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The history of Pakistan State Oil starts from mid-70s when the Government of Pakistan amalgamated three OMCs: Esso Eastern, Pakistan National Oil (PNO) and Dawood Petroleum as part of its reorganization plan. It is considered as one of the most successful mergers in the history of Pakistan. The main objective of the Nationalization of POL Giant was backed by the facilitation of the sensitive national issue of providing fuel to Defense forces. Because, during the war of 1971, the nation suffered from the problem that no fuel company was interested to provide fuel to the Armed forces at that and the sensitivity of the nation was in very crucial condition.
The than Federal government decided to nationalize three petroleum companies
along with management control.
The company is the only public sector entity in Pakistan that has been competing effectively with three multinationals companies which are supported technically by their parent organization.
Pakistan State Oil Company Ltd; is the largest oil marketing company of Pakistan. It is engaged in the Storage, Import, Distribution and Marketing of Petroleum Products, Petrochemicals, Aviation & Bunker Fuels, LPG and CNG Dominates the Country's Fuel and Energy Need.
Since its inception in 1976 the company has been meeting more than 70% of the country's fuel needs. PSO's 3805 outlets all across the country markets more than 12 million tons of fuel products annually. This network is supported by PSO's 28 storage facilities with a capacity of more than 800,000 tons. PSO took a major step in improving its distribution facilities by acquiring 12% equity in the 800km long Karachi-Mehmoodkot White Oil Pipeline.
As part of PSOCLs policy of providing better customer service, it has embarked upon its New Vision of retail development program. Equipped with the most modern facilities like electronic dispensing units, auto car wash, convenience stores, internet facilities and business centers. These state of the art designed stations provide greater customer confidence and a friendlier environment. As a manifestation of PSOCL's greater customer focus a PSO 24hr Customer Service has been launched where customer's can lodge their queries and suggestions about various PSO products and services.
Along side its retail network, PSO is playing an equally important role in the industrial sector. From the locomotives of Pakistan Railways to the giant turbines of Power Projects, all are fuelled by PSO. Being fully alive to its responsibilities towards the agriculture sector PSO's 700 strong agency network helps keep the PAKISTAN STATE OIL COMPANY
farm machinery running. Further, its kerosene sales are a major source of energy
for the rural and lacking gas facilities.
Pakistan State Oil Company Limited remains equally strong in Aviation and Bunker Sales. PSO has been constantly upgrading its facilities to serve a wide range of commercial aircrafts. Through a chain of eight Aviation Service Stations scattered all across the country PSO fuels the aircrafts of many local and international airlines. Acquisition of new Lahore Terminal Complex at the Lahore International Airport has enabled PSO to serve the busiest corridor of East/West bound flights benefiting the airlines in shape of time saving and lesser fuel burn off. While it's bunkering facilities at all the major ports of country fill up the ocean liners of many nationalities facilitating the nation's international trade.
In its endeavor to provide quality lubricants, PSO has formed an alliance with world-renowned company Castrol whose products are manufactured at PSO's own ISO 9000 certified facilities ensuring the highest quality standards for both retail and industrial sales.
More cordial relationship with its dealers is one of the important objectives of PSO's New Vision Program. To give them a sense of participation PSO has instituted "TOP DEALER AWARDS" and "MILLION LITER AWARDS" whereby efforts of the high performing dealers are recognized.
Emergence of Health Safety & Environment (HSE) as the corner stone of PSO's corporate governance testifies to its commitment to environmental protection. Complete HSE Certification of all its facilities and installations is one of its major goals for the coming months, which are being vigorously pursued.
Privatization of Pakistan State Oil Company Ltd; is underway whereby JP Morgan's financial advisory consortium is assisting the Government of Pakistan in the privatization process. They have undertaken the initial due diligence including financial and regulatory issues and subsequent to which the interest of the potential investors in the transaction will be solicited.
Pakistan State Oil (PSO) is the oil market leader in Pakistan enjoying over 79%
share of Black Oil market and 58% share of White Oil market. It is engaged in import, storage, distribution and marketing of various POL products, including Mogas, HSD, Fuel Oil, Jet Fuel, Kerosene, LPG, CNG and petro-chemicals. This blue chip company, the winner of "Karachi Stock Exchange Top Companies Award" and a member of World Economic Forum, has been a popular topic of case studies in Pakistan and abroad based on its radical corporate turnaround over the last few years.
