTS
Executive and Directors.
Due from associated companies - considered good
14.3 The maximum amount due from executives at the end of any month during the year was Rs 9.12 million
Fauji Fertilizer Company Limited 54,024,034 33,613,548
(2018: Rs 17.79 million).
Foundation Power Company Daharki Limited 5,962,244 4,498,109
14.4 It includes house rent advance obtained by Brig. Saleem Mahmood Khan (Retd) exceeding Rs 1 million, which 59,986,278 38,111,657
is recoverable in 12 equal monthly installments and is secured by an amount due against provident fund. Due from others - considered good
2019 2018 Fatima Fertilizer Company Limited 41,066,247 33,244,678
Engro Fertilizer Limited 16,828,625 9,948,641
Pak Arab Fertilizers Limited 246 251,735
15. LONG TERM DEPOSITS AND PREPAYMENTS
Sui Southern Gas Company Limited 4,625,461 2,382,854
Deposits 230,979 62,870 Sui Northern Gas Pipelines Limited 1,872,400 1,164,932
Prepayments 20 20 Central Power Generation Company Limited 23,807,948 9,158,284
230,999 62,890 Byco Petroleum Pakistan Limited 49,192 349,192
National Refinery Limited 88,191 62,779
16. DEFERRED INCOME TAX ASSET Attock Refinery Limited 429,657 500,418
Balance at beginning of the year 1,819,166 2,162,308 Pakistan Refinery Limited 101,687 49,915
EGAS (Private) Limited 34,784 15,238
(Credit) for the year:
Pak Arab Refinery Limited 26,288 26,604
Statement of profit or loss (1,162,960) (341,193)
Petrosin CNG (Private) Limited 22,874 28,067
Statement of comprehensive income (5,059) (1,949)
148,939,878 95,294,994
(1,168,019) (343,142)
Balance at end of the year 651,147 1,819,166 18.1 Trade debts due from associated companies are net of provision for doubtful debts amounting to Rs 238.00
million (2018: Rs 238.00 million).
16.1 The balance of deferred tax is in respect of following temporary differences:
18.2 The maximum aggregate amount due from associated companies at the end of any month during the year
2019 2018
Note (Rupees in thousand) was Rs 60,224.28 million (2018: Rs 38,111.66 million).
18.3 Trade debts include amounts withheld by fertilizer companies amounting to Rs 108,784 million (2018: Rs
Exploration expenditure charged to statement of profit or loss
75,476 million) due to Gas Infrastructure Development Cess (GIDC) matter subjudice in the apex courts,
but to be claimed in future years against tax labilities 4,148,756 3,898,952
resulting in a corresponding payable to the Government of Pakistan.
Accounting and tax depreciation / amortization (3,876,534) (2,340,616)
Provision for employee benefits - unfunded 302,764 184,669 2019 2018
Provision for doubtful debts 76,161 76,161
651,147 1,819,166 19. LOANS AND ADVANCES
17. STORES AND SPARES Considered good

Current portion of long term loans and advances 14
Stores 17.1 1,683,527 223,152
Executives 5,665 6,148
Spares 665,864 447,899
Other employees 17,364 15,909
2,349,391 671,051
23,029 22,057
17.1 Stores include share in joint operations operated by the Company 149,239 105,665 Advances to employees against expenses 141,978 44,698
Advances to suppliers and others 2,191,203 1,359,239
Receivables from joint operating partners 2,396,250 1,106,350
4,752,460 2,532,344

2019 2018 2019 2018

(Rupees in thousand) (Rupees in thousand)
20. SHORT TERM INVESTMENTS 23.1 This represents sale of gas as per details below:
Local currency term deposits with banks 20,700,000 8,437,354 Mari field 105,010,447 88,944,918
Sujawal block 5,671,868 4,548,984
20.1 Short term investments have a maximum maturity period of 3 months, carrying profit ranging from 12.05% to Zarghun field 1,419,814 1,250,305
13.10% (2018: 5.95% to 6.75%) per annum. Hala block 1,424,855 1,239,320
2019 2018 Sukkur block 31,907 77,597
Karak block 1,106,650 995,254
21. SHORT TERM PREPAYMENTS 114,665,541 97,056,378
Prepaid insurance 73,543 35,628 23.2 This represents sale of crude oil as per details below:
Others 19,376 31,086
Karak block 1,826,695 1,809,866
92,919 66,714 Ghauri block 191,707 518,550
Ziarat block 11,838 -
22. CASH AND BANK BALANCES
2,030,240 2,328,416
Cash in hand 1,952 1,654
Balances with banks on: 23.3 This represents sale of condensate as per details below:
Deposit accounts 22.1 6,555,803 7,191,349 Mari Field 185,718 134,300
Current accounts 78,063 75,905 Sujawal block 411,662 355,216
6,633,866 7,267,254 Hala block 92,122 59,147
6,635,818 7,268,908 Zarghun field 6,525 5,995
Karak block 157,686 149,717
22.1 These include foreign currency accounts amounting to US$ 11.50 million (2018: US$ 6.55 million) having 853,713 704,375
mark-up of 0.50% (2018: 0.25%) per annum. The mark-up for local currency accounts ranges from 6.90% to
10.25% (2018: 3.05% to 6.00%) per annum. 23.4 This represents sale of LPG from Hala block.
22.2 The unavailed credit facilities available to the Company include financing, Letter of Credits/ Letter of Guarantee, 23.5 Sale of gas includes sale from Mari Field, Sukkur block, Zarghun block and Aqeeq well of Sujawal block
Credit Card and leasing amounting to Rs 2,175.98 million (2018: Rs 1,021.26 million). invoiced on provisional prices. There may be adjustment in sales upon issuance of final wellhead prices
notification by Oil and Gas Regulatory Authority (OGRA).
2019 2018
23. GROSS SALES TO CUSTOMERS
Sale of:
Gas 23.1 114,665,541 97,056,378
Crude Oil 23.2 2,030,240 2,328,416

Less: Transportation charges 59,085 64,285
1,971,155 2,264,131
Condensate 23.3 853,713 704,375

Less: Transportation charges 23,878 26,261
829,835 678,114
Liquefied Petroleum Gas (LPG) 23.4 1,723 -

