Financial Analysis of Oil Marketing Companies

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ANALYSIS OF OIL AND GAS MARKETING SECTOR- AN OVERVEW OF ITS GROWTH OVER THE LAST FIVE YEARS (2001 – 2005)

AUTHOR: Akhlaq Ahmad
Enroll No. 111031-004
Cell no: 03215008455
BBA-6 (Morning)

SUPERVISOR: Mr. Musbashir Sadiq

Bahria Institute of Management & Computer Sciences, Bahria University Shangrila Road, Sector E-8, Islamabad
ABSTRACT
Pakistan’s economy is undergoing significant structural changes since 1999-2000. The real GDP growth is accelerating over the last five years. Over the next five years, 7-8 percent growth is targeted to be sustained, which will demand a huge rise in the energy use. The energy sector in Pakistan comprises of oil, natural gas, power (hydro and nuclear) and coal. The oil and gas sector has a lot of potential in Pakistan. Pakistan is classified as low priority by foreign investors because of the unstable economic and political situation. However, efforts are being made by the Government to promote investment in the oil and gas sector, by various incentives such as liberal granting of exploration licenses, restructuring and reform of the oil and gas sectors, deregulation of prices, and privatization of selected assets. The reform has enhanced transparency, making decision makers aware of the various The objective of this thesis is to analyze whether the Oil and Gas sector in Pakistan has really progressed and whether there are better opportunities for investment and growth in this sector now than there were in the past. For the purpose of determining the trend of growth in the Oil and Gas Sector, four Oil and Gas Marketing Companies (O&GMC) were selected and their financial data analyzed over a period of five years (2001 – 2005). Financial data relevant to the sample companies was gathered from published accounts of the companies, in their annual reports. This data was condensed and summed up for the four companies and presented in tables and then used for analysis. The results were held to be representative of the entire Oil Marketing Sector and seem to show a marked trend of growth in the financial indicators reveal that there has been a marked improvement in the growth of this industry. ACKNOWLEDGMENT

First of all I am very much thankful to ALLAH ALMIGHTY, who gave me strength & power to complete this task efficiently & effectively.

I am also very much thankful to my parents who gave me the basic knowledge of how to read & write, who also prayed for me every time, especially in the hour of need & trouble.

Thanks to my most prestigious Supervisor Mr. Mubashir Sadik for providing me guidelines for each & every aspect.

Thanks to Mr. Abdul Ahad Maud and Mr. Faisal Subhan who were very cooperative and considerate during the whole period of data collection.

I am also very grateful to all those who helped me & gave me up-to-date information or any other information regarding this analysis while completing this task.

Thank you in anticipation.

DADICATION

TO MY LOVING PARENTS
TABLE OF CONTENTS

ABSTRACTi
ACKNOWLEDGMENTiii
DADICATIONiv
TABLE OF CONTENTSv
LIST OF TABLESvi
LIST OF FIGURESix
CHAPTER 11
INTRODUCTION1
Broad Problem Area/Background1
Rationale5
Problem Statement6
Objectives of the study7
Research Questions8
Limitations9
CHAPTER 210
LITERATURE REVIEW10
CHAPTER 315
METHOD15
Procedure17
CHAPTER 421
RESULTS AND DISCUSSION21
CHAPTER 566
CONCLUSION AND RECOMMENDATION66
Conclusion66
Recommendations 68
GLOSSARY 69
REFERENCES73

LIST OF TABLES

Table 4.1: Pakistan State Oil Company Limited Balance Sheets (2001-2005)21 Table 4.2: Pakistan State Oil Company Limited Income Statements (2001-2005)22 Table 4.3: Pakistan State Oil Company Limited Vertical Common Size of Balance Sheets (2001-2005)23 Table 4.4: Pakistan State Oil Company Limited Vertical Common Size of Income statement (2001-2005)24 Table 4.5: Pakistan State Oil Company Limited Horizontal Common Size of Balance Sheets (2001-2005)25 Table...
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