Page 53 - Pakistan Oilfields Limited - Annual Report 2021
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and physical security threats. to back up policy for continuous Terrorist attacks:
This industry must also be functioning. A terrorist attack could have a
cautious about where they are material and adverse effect on
drilling and be well informed and Economic and political risks: our business. The company has
aware of the applicable laws. Uncertain economic and taken a terrorist insurance cover
financial market conditions of all its material installations to
Increased competition: resulting from economic or mitigate this risk.
With increased competition in political instability.
the oil and gas exploration and Third party liability:
production sector, particularly Joint Venture Partners: A third party liability could have
in relation to the application Joint-venture operations are a material and adverse effect
and award of exploration becoming increasingly common on our business. In order to
concessions, the Company across E&P companies as mitigate the risk, the company
may be faced with increased these improve their business is continuously evaluating the
competition. The Company’s by leveraging the expertise and areas where insurance cover is
LPG marketing business may resources of other participants. required and it has also taken
also be adversely affected In particular, when some a third party liability insurance
due to increased competition, fields/blocks are new and too which covers its drilling
decline in margins or disruption challenging to be handled areas, pipelines and material
to LPG supply sources. The exclusively and the operational installations.
Company is in a continuous costs are high, then companies
process to explore new opt to have another partner in Human Resource Risks:
opportunities by joining hands order to have their expertise Lack of succession planning
with other E & P companies by and to share the excessive cost. may lead to hierarchical
way of farm-in and farm-out We are also operating in a joint breakdown. The company
agreements. In LPG marketing venture environment and many has prepared department
business, the Company has of our projects are operated by wise organograms and jobs
established a good storage other partners. Our ability to descriptions. Requisitions for
capacity for continuous supply influence partners is sometimes new positions and replacements
to keep margins intact and it limited, due to our small share are promptly processed and
continues to explore sustainable in non-operated ventures. Non- advertised accordingly.
cost-effective sources of alignment on various strategic
further supplies. decisions in joint ventures Lost in hole/damage beyond
may result in operational and repair:
Information technology failures: production inefficiencies or During drilling costly equipment
The Company’s operations delay. We mitigate this risk are run in the hole for several
may be adversely affected by continuous and regular jobs at different depths. In
due to information technology engagement with joint venture order to mitigate the risk, the
failures especially in today’s partners in operated and Company maintains strong
environment of reliance on non-operated projects and control and has also taken
IT systems, regulation and by providing them necessary insurance coverage.
reporting deadlines. The resources/information/
company has a separate IT wing approvals they may require for
to control and monitor all related steady flow of work.
functions especially in relation
ANNUAL REPORT 2021 51