Own consumption 73,849 44,216
117,542,103 100,042,839

2019 2018 24.1 Operating expenses includes expenses (excluding depreciation and amortization) relating to joint operations
as follows:
24. OPERATING EXPENSES 2019 2018
Salaries, wages and benefits 24.2 5,748,558 4,100,790
Rent, rates and taxes 230,261 212,608 Sukkur block 80,353 68,018
Legal and professional services 54,590 38,077 Hala block 210,155 270,672
Fuel, light, power and water 235,571 167,154 Kohat block 748 1,428
Maintenance and repairs 627,160 775,592 Karak block 403,750 371,995
Insurance 68,492 49,451 Ziarat block 70,012 -
Depreciation of property, plant and equipment 1,003,374 959,904 Sujawal block 311,680 383,868
Amortization of development and production assets Zarghun field 170,340 163,237
and decommissioning cost 1,575,572 2,126,501 Ghauri block 203,159 161,200
Employees medical and welfare 425,827 355,358 1,450,197 1,420,418
Field and other services 1,709,974 1,353,158
Travelling 167,182 101,042 24.2 These include operating lease rentals amounting to Rs 72.65 million (2018: Rs 51.80 million) in respect of
Communications 31,666 30,794 company leased vehicles provided to eligible employees.
Printing and stationery 17,915 17,309 2019 2018
Office supplies 23,110 18,819
Licences and equipment maintenance 154,141 94,678
24.3 Auditor’s remuneration
Auditor’s remuneration 24.3 3,130 2,936
Mobile dispensary and social welfare 445,037 144,131 Statutory audit 1,610 1,562
Training 224,492 130,767 Review of half yearly accounts, special reports and other certifications 1,234 1,150
Advertisement 19,408 13,827 Out of pocket expenses 286 224
Books and periodicals 1,123 1,105 3,130 2,936
Public relations and social activities 14,505 22,365
Directors’ fee and expenses 19,288 13,273 24.4 Recoveries from joint operating partners
Subscriptions 20,239 15,732 Time write cost 855,087 629,907
Reservoir study and production logging 24,536 22,111 Overheads 328,055 216,500
Miscellaneous 72,520 69,787 Computer and equipment support cost 21,555 5,451
12,917,671 10,837,269 1,204,697 851,858
Less: Recoveries from joint operating partners 24.4 1,204,697 851,858
11,712,974 9,985,411

2019 2018 2019 2018

(Rupees in thousand) Note (Rupees in thousand)
25. EXPLORATION AND PROSPECTING EXPENDITURE 26. OTHER CHARGES

Mari Field 25,743 14,714 Workers’ Profit Participation Fund 1,972,081 1,199,381
Joint operations Workers’ Welfare Fund 463,730 248,366
Prospecting expenditure 3,968,942 2,690,600 2,435,811 1,447,747

Cost of dry and abandoned wells written off 313,321 609,525
27. OTHER INCOME / (EXPENSES)
4,282,263 3,300,125
Mari Seismic Unit income / (loss) - net 27.1 48,236 (321,247)
4,308,006 3,314,839
Mari Drilling Unit loss - net 27.2 (69,122) (370,615)
2019 2018 Mari Seismic Processing Centre loss - net 27.3 (148,773) (37,357)
Working interest (%) Liquidated damages 510,126 -
OPERATED BLOCKS Line heaters rental income 8,224 7,169
Zarghun Field 35.00 35.00 98,763 155,002 Gain on disposal of property and equipment 158 31,866
Ziarat Block 60.00 60.00 132,084 64,981 Miscellaneous (22,762) 108,338
Karak Block 60.00 60.00 (4,446) 1,251
326,087 (581,846)
Hanna Block * 100.00 100.00 31,350 12,944
Harnai Block 60.00 60.00 15,269 35,876 27.1 Break-up of Mari Seismic Unit income / (loss) - net is as follows:
Sujawal Block 100.00 100.00 (80,907) 495,780
Income:
Sukkur Block 100.00 58.82 990,870 867,224
Ghauri Block 65.00 65.00 688,550 517,561 Mari Seismic Unit income 1,268,513 110,927
Peshawar East Block 98.16 98.16 16,887 12,453 Interest income on bank deposits 42,350 39,444
Bannu West Block 55.00 55.00 1,354,731 555,530 1,310,863 150,371
Block 28 ** 95.00 - 15,191 - Less: Expenses
Khetwaro Block * 51.00 51.00 (1,696) 2,518
Operating expenses 1,065,730 372,616
3,256,646 2,721,120
Depreciation of property and equipment 196,869 71,831
NON - OPERATED BLOCKS Loss on disposal of property and equipment - 27,109
Hala Block 35.00 35.00 390,145 (56,514) Bank charges 28 62
Kohat Block 33.33 20.00 8,928 (7,963) 1,262,627 471,618
Kohlu Block 30.00 30.00 8,459 7,376
48,236 (321,247)
Kalchas Block 50.00 50.00 193,899 635,612
Shah Bandar Block 32.00 32.00 60,802 (12,223)
27.2 Break-up of Mari Drilling Unit loss - net is as follows:
Bela West Block 25.00 - 363,384 -
Zindan Block * 35.00 35.00 - 7,009 Income:
Block 28 ** - 95.00 - 5,708 Rig rental income 519,178 233,437
1,025,617 579,005 Less: Expenses
4,282,263 3,300,125
Operating expenses 484,487 477,350
* Company has relinquished these blocks and GOP’s approval is pending in this respect. Depreciation of property and equipment 90,445 126,702
Loss on disposal of property and equipment 13,368 -
** Transfer of operatorship of the block from OGDCL to MPCL is approved by GOP during the year.
588,300 604,052
25.1 Exploration and prospecting expenditure represents cost other than drilling expenditure directly charged to (69,122) (370,615)
statement of profit or loss as referred in note 3.6 to these financial statements.