Excellence in Customer Service
PSO serves a wide range of customers throughout Pakistan, including retail, industrial, aviation, marine and government/defence sectors. Professionals at PSO strive for providing unmatched and diverse services to the customers in line with PAKISTAN STATE OIL COMPANY
best international practices. PSO's state-of-the-art New Vision retail outlets are equipped with the most modern facilities, including auto car wash, electronic dispensing units, convenience stores, business centres, internet facilities and Easy Payment Centres for payment of utility and Citibank credit card bills. The concept of Quick Oil Lube Vans introduced by PSO, provides the lube change facilities at customers' doorsteps. About 21 Mobile Quality Testing Units ensure top of the line quality of products and services. As innovative customer service initiatives, PSO has launched Loyalty Card, Corporate Card, Fleet Card and Prepaid Card. These cards provide added convenience, flexibility and security to the customers while enabling them to earn redeemable loyalty points and avail attractive discounts for purchase of non-petroleum products at a large number of merchant outlets in various cities on use of Loyalty and Corporate Cards.
For efficient handling of customer complaints, queries and suggestions, PSO has developed Customer Service Centres at all its 14 divisional offices. Furbished with a toll free telephone number (0800-03000) and automated customer feedback registration system, these centers provide an efficient system of 24-hour customer care. An attractive and comprehensive PSO website (www. psocl.com) is available as a source of PSO-related news and information.
Total Quality Control
PSO has been meeting the country's fuel needs by merging sound business sense with national obligation. In order to satisfy the customers' needs while ensuring the highest quality of products and services, PSO has introduced total quality management system in its operational activities. Consistent conformance to prescribed standards and specifications across the whole range of activities from receipt, storage, transportation and delivery of products is the cornerstone of PSO's quality management system. In addition to quality assurance in upkeep and maintenance of existing facilities, compliance with quality standards is ensured in PAKISTAN STATE OIL COMPANY
construction of new facilities like recently developed state-of-the-art facilities for
Aviation customers at Lahore Airport
Health, Safety and Environment
Ensuring the health and safety of PSO employees, contractors, customers and members of public likely to be affected by the Company's operations is one of the basic corporate objectives, and as a priority it ranks equally with market share and profit. Accordingly, it is the Company's policy to perform work in the safest practicable manner, consistent with best industrial practices while adhering completely to the requirements of health and safety codes and practices.
Short History of PSO
Chronology of Events leading to the formation of: Pakistan State Oil Co. Ltd.(PSO)
Federal Government takes over management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited), renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control) Act, 1974.
Government incorporates "Petroleum Storage Development Corporation" PSDC.
Name of PSDC changed to State Oil Company Limited (SOCL).
Government purchases ESSO Undertakings, vests their control in SOCL.
(State Oil Company Limited) and names it as Pakistan State Oil Company Limited
ORGNIZATIONAL STRUCTURE OF COMPANY
We believe that excellence in our core activities emerges from a passion for satisfying our customers' needs in terms of total quality management. Our foremost goal is to retain our corporate leadership.
We endeavor to achieve higher collective and individual goals through team. This is
inculcated in the organization through effective communication.
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country. We value contribution of individuals and teams. Individual contributions are recognized through our reward and recognition program.
We uphold our values and Business Ethics principles in every action and decision. Professional and personal honesty, dedication and commitment are the landmarks of our success. Open and transparent business practices are based on ethical values and respect for employees, communities and the environment.
We are committed to continuous improvement, both in New Product and Processes as
well as those existing already. We encourage Creative Ideas from all stakeholders.
We promote Health, Safety and Environment culture both internally and externally. We emphasize on Community Development and aspire to make society a better place to live in highly ethical, safe environment friendly and socially responsible business practices .
PSO - Departments
With a view to protect the company as a corporate entity and in order to safeguard the company interest and position against all sorts of litigation and other legal matters, the legal department has, as part of its contribution to the organization's corporate governance and in order to take necessary, calculated, effective and successful measures and to overcome the flaws & weaknesses came up with a number of objectives and in order to achieve the same adopted numerous strategies, and as a result of the implementation of such strategies the legal department has managed to achieve number of accomplishments.
Special Projects Department
The Retail Construction department has been responsible for the development of New Vision Retail and Consumer Outlets throughout Pakistan since the inception of the New Vision Programme in 1999. During the past 5 years PSO completed a total number of over 1000 NVRO's and another 200 outlets will be developed during the current fiscal year. Outlets are constructed on fast track basis with some outlets completing within 30 days. One outlet was completed in 15 days - an industry record in Pakistan.
