Page 103 - Pakistan Oilfield Limited - Annual Report 2022

101
Annual Report 2022

Opportunity

• POL’s oil prices are linked with the international oil prices and increase in international prices
leads to increase in profits.
• The company is operating sophisticated crude transportation facility to transport crude to
refineries at cost effective rates. The enhancement of crude transportation facility network
provides an opportunity to increase incremental revenues by providing an-alternative to road
transportation

• Oil and Gas are highly demanded by domestic, power and industrial sector due to their ever
increasing demand, as a result it ensures stability in cash flows and future profitability

Threats

• Oil and gas drilling by its very nature is a high risk activity. The hazards and costs involved during
drilling of wells including well blow out, fishing, fire hazards and personal injury. In addition,
the risk of incorrect selection of exploration acreage, poor quality of seismic data, error in
processing or interpretation of seismic data, incorrect selection of drilling site would have an
adverse effect on company earnings.
• The oil and gas industry is regulated by a number of government regulations which are required
to be strictly followed. Default in this regard can have serious consequences. Moreover, delay
in requisite approval from government in allocation of gas/condensate from new discoveries
depriving the company of sizeable revenues

• Delays in the procurement process due to regulators e.g. bans on imports is a possible threat to
the Company’s profitability.
• With increased competition in the oil and gas exploration and production sector, particularly in
relation to the application and award of exploration concessions, the Company may be faced
with increased competition. Furthermore, the Company’s LPG marketing business may also be
adversely affected due to increased competition, decline in margins or disruption to LPG supply
sources.