2019 2018 2019 2018

(Rupees in thousand) Restated
27.3 Break-up of Mari Seismic Processing Centre loss - net is as follows: 31. EARNINGS PER SHARE - BASIC AND DILUTED
Income: Profit for the year (Rupees in thousand) 24,327,088 15,374,340
Mari Seismic Processing Centre income 55,677 67,467 Distributable earnings (Rupees in thousand) 759,843 709,928
Number of ordinary shares outstanding (in thousand) 121,275 121,275
Less: Expenses
Earnings per ordinary share (in Rupees) 200.59 126.77
Operating expenses 200,667 86,881 Distributable earnings per ordinary share (in Rupees) 6.27 5.85
Depreciation of property and equipment 3,783 17,943
204,450 104,824 There is no dilutive effect on the basic earnings per ordinary share of the Company.
(148,773) (37,357) Total number of shares and earnings per share for the year ended June 30, 2018 have been restated taking
into account the effect of bonus shares @ 10% issued during the year as explained in note 4.2.
28. FINANCE INCOME
31.1 Distributable earnings reflect return to shareholders for the year ended June 30, 2019 @ 44.29% (2018:
Interest income on bank deposits 594,025 421,587 44.40%) per annum on shareholders’ funds as referred to in the “Revised Agreement”.
Interest income on short term investments 1,173,281 276,840
Interest income on delayed payments - 67,189 32. CASH AND CASH EQUIVALENTS
1,767,306 765,616 For the purpose of statement of cash flows, cash and cash equivalents comprise of the following:
29. FINANCE COST 2019 2018

Interest on long term financing - 26,567
Unwinding of discount on provision for decommissioning cost 762,003 720,421 Cash and bank balances 6,635,818 7,268,908
Exchange loss / (gain) 34,008 (110,444) Short term investments 20,700,000 8,437,354
Interest on Workers’ Profit Participation Fund 3,714 1,783
27,335,818 15,706,262
Bank charges 2,035 1,401
801,760 639,728 33. EMPLOYEE BENEFITS
The results of the actuarial valuation carried out as at June 30, 2019 and June 30, 2018 are as follows:
30. PROVISION FOR TAXATION
Current 9,218,286 4,576,011 33.1 Funded benefits

Deferred 1,162,960 341,193 2019 2018
10,381,246 4,917,204 Non- Non-

Management Management Management Management
Gratuity Gratuity Gratuity Gratuity
2019 2018 (Rupees in thousand)
(Percentage)
Reconciliation of payable to defined benefit plan

30.1 Reconciliation of effective tax rate Present value of defined benefit obligations 2,336,934 992,460 1,613,836 818,258
*Applicable tax rate 51.67 49.45 Fair value of plan assets (1,536,696) (785,100) (1,335,878) (696,927)
Tax effect of depletion allowance and royalty payments (20.15) (22.44) Liability recognized in statement of financial position 800,238 207,360 277,958 121,331
Others (1.61) (2.78)
Movement in payable to defined benefit plan
Effective tax rate 29.91 24.23
Balance as at beginning of year 277,958 121,331 152,637 28,096
* The applicable tax rate is the weighted average of tax rates applicable to income from oil and gas concessions Expense for the year 800,238 207,360 277,958 121,331
and income from other activities. 1,078,196 328,691 430,595 149,427
Contribution to fund during the year (277,958) (121,331) (152,637) (28,096)
30.2 Management has assessed that tax provision made in the financial statements is sufficient. Income tax Balance as at end of year 800,238 207,360 277,958 121,331
liability as per financial statements for the last three tax years is Rs 6.7 billion as compared to Rs 5.5 billion as
per latest tax assessments.

Non-
2019 2018
Management Management
Non- Non- Gratuity Gratuity
Management Management Management Management
Gratuity Gratuity Gratuity Gratuity
(Rupees in thousand) Projected benefit payments from gratuity fund are as follows:
For the year 2020 324,309 80,117
Movement in the present value of defined benefit obligation
For the year 2021 317,130 204,872
Present value of defined benefit obligation at beginning
For the year 2022 180,528 117,307
of the year 1,613,836 818,258 1,375,739 723,867
For the year 2023 229,178 146,604
Current service cost 169,473 36,314 149,356 31,644
For the year 2024 502,606 190,018
Past service cost 430,352 - - -
For the years 2025-29 2,660,930 1,111,685
Interest cost on defined benefit obligation 144,206 73,459 110,280 53,142
Actual benefits paid during the year (219,037) (44,271) (95,431) (59,844) 33.2 Un-funded benefits
Benefits payable to outgoing members - (34,206) - -
2019 2018
Re-measurements: Actuarial loss on obligation 198,104 142,906 73,892 69,449
Non- Non-
Present value of defined benefit obligation at end of the year 2,336,934 992,460 1,613,836 818,258 Management Management Management Management
Post Post Post Post
Movement in fair value of plan assets
Retirement Retirement Pension Retirement Retirement Pension
Balance as at beginning of year 1,335,878 696,927 1,223,102 695,771 Leaves Medical Leaves Medical
Contributions during the year 277,958 121,331 152,637 28,096 (Rupees in thousand)
Interest income on plan assets 119,190 62,464 98,450 50,917
Benefits payable by the Fund - (34,206) - - Reconciliation of payable to defined benefit plan
Remeasurement gain / (loss) on plan assets 22,707 (17,145) (42,880) (18,013) Present value of defined benefit obligations 511,409 75,047 73,704 427,678 74,893 70,494
Benefits paid during the year (219,037) (44,271) (95,431) (59,844) Movement in payable to defined benefit plan
Balance as at end of year 1,536,696 785,100 1,335,878 696,927 Balance at beginning of the year 427,678 74,893 74,519 363,152 73,148 70,494
Expense / (credit) for the year 125,749 2,886 (815) 80,731 5,214 4,025
Plan assets comprise of:
553,427 77,779 73,704 443,883 78,362 74,519
Deposit with banks and mutual funds 1,536,696 785,100 1,335,878 696,927
Payments during the year (42,018) (2,732) - (16,205) (3,469) -
Expense for the year: Balance at end of the year 511,409 75,047 73,704 427,678 74,893 74,519
Recognized in statement of profit or loss Expense for the year:
Current service cost 169,473 36,314 149,356 31,644 Recognized in statement of profit or loss
Past service cost 430,352 - - - Current service cost 44,137 1,924 2,600 38,091 1,855 2,320
Interest cost 144,206 73,459 110,280 53,142 Interest cost 38,491 6,548 6,808 28,144 5,624 5,532
Interest income on plan assets (119,190) (62,464) (98,450) (50,917) Immediate recognition of actuarial loss / (gain) 43,121 - - 14,496 - -
624,841 47,309 161,186 33,869 125,749 8,472 9,408 80,731 7,479 7,852
Recognized in statement of comprehensive income Recognized in statement of comprehensive income
Remeasurement loss / (gain) on obligations
Remeasurement loss / (gain) on obligations:
- effect of experience adjustment 198,104 142,906 73,892 69,449
Remeasurement loss / (gain) on plan assets (22,707) 17,145 42,880 18,013 Effect of experience adjustment - (5,586) 4,395 - (2,265) 433
Effect of changes in financial assumptions - - (14,618) - - (4,260)
175,397 160,051 116,772 87,462
- (5,586) (10,223) - (2,265) (3,827)
Total expense for the year 800,238 207,360 277,958 121,331
Total expense for the year 125,749 2,886 (815) 80,731 5,214 4,025
Actual return on plan assets 141,897 45,319 55,570 32,904
33.3 The principal actuarial assumptions used in the actuarial valuation of the defined benefit plans are
as follows:
2019 2018
(Per annum)
- Discount rate 14.00% 9.00%