Retail facilities department has always played a vital role in promoting company image through better up keep of retail outlets- especially New Vision Retail Outlets (NVRO's) and made significant contributions in companies strive to gain market share by means of reduced forecourt downtime.
Corporate Planning Level
This is no longer a news that PSO's corporate development has been widely acknowledged as one of the most dramatic examples of corporate turnaround in the world. Today, PSO is a popular topic of case studies in Pakistan and abroad and one of the most sought out sources of corporate advice and guidance in the country. Several major business enterprises have obtained permission to replicate PSO's Corporate Planning model. Based on its corporate excellence, PSO ranks among top global companies by way of its membership of the World Economic Forum. Qualification for the Forum's membership, based on stringent and forward looking criteria, is a unique distinction for PSO as a Pakistani company.
This unprecedented level of corporate accomplishment and such a high international ranking achieved by a Pakistani company is a product of professional teamwork and outstanding corporate leadership. Nevertheless, the story of PSO's global renaissance would be incomplete without due recognition and acknowledgement of the dedicated professional support of a very high caliber provided by the newly established Corporate Planning department (CP) of PSO, based on world-class qualifications and high-level international exposure of CP team.
The legendary rise of PSO to global horizon, duly decorated by global recognition of corporate excellence, involved dedicated hard work of highest professional standard in the following broad areas:
Establishment of a robust framework of the state-of-the-art systems and procedures of
corporate planning, management and performance review
Without a well-established and competitive framework of corporate systems, no company can achieve such a high professional ranking that PSO has achieved. Usually, the companies get such systems developed on a turnkey basis by external consultants, based on payment of heavy fees and expenses. PSO has a unique distinction of developing and putting in place such systems through in-house teamwork. CP played a key role in this regard. The in-house systems development enabled PSO professionals to internalize the systems
Today, PSO's planning and management structure is highly regarded. In addition to formulating PSO's first ever Corporate Plan in line with best business practices, CP assisted all the departments of PSO in developing their plans. Today, every department of PSO, particularly each business unit, has a robust business plan. Together, the Corporate Plan and departmental plans form a cohesive, dynamic and internationally competitive strategic framework for good corporate governance.
PSO's systems and procedures have been extensively reviewed and evaluated by leading international organizations and individuals, who have been involved in study and due diligence of PSO's corporate development. While acknowledging PSO's remarkable corporate transformation in categorical terms, the independent international Financial Advisory consortium, JP Morgan, made special references in their Information Memorandum to the elements of reform established by CP. That Memorandum, circulated around the world, contained the following statement:
"Significant progress has been made towards putting in place the basic framework for corporate reform in line with the modern concepts and practices. This includes streamlining the investment planning process, developing a model for business-wise and product-wise profitability analysis and developing a comprehensive corporate plan."
Subsequent to the assessment by JP Morgan, several additional systems and models have been developed at PSO, including the Corporate Performance Reporting System (CPR) and the Capital Resource Planning, Management and Optimization System (Capex System). CPR operates by way of obtaining and analyzing up-to-date sales and expense information relating to products and business units, translating that information into comparable benchmarks and conducting comparison of the present level of performance with past and planned levels of performance. CPR is a powerful analytical tool and control mechanism, which serves as a watchdog to ensure that implementation of the Corporate Plan is on-course and the performance milestones are achieved in a timely manner. It helps reconceptualise the corporate business and establish primacy of Strategic Business Units with clear allocation of responsibility and accountability. Capex System facilitates understanding, development and implementation of Investment Plan as well as on-line management of capital resources. It helps eliminate the hassle-factor inherent in manual budget operation, including appropriation, re-appropriation, re-allocation, contingency utilization, record reconciliation, reporting, and periodic monitoring & review.
While serving as Secretariat of PSO's Management Committee (Man-Com), CP helped redefine the role and restructure the operations of Man-Com to transform it into an institution playing a pivotal role in PSO's corporate renewal and market success. Presentations to Man-Com utilize numeric and graphic depictions of how the company measures up not only against the industry but also against itself. Meetings of Man-Com provide useful corporate exposure and learning opportunity to young professionals, who are encouraged to participate and present in the meetings.