- Expected rate of salary increase 14.00% 9.00%
- Expected rate of pension increase 9.25% 4.25%
- Increase in cost of medical benefits 14.00% 9.00%

33.4 Sensitivity analysis and weighted average number of years: the results of the respective segment. Accordingly, information about segment assets and liabilities is not
presented.
Effect on payable to defined benefit plan of
Weighted average
number of years Discount rate Salary/Medical rate Exploration Mari Mari
as at 0.5% point 0.5% point and Seismic Drilling Total
June 30, 2019 increase decrease increase decrease Production Unit Unit
(Rupees in thousand) (Rupees in thousand) (Rupees in thousand)
Management Gratuity 7.57 (85,518) 91,598 91,184 (85,882) Year ended June 30, 2019
Non-Management Gratuity 5.24 (25,397) 26,646 26,527 (25,507) Revenue from external customers 117,542,103 1,268,513 519,178 119,329,794
Management Post Retirement Medical 7.58 (2,844) 3,050 34 (34) Inter-segment revenue - 1,381,252 1,605,831 2,987,083
117,542,103 2,649,765 2,125,009 122,316,877
33.5 The employee benefit expenses (funded and unfunded) including provident fund expense for the
year amounting to Rs 83.03 million (2018: Rs 72.50 million) are recognized in statement of profit or Operating expenses 9,134,028 2,189,748 1,173,539 12,497,315
Depreciation and amortization 2,578,946 397,662 234,567 3,211,175
loss for the year as per following details:
Cost of dry and abandoned wells written off 313,321 - - 313,321
2019 2018
Description (Rupees in thousand) Other income / (expenses) 346,973 - (13,368) 333,605
Finance income 1,767,306 42,350 - 1,809,656
Finance cost 801,760 28 - 801,788
Salaries, wages and benefits - Operating expenses 750,590 286,380
Profit before taxation 34,729,220 104,677 703,535 35,537,432
Employees medical and welfare - Operating expenses 44,301 16,047
Mobile dispensary and social welfare - Operating expenses 16,595 6,102 Year ended June 30, 2018
Mari Drilling Unit - Other income 54,871 41,333 Revenue from external customers 100,042,839 110,927 233,437 100,387,203
Mari Seismic Unit - Other income 22,741 9,389 Inter-segment revenue - 1,182,051 968,652 2,150,703
Mari Seismic Processing Centre - Other income 9,707 4,370 100,042,839 1,292,978 1,202,089 102,537,906
898,805 363,621 Operating expenses 6,899,006 968,815 947,876 8,815,697
Depreciation and amortization 3,086,405 282,668 283,874 3,652,947
Cost of dry and abandoned wells written off 609,525 - - 609,525
34. OPERATING SEGMENTS
Other income 110,016 27,109 - 137,125
34.1 Basis of segmentation Finance income 765,616 39,444 - 805,060
As explained in note 3.23, the Company has three strategic divisions based on the main types of activities, Finance cost 639,728 62 - 639,790
which are considered its reportable segments. The following summary describes the operations of each Profit / (loss) before taxation 20,983,406 53,768 (29,661) 21,007,513
reportable segment:
34.3 Reconciliation of segments’ revenue and profit before taxation
Reportable segments Operations 2019 2018
Exploration and Production includes all upstream business activities
Mari Seismic Unit includes 2D/3D seismic data acquisition i) Revenue from reportable segments 122,316,877 102,537,906
Mari Drilling Unit includes onshore drilling services Elimination of inter-segment revenue - Mari Seismic Unit (1,381,252) (1,182,051)
Elimination of inter-segment revenue - Mari Drilling Unit (1,605,831) (968,652)
The Chief Executive Officer and the Board of Directors review the internal management reports of each
division quarterly. Revenue of the Company 119,329,794 100,387,203
34.2 Information about reportable segments ii) Revenue of the Company comprises:
Information related to each reportable segment is set below. Segment profit / (loss) before tax is used to - Gross sales to customers 117,542,103 100,042,839
measure performance because management believes that this information is the most relevant in evaluating - Mari Seismic Unit - other income / (expenses) 1,268,513 110,927
- Mari Drilling Unit - other income / (expenses) 519,178 233,437
119,329,794 100,387,203

2019 2018 not available have been assessed by reference to internal credit ratings determined based on their historical
information for any defaults in meeting obligations.
iii) Profit before taxation from reportable segments 35,537,432 21,007,513 Rating 2019 2018
Elimination of inter-segment profit - Mari Seismic Unit (56,441) (375,015)
Elimination of inter-segment profit - Mari Drilling Unit (772,657) (340,954)
Trade debts
Profit before taxation of the Company 34,708,334 20,291,544 Counterparties with external credit rating A1+ 118,425,563 81,894,777
A1 6,497,861 3,547,786
Other information A2 136,717 301,649
Revenue from external customers is disclosed in note 23 and note 27.
Counterparties without external credit rating 23,879,737 9,550,782
Revenue from major customers related to sale of hydrocarbons constitutes 97% of the total revenue from
148,939,878 95,294,994
sale of hydrocarbons during the year ended June 30, 2019 (2018: 97%).
Amortized Cost Loans and advances

2019 2018 Counterparties without external credit rating
Joint operating partners and employees with no default in the past 2,419,279 1,128,407
35. FINANCIAL INSTRUMENTS

Interest accrued
35.1 Financial assets and liabilities Counterparties with external credit rating A1+ 100,302 100,542
Financial assets A1 5,445 2,641
Maturity up to one year 105,747 103,183
Trade debts 148,939,878 95,294,994

Short term investments
Loans and advances 2,419,279 1,128,407
Counterparties with external credit rating A1+ 18,700,000 7,837,354
Interest accrued 105,747 103,183
A1 2,000,000 600,000
Short term investments 20,700,000 8,437,354
Cash and bank balances 6,635,818 7,268,908 20,700,000 8,437,354
Maturity after one year

Bank balances
Long term loans and advances 39,755 35,411
Counterparties with external credit rating A1+ 6,606,549 7,266,568
Long term deposits 230,979 62,870
A1 27,317 686
179,071,456 112,331,127
6,633,866 7,267,254
Financial liabilities
Long term loans and advances
Maturity up to one year Counterparties without external credit rating
Trade and other payables 8,586,119 5,790,399 Receivable from employees with no default in the past 39,755 35,411
Unclaimed dividend 32,563 19,371
Unpaid dividend 7,544 11,514 Long term deposits
Maturity after one year Counterparties without external credit rating
Provision for compensated leave absences 285,977 242,707 Deposits with counter parties with no default in the past 230,979 62,870
8,912,203 6,063,991
35.3 Financial risk management
35.2 Credit quality of financial assets 35.3.1 Financial risk factors

The credit quality of Company’s financial assets have been assessed below by reference to external credit The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk
ratings of counterparties determined by the Pakistan Credit Rating Agency Limited (PACRA), JCR - VIS Credit (including currency risk, interest rate risk and price risk). The Company’s overall risk management policy
Rating Company Limited (JCR-VIS) and Moody’s. The counterparties for which external credit ratings were focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the
Company’s financial performance.

a) Credit risk Banks

Credit risk is the risk of financial loss to the Company on a financial asset if counterparty fails to meet its The Company limits its exposure to credit risk by maintaining bank accounts only with approved counterparties
contractual obligations and principally arises from trade debts and cash and cash equivalents. To manage that have a credit rating of at least A. Investments of surplus funds are made in a safe and secure manner
credit risk, the Company maintains procedures covering the function for credit approvals, granting and while ensuring optimum return and liquidity. Given these high credit ratings, strict regulations by the State
renewal of counterparty limits and monitoring of exposures against these limits. As part of these processes, Bank of Pakistan and no history of default, management does not expect any counterparty to fail to meet its
the financial viability of all counterparties is regularly monitored and assessed. obligations and accordingly, credit risk is considered very low.
Financial assets are considered to be credit-impaired when there is reasonable and supportable evidence that Others
one or more events that have a detrimental impact on the estimated future cash flows of the financial asset Advances to employees are secured by an amount due to the employee against provident fund, hence, the
have occurred. This includes observable data concerning significant financial difficulty of the counterparty; risk of loss is considered minimal by the management. The relationship with the joint operating partners
a breach of contract; it becoming probable that the counterparty will enter bankruptcy or other financial re- is governed under Petroleum Concession Agreements (PCAs) signed by the Government of Pakistan, the
organization because of financial difficulties. Where the Company has no reasonable expectation of recovering Company and its respective joint operating partners with the prior approval of the Ministry of Petroleum
a financial asset in its entirety or a portion thereof for example where all legal avenues for collection of and Natural Resources, the Government of Pakistan. Various avenues are available for the recovery of dues
amounts due have been exhausted, the financial asset (or relevant portion) is written off. from joint operating partners including engaging the regulator, right to forfeit working interest, assignment of
The Company conducts transactions with the following major types of counterparties: invoices etc. Based on above and considering there is no history of default by any counter party, management
considers the risk of default as very low. In respect of deposits, the management does not expect any
Customers counterparty to fail to meet its obligations and accordingly, credit risk is considered very low.
Trade debts are essentially due from fertilizer companies, power generation companies, distribution companies
and refineries and the Company does not expect these companies to fail to meet their obligations. b) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
An impairment analysis is performed at each reporting date in accordance with impairment requirements of
liabilities.
IFRS 9. The Company evaluates the concentration of risk with respect to trade debts as insignificant, as the
oil and gas industry in Pakistan is highly regulated, supported by the GOP and there is no history of default The Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient
by any of the customers in the past. The Company considers current and forward looking information on liquidity to meet its liability when due under both normal and stress conditions, without incurring unacceptable
macro economic factors affecting the ability of the customers to settle the receivables and applies the IFRS losses or risking damage to the Company’s reputation. The Company maintains sufficient cash and bank
9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for balances and the Company’s financial assets are in excess of financial liabilities by Rs 170,159 million (2018:
trade debts. Rs 106,267 million).
As of June 30, 2019, trade debts (excluding amounts mentioned in note 18.3) of Rs 28,314 million (2018: Rs The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the
10,638 million) were past due but not impaired. The ageing analysis of past due trade debts is as follows: remaining period at the date of statement of financial position to the maturity date. The amounts disclosed in
the table are undiscounted cash flows:
2019 2018
(Rupees in thousand) Less than Between Over
1 year 1 to 5 years 5 years
Past due but Doubtful debts Past due but Doubtful debts
not impaired provided for not impaired provided for
Due from associated companies As at June 30, 2019

Past due 0-30 days 455,208 - 279,112 - Trade and other payables 8,586,119 - -
Past due 30-60 days 464,951 - 341,341 - Unclaimed dividend 32,563 - -
Past due 60-90 days 442,991 - 319,098 - Unpaid dividend 7,544 - -
Provision for compensated leave absences - - 285,977
Over 90 days 3,583,998 238,000 1,844,454 238,000
4,947,148 238,000 2,784,005 238,000
As at June 30, 2018
Due from others Trade and other payables 5,790,399 - -
Unclaimed dividend 19,371 - -
Past due 0-30 days 3,394,824 - 1,060,681 -
Unpaid dividend 11,514 - -
Past due 30-60 days 3,164,458 - 459,625 -
Provision for compensated leave absences - - 242,707
Past due 60-90 days 2,108,418 - 520,512 -
Over 90 days 14,937,560 - 6,051,419 -
c) Market risk
28,552,408 238,000 10,876,242 238,000
Market risk is the risk that changes in market prices will affect the Company’s income or the value of its
holdings of financial instruments. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimizing the return on financial instruments.

i) Currency risk ii) Interest rate risk

Currency risk is the risk that changes in foreign exchange rates will affect the Company’s income or the value Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will
of its holdings of financial instruments. The objective of currency risk management is to manage and control fluctuate because of changes in market interest rates.
currency risk exposures within acceptable parameters, while optimizing the return on financial instruments. At the reporting date, the interest rate profile of the Company’s interest-bearing financial instruments was:
Exposure to foreign currency risk 2019 2018

The Company’s exposure to currency risk is as follows:
2019 2018 2019 2018 Financial assets

(Rupees in thousand) (US$ in thousand) Bank balances 6,555,803 7,191,349
Short term investments 20,700,000 8,437,354
Cash and bank balances 1,891,704 796,606 11,500 6,551
Trade debts 8,574 1,591 52 13 27,255,803 15,628,703
Loans and advances 2,396,250 1,106,350 14,567 9,098
The effective interest rates for the financial assets are mentioned in respective notes to the financial
Trade and other payables (3,108,355) (1,448,460) (18,896) (11,912)
statements.
Net financial assets 1,188,173 456,087 7,223 3,750
Interest rate sensitivity analysis
The following significant exchange rates applied during the year:
At June 30, 2019 if interest rates had been 50 basis points higher/ lower and all other variables were held
Average rate Closing rate constant, the Company’s profit after tax for the year ended June 30, 2019 would increase/ decrease by Rs 659
2019 2018 2019 2018
million (2018: increase/ decrease by Rs 367 million).
(Rupees) (Rupees)
iii) Price risk

US$ 1 137.67 110.59 164.50 121.60
Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
Foreign currency sensitivity analysis because of changes in market prices (other than those arising from interest rate risk or currency risk), whether
A 10 percent variation of the Pak Rupee against the US$ at June 30, would have affected profit or loss after those changes are caused by factors specific to the individual financial instrument or its issuer, or factors
tax by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, affecting all similar financial instruments traded in the market.
remain constant.
The Company does not have financial assets and liabilities whose fair value or future cash flows will fluctuate
Change in foreign Effect Effect
because of changes in market prices.
exchange on profit on equity
rates after tax
35.3.2 Capital risk management
(Percentage) (Rupees in thousand)
The Company’s objective when managing capital is to safeguard the Company’s ability to remain as a going
2019 concern and continue to provide returns to shareholders and benefits to other stakeholders.
US$ +10% 57,424 57,424
In order to achieve the above objectives, the Company may issue new shares through right issue or raise
-10% (57,424) (57,424)
financing from financial institutions.
2018
US$ +10% 22,804 22,804 35.4 Fair value of financial instruments
The carrying values of financial assets and liabilities approximate their fair values.
-10% (22,804) (22,804)

36. INFORMATION ABOUT JOINT OPERATIONS Non current Current Non current Current
assets assets liabilities liabilities
The Company’s working interests in the following operated and non operated fields / blocks in Pakistan are
disclosed in note 25.
Non current Current Non current Current As at June 30, 2018

assets assets liabilities liabilities
Share in joint operations operated by the Company
Zarghun Field 541,568 67,856 113,853 47,670
As at June 30, 2019 Ziarat Block 245,914 119,207 187,828 182,173
Share in joint operations operated by the Company Karak Block 4,026,066 97,261 395,159 170,773
Hanna Block - 3,627 - 5,561
Zarghun Field 1,379,534 841,445 297,509 80,166
Harnai Block - 1,526 - 31,277
Ziarat Block 1,321,405 693,966 425,747 127,745
Sujawal Block 3,154,934 158,998 338,376 29,758
Karak Block 3,588,573 694,372 471,677 64,045
Sukkur Block 237,759 101,073 230,547 130,003
Hanna Block 39,672 5,573 - -
Ghauri Block 1,300,578 566,961 148,685 474,714
Harnai Block - 51,133 - 6,685
Peshawar East Block - 1,351 - 2,609
Sujawal Block 3,458,895 105,576 782,345 31,144
Bannu West Block - 106,071 - 115,578
Sukkur Block 345,365 186,969 313,815 316,436
Khetwaro Block - 16,916 - 2,793
Ghauri Block 3,011,745 767,298 270,245 849,898
Peshawar East Block - 61 - 165 Share in joint operations operated by others
Bannu West Block 147,616 719,450 - 39,323 Hala Block 2,350,549 11,892 404,949 -
Khetwaro Block - 16,884 - 139 Kohat Block - 6,974 38,805 12,547
Share in joint operations operated by others Kohlu Block - 3,293 - 9,273
Kalchas Block - 288 - 598,850
Hala Block 2,550,516 5,722 628,697 211,382
Zindan Block - 8,045 - 201
Kohat Block 229,756 7,768 55,121 257,587
Shah Bandar Block 155,180 - - 178,111
Kohlu Block - 304 - 1,937
Block 28 - - - 5,708
Kalchas Block - - - -
Zindan Block - 3,346 - 200 12,012,548 1,271,339 1,858,202 1,997,599
Shah Bandar Block 832,891 - 6,853 30,697
37. DISCLOSURE REQUIREMENTS FOR SHARIAH COMPLIANT COMPANIES
Bela West Block 1,126,228 - - - AND THE COMPANIES LISTED ON ISLAMIC INDEX
18,032,196 4,099,867 3,252,009 2,017,549
Description Explanation
i) Bank balances as at June 30, 2019 Rupees in thousand

Placed under interest arrangement 5,404,729
Placed under Shariah permissible arrangement 1,229,137
6,633,866
Short term investments as at June 30, 2019 Placed under interest arrangement 10,200,000
Placed under Shariah permissible arrangement 10,500,000
20,700,000
ii) Interest income on bank deposits for the Placed under interest arrangement 545,124
year ended June 30, 2019 Placed under Shariah permissible arrangement 91,251
636,375
Interest income on short term investments

for the year ended June 30, 2019 Placed under interest arrangement 723,646
Placed under Shariah permissible arrangement 449,635
1,173,281
iii) Exchange loss 34,008


Description Explanation 40. TRANSACTIONS WITH RELATED PARTIES AND ASSOCIATED COMPANIES
iv) Relationship with banks having Islamic windows 1. Askari Bank Limited (Islamic & Conventional both) RELATED PARTIES
2. Bank Alfalah Limited (Islamic & Conventional both) The related parties of the Company comprise of entities having significant influence over the Company,
3. Meezan Bank Limited employees’ retirement funds and key management personnel. Key management personnel are those persons
4. Al Baraka Bank (Pakistan) Limited having authority and responsibility for planning, directing and controlling the activities of the Company directly
or indirectly. The Company considers its Chief Executive and Directors to be key management personnel.
Disclosures other than above are not applicable on the Company.
2019 2018
38. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES Nature of relationship Nature of transaction / balance (Rupees in thousand)
The aggregate amount charged in these financial statements as remuneration and allowances including all
Entities with significant influence
benefits to key management personnel (chief executive and directors) and executives of the Company is as
over the Company
follows:
Fauji Foundation Dividend paid 301,754 249,275
2019 2018
Chief Chief
Bonus shares 44,100 -
Executive Executives Executive Executives Corporate Social Responsibility 17,000 8,000
(Rupees in thousand) Dividend payable 9,526 6,990
Managerial remuneration 5,907 665,447 5,137 585,024 OGDCL Dividend paid 150,878 124,638
Company’s contribution to provident fund 591 58,728 514 49,760 Bonus shares 22,050 -
Company’s contribution to gratuity fund 2,527 544,587 967 258,867 Dividend payable 4,763 3,495
Housing and utilities 7,147 672,949 7,421 571,933 Share (various fields/blocks) payable 251,668 26,958
Other allowances and benefits 7,712 1,185,638 7,806 707,626 Share (various fields/blocks) receivable 441,245 23,253
Bonuses 10,385 1,283,628 8,290 848,167 Employees’ retirement funds
34,269 4,410,977 30,135 3,021,377
Gratuity funds (Management
Number of persons including those who and Non-Management) Contribution 399,289 180,733
worked part of the year 1 256 1 216 Provident fund Contribution 76,052 72,504
The above were also provided with medical facilities and post retirement leave benefits. The chief executive Transactions with key management personnel are disclosed in note 38 to the financial statements.
and certain executives were provided with free use of Company maintained cars, residential telephones and
use of club facilities. Executives based at plant site, Daharki, are also provided with schooling and subsidized ASSOCIATED COMPANIES
club facilities. 2019 2018
In addition 13 (2018: 13) directors were paid aggregate fee and reimbursable expenses of perquisite nature
of Rs 19,288 thousand (2018: Rs 13,273 thousand). Askari Bank Limited
Bank balances 4,631,566 5,541,678
2019 2018
Short term investments 3,500,000 637,000
Interest accrued 39,913 9,734
39. NUMBER OF EMPLOYEES
Total number of employees as at the year end 1,228 1,187 Amounts receivable from / payable to related parties and associated companies other than above have been
Average number of employees during the year 1,212 1,150 disclosed in relevant notes to these financial statements.

41. DETAIL OF RELATED PARTIES AND ASSOCIATED COMPANIES 44. SUMMARY OF SIGNIFICANT TRANSACTIONS AND EVENTS
Following is the summary of significant transactions and events that have affected the Company’s financial
41.1 Related Parties position and performance during the year:
Percentage of
Name of Related Party Basis of relationship Shareholding
– Dividend declared by the Company during the year, aggregated to Rs 760.725 million.
– Bonus shares issued by the Company during the year, amounting to Rs 110.250 million.
Fauji Foundation Entity with significant influence over the Company 40%
– Increase in wellhead prices resulting in increase in cash and cash equivalents and profit.
OGDCL Entity with significant influence over the Company 20%
Gratuity funds (Management and
45. CORRESPONDING FIGURES
Non-Management) Post employment benefit plan -
Following changes have been made in corresponding figures to conform to current year’s presentation:
Provident fund Post employment benefit plan -
Chief Executive and Directors Key management personnel - Rupees in thousand
41.2 Associated Companies Statement of Financial position

Percentage of Amount reclassified to “Trade and Other Payables”
Name of Associated Company Basis of relationship Shareholding
from “Current maturity of long term financing” 119,045
Amount reclassified to “Trade and Other Payables”
Fauji Fertilizer Company Limited Fauji Group Company, Common directorship -
from “Interest accrued on long term financing” 10,180
Askari Bank Limited Fauji Group Company, Common directorship -
Foundation Power Company
Statement of profit or loss
Daharki Limited Fauji Group Company, Common directorship -
Amount reclassified to “Other income / (expenses)”
Foundation Gas Fauji Group Company, Common directorship -
from “Exploration and prospecting expenditure” 375,015
42. NON - ADJUSTING EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
46. GENERAL
The Board of Directors in its meeting held on July 30, 2019 have proposed (i) final cash dividend for the year
ended June 30, 2019 @ Rs 2.0 per share, and (ii) issuance of Bonus Shares in ratio of one share for every ten 46.1 Capacity and Production
shares held (i.e. 10%), for approval of the members in the Annual General Meeting.
Product Unit Actual production for the year
43. INFORMATION RELATING TO PROVIDENT FUND

Gas MMSCF 257,137
Mari Petroleum Company Limited (MPCL) Employees’ Provident Fund is a defined contribution plan for benefit
Condensate Barrels 110,613
of employees of the Company. The details are as follows:
Crude Oil Barrels 294,442
Un-audited
LPG Metric ton 19.83
2019 2018
Due to the nature of operations of the Company, installed capacity of above products is not relevant.
Net assets (Rupees in thousand) 1,049,955 956,264
46.2 These financial statements have been authorized for issue by the Board of Directors of the Company on
Cost of investments made (Rupees in thousand) 921,825 818,423
July 30, 2019.
Percentage of investments made (Percentage) 88% 86%
Fair value of investments (Rupees in thousand) 921,825 818,423
Break-up of investments:
Bank, term deposits and mutual funds (Rupees in thousand) 921,825 818,423
All investments out of Provident Fund and Gratuity Funds have been made in accordance with the provisions
of section 218 of the Companies Act, 2017 and the conditions specified for this purpose.
Muhammad Asif Lt Gen Ishfaq Nadeem Ahmad, HI (M), (Retd) Ayla Majid
General Manager Finance/CFO Managing Director / CEO Director
Definition and Glossary of Terms
2D Seismic IEA International Energy Agency NTN National Tax Number

Exploration method of sending energy waves or sound waves into the earth and recording the wave reflections IEE/EIA Initial Environmental Examination / OCM Operating Committee Meeting
to indicate the type, size, shape, and depth of subsurface rock formations. 2-D seismic provides two dimensional Environmental Impact Assessment OGDCL Oil & Gas Development Company Limited
information. IFAC International Federation of Accountants OGRA Oil and Gas Regulatory Authority
3D Seismic IFC International Finance Corporation OHSAS Occupational Health and Safety Assessment
Exploration method of sending energy waves or sound waves into the earth and recording the wave reflections to IFRS International Financial Reporting Standards Series
indicate the type, size, shape, and depth of subsurface rock formations. 3-D seismic provides three dimensional IHRDC International Human Resource Development P/E Price to Earnings Ratio
information. Corporation PCAs Petroleum Concession Agreement
IMS Integrated Management System PMS Plant Maintenance System
Abbreviations
ISMS Information Security Management System PPEPCA Pakistan Petroleum Exploration and Production
ACA Associate Chartered Accountant EBITDA Earnings Before Interest Taxes Depreciation ISO International Standards Organization Companies Association
AFIC Armed Forces Institute of Cardiology and Ammoritzation
IWD International Women’s Day PPIS Pakistan Petroleum Information Service
AGM Annual General Meeting EFP Employers' Federation of Pakistan
JV Joint Venture PSI Pounds Per Square Inch
API American Petroleum Institute EOGM Extraordinary General Meeting
KIBOR Karachi Inter-Bank Offer Rate PSIG Pounds Per Square Inch Gauge
ATL Active - Tax Payer List EPS Earnings Per Share
KPIs Key Performance Indicators PSO Pakistan State Oil
B2B Business to Business ERM Enterprise Risk Management
KPK Khyber Pakhtunkhwa PSX Pakistan Stock Exchange
BBLs Barrels ESD Emergency Shut-Down
KUFPEC Kuwait Foreign Petroleum Exploration Company RCCI Rawalpindi Chamber of Commerce and Industry
BI Business Intelligence EWT Extended Well Test
LLIs Long Lead Items RFQ Request for Quotation
BOE Barrel of Oil Equivalent FATA Federally Administered Tribal Areas
LPG Liquefied Petroleum Gas RTB Request for Travel Booking
BOQs Bill of Quantities FCA Fellow Chartered Accountant
LTIs Lost Time Incidents SAARC The South Asian Association for Regional
BPD Barrels Per Day FDS Functional Design Specification Cooperation
MAP Management Association of Pakistan
BSCF Billion Standard Cubic Feet FEC Full Economic Costing SAFA South Asian Federation of Accountants
MCS Management Control Systems
BTU British Thermal Unit G&G Geological and Geophysical SAP Systems, Applications and Products
MD Managing Director
CA The Companies Act, 2017 GDS Gas Development Surcharge SCADA Supervisory Control and Data Acquisition
MDCPF Mari Deep Central processing Facility
CATS Cross Application Timesheet GIDC Gas Infrastructure Development Cess SECP Securities and Exchange Commission of
MDU Mari Drilling Unit
GM General Manager Pakistan
CCG Listed Companies (Code of Corporate MGCL Mari Gas Company Limited
Governance) Regulations, 2017 GoP Government of Pakistan SML Sui Main Limestone
MMSCF Million Standard Cubic Feet
CDC Central Depository Company of Pakistan Limited GPA Gas Wellhead Price Agreement SOPs Standard Operating Procedures
MNA Member of National Assembly
CEO Chief Executive Officer HAZOP Hazord and Operability Study SOW Statement of Work
MOU Memorandum of Understanding
CFO Chief Financial Officer HCDPU Hydrocarbon Dew Point Unit SRO Statutory Regulatory Order
MPA Member of Provincial Assembly
CMS Competency Management System HI(M) Hilal-e-Imtiaz (Military) SSGCL Sui Southern Gas Company Limited
MPCL Mari Petroleum Company Limited
COO Chief Operating Officer HIA Head of Internal Audit SUL Sui Upper Limestone
MSD Mari Services Division
COT Corporate Objectives & Targets HMI Human Machine Interface TCM Technical Committee Meeting
MSPC Mari Seismic Processing Centre
CS Company Secretary HOD Head of Department TD Target Depth
MSPC Mari Seismic Data Processing Center
CSP Civil Service of Pakistan HR&R Human Resource and Remuneration TORs Terms of Reference
MSPs Management System Procedures
CSR Corporate Social Responsibility HRL Habib Rahi Limestone TRCF Total Recordable Case Frequence
MSU Mari Seismic Unit
D&P Development and Production HSE Health, Safety and Environment VDI Virtual Desktop Infrastructure
MW Megawatt
DCO District Coordination Officer HSEQ Health, Safety, Environment, and Quality
NDU National Defense Univeristy
DGPC Directorate General of Petroleum Concessions IASB International Accounting Standards Board
NEQS National Environmental Quality Standards
DRP Disaster Recovery Plan ICAP Institute of Chartered Accountants of Pakistan
NIMUN NUST International Model United Nations
DST Drill Stem Test ICMAP Institute of Cost and Management
Accountants of Pakistan NITL National Investment Trust Limited
E&P Exploration and Production

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Our Cover Page is a striking visualisation of our

The OPEN SKY represents the possibilities that Mari

The MAP of Pakistan symbolises our ongoing nation-wide

The Company’s 360 degree focus on diversification is

The BLUE SEA-SPACE shows the Company’s desire of

All in all, the Cover Page of our Annual Report 2019

Organogram 29 Geographical Presence 159

Chairman's Review 30 Statement of Compliance with the Listed Companies

Corporate Social Responsibility 78

Quetta Liaison Office Registration,

MPCL Head Office Building, Islamabad

Notice of Annual General Meeting

Notice of Annual General Meeting

Notice of Annual General Meeting

Statement under Section 134(3)

Issue of Bonus Shares

The Directors, directly or indirectly, are not personally interested in this

By order of the Board

Islamabad: Assad Rabbani

Mari Seismic Unit Camp Site – Bannu West

Our History Unlocking Opportunities

Application of Revenue Earned Equities and Liabilities

67.67% O Trade debts

Laying of Pipeline at Mari Gas Field

Senior Management Celebrating Pakistan Day with MPCL Staff

PROFILE: Board of Directors

Proﬁle of Board of Directors

Proﬁle of Board of Directors

Mr Adnan Afridi Mr Muhammad Asif Mr Assad Rabbani

GM Resident Head of Sr. Head Manager Manager Regional

Chairman's Review Dear Stakeholders,

Managing Director's Outlook

We are facing several challenges

Energy Produced Earnings Per Share/ Net Sales/Net Proﬁt

O Dividend (%) O Net Proﬁt

Lt Gen Ishfaq Nadeem Ahmad

Managing Director's Outlook

Another achievement that we are

Managing Director's Outlook

I want to highlight in particular that

We are also in talks with the

Going a step further in CSR, we

Managing Director's Outlook

Calendar of Major Events

(650 sq. kms) of Bannu West

AP RI L 20 19 Crude oil discovery at exploratory

Mr. Omar Ayub Khan, Minister for Energy,

exploratory well Togh-1 in OGDCL

well Benari X-1 in PPL Operated

Risks and Opportunities Report oversight of the Company’s risk

Risks and Opportunities Report

Risks and Opportunities Report

Strategic Business Plan and Effect of seasonality on

Strategic Business Plan and Resource Allocation

Strategic Business Plan and Resource Allocation

Organisational Overview and F

FORWARD-LOOKING STATEMENTS Production & Processing facilities at Sujawal Gas Field

Reportable Segments Operations

Proﬁt / (Loss) before taxation