In recognition of PSO's glaring progress and significance of CP's assistance in this regard, Mr. Amjad Parvez, General Manager, CP, received invitations to lecture at leading business schools of USA and UK. Professor Thomas W. Dunfee invited Mr. Amjad Parvez to lecture at the Wharton Business School, USA, in the following words:
"I am delighted to invite you to participate as a guest lecturer in my class â€¦ the PSO case
you are presenting will enhance the course and promote class discussion."
Compilation of PSO's corporate accomplishments in terms of strategy, structure,
processes and performance
This is a prerequisite to sustainable market leadership and professional recognition of a company. Higher professional and scholarly circles give serious consideration to corporate reform initiatives only if they are carried out in context of classical and neo- classical management and organization theories and within the framework of comparative research on corporate transformation. Such corporate modeling and research is undertaken by world's leading companies, either by establishing internal R&D units equipped with adequate professional resources, or by assigning the work to international consulting firms. It is yet another distinction of PSO to undertake and successfully complete this work in-house, without external advisory support. CP played a vital role in
CP developed a corporate model to work as a capstone on PSO's transformation initiatives. This model tracks success from corporate policies and management behavior through employee attitude to customer satisfaction and financial performance. It provides an effective framework for analyzing various elements of PSO's corporate renewal program in context of classical and modern research. This corporate model triggered and facilitated various landmark studies on PSO as well as consideration and recognition of PSO's accomplishments by international forums. This exercise resulted in exponential rise in PSO's professional reputation and ranking.
In this context, internationally renowned management scholar Professor Roderick Martin
acknowledged PSO's remarkable corporate development, in the following words:
"The direction of structural change has been identified, which increased decentralization, management autonomy and the change from reliance on managerial authority to teamwork and the delegation of responsibility. The purpose of the structural change is to increase the flexibility of the firm and its ability to respond to different market conditions."
In addition to playing a vital role in institutionalizing PSO's corporate reform and securing glittering recognition benchmarks for the Company, CP orchestrated PSO's success story as a case of exemplary corporate transformation through presentations to business professionals in seminars on best corporate practices, and lectures at the advanced courses for senior government officers. CP's relentless quest for corporate excellence marked a new era of professional dynamism and management excellence in PSO. The successive waves of value addition, in terms of innovative and high-tech systems, international studies and global recognitions, rocked the corporate scene.
Aviation & Marine
Our objective is to provide reliable, timely & safe service to all our valued customers.
PSO is in technical & commercial collaboration with Air Total International, Paris, one
of the largest oil companies of the world.
Every year PSO is sending 3 employees to France for Aviation training,
which keeps them abreast with the technological development in the industry
Our Valued Customers
We are proud to serve both national & international air carriers like Aero Asia, Aeroflot, Air France, Air China, Defence Aviation Wings, Emirates Airlines, Gulf Airways, Iran Air, Kuwait Airways, Pakistan International Airlines, Qatar Airways, Saudi Arabian Airlines, Shaheen Air International, Singapore Airlines, Swiss Air, Thai Airways and many other small carriers/charters etc.
In addition to contractual customers, we also accept carnet of Air Total International, Air
BP, WFS, UV Air, AVCARD. Aviation Department is proud that ,
Our quality service has given us a market share of approx. 70% volume in
the aviation industry of Pakistan.
We are in the process of getting ISO-9001/2000 certification for
Islamabad, Lahore, Peshawar, Multan & Faisalabad Airports by 1st quarter of 2004.
Marine Business Line
Marine Business deals in selling of fuels to ships at Karachi & Port Qasim and is also
called the Bunkering Department.
There are 3 major fuels, which are used by the ships for their own use.
BFO (Bunker Fuel Oil) commonly known as Furnace Oil.
MGO (Marine Gas Oil) commonly known as High Speed Diesel.
MDO (Marine Diesel Oil) commonly known as Light Diesel Oil.
Supply of DIESO F-76 (Filtered HSDO) to Pakistan Navy.
A special quality treatment unit - Pre-coat unit was installed in July 1997 to cater entire HSDO (Dieso F-76) requirements of Pakistan Navy for supplying Clear and Bright Colour filtered HSDO, which not only enhance the life of the machinery but also helps in preserving a healthy pollution free environment.
High Speed Diesel
Light Diesel Oil
Product Movement-The Back Bone of PSO
PSO, being a flagship company, carries a strong and wide logistics network to cater 70% of total country's demand of POL products timely and efficiently, from Karachi to the remotest areas of the country, through 29 storage points spread throughout the country. At present, most of the POL product movement is carried through self-owned and outsourced tank lorries and rest through tank wagons and pipelines. Recently the adequate availability of alternate fuels like gas has drastically reduced the demand of Furnace oil by 50% which has resulted in surplus fleet of tank lorries and tank wagons.
FINANCIAL HIGHLIGHTS 2007
Recorded an all-time high profit before tax of Rs. 11.7 billion
â€¢Posted unprecedented profit after tax of Rs. 7.5 billion, up by around 33%
over prior year
â€¢Declared an all-time record cash dividend of 340% (Rs. 34 per share) to its
â€¢Recorded highest Mogas market share in last ten years, i.e. 45.3%.
â€¢With an addition of 209 leased retail outlets, the New Vision network
expanded to 1,459 across the country
â€¢Expanded PSO Cards infrastructure to 1,200 Point-of-Sale Terminals in
over 170 cities
â€¢Assumed lead role at World Business Council for Sustainable Development
as the first company in the Muslim world to have its CEO on WBCSD's
Business Role Focus Area Core Team
â€¢Began the year with full implementation of SAP ERP system.
â€¢Won NFEH Award 2005, Help International Trust Award 2005 and
EFP/ILO Occupational Health & Safety Award 2006.
â€¢Received "Management Excellence Award 2005" from Management
Association of Pakistan.
Rated as "AAA" (Triple A) company by Pakistan Credit Rating Agency
The Shell brand name enjoys a 100-year history in this part of the world, dating back to 1899 when Asiatic Petroleum, the far eastern marketing arm of two companies: Shell Transport Company and Royal Dutch Petroleum Company, began importing kerosene oil from Azerbaijan into the subcontinent. Even today, the legacy of the past is visible in a storage tank carrying the date - 1898.
Shell Pakistan Ltd. recognizes five areas of responsibility. It is the duty of management continuously to assess the priorities and discharge these inseparable responsibilities on the basis of that assessment.
a. To shareholders b. To customers
c. To employee
d. To those with whom we do business
e. To society
In the line of competition in Pakistan, PSO, Shell Pakistan and Caltex are major
competitor to ane an others. PSO and Shell are arch competitors with respect to same
product in market.
Green Diesel Oil
SWOT (Strength, Weakness. Opportunities, Threats)
A situation (SWOT) analysis is critical to the creation of any strategic plan. The SWOT analysis begins with a scan of the external environment. Organization must examine their situation in order to seek opportunities and monitor threats. Sources on information include customers (internal or external), supplier, government (local, state, international) professional or trade association (convention and exhibition), journal and reports (scientific, professional and trade).
SWOT is the assumption and facts on which a plan will be based. Analyzed strengths and weaknesses comprise the internal assessment of the organization. Assess the strengths of the organization. What makes the organization distinctive? How efficient is our manufacturing? How skilled is our workforce? What is our market share? What financing is available? Do we have a superior reputation? Assess the weakness of the organization. What are te vulnerable areas of the organization that could be explored/ Are our facilities outdated? Is research and development adequate? Are our technologies obsolete? What does the competition do well?
Analyzing opportunities and threats comprises the external assessment of the environment. Identify opportunities. In which area is the competition not meeting customer needs? What are the possible new markets? What is the strength of the economy? What is the strength of the economy? Are our rivals weak? Identify threats. In which area does the competition meet customer needs more effectively? Are there new competitors? Is there a shortage of resources? Are market tastes changing? What are the new regulations? What substitute products exist? The best strategy is one that fits the organization's strengths to opportunities in the environment.
The SWOT analysis is used as a baseline for the future improvement, as well as gap analysis. Comprising the organization to external benchmarks (the best practices) is used to assess current capabilities. Benchmarking systematically compares measures such as efficiency or outcome of an organization against similar measure from other internal or external organization. This analysis helps uncover best practices that can bee adopted for improvement. (See camp, R. C> Benchmarking: The search for industry best practices that lead to superior performance. Norcross, GA: Industrial engineering and management press 1993) Benchmaking with other organization can help identify a gap. Gap analysis identifies the progress required to move the organization can help identify a current capabilities to its desired future state. In this way, the organization can adapt the best practices to improve organizational performance.
Our vast storage capacity means ensured supplie
Our strong logistic support meeting huge demands in short time
Our widespread depots and divisions to serve the customer better
Fleet and corporate cards adds value to our customer
Consumer (Head Office) - The First Marketing Department To Be
ISO 9001-2000 Certified
Industrial Consumer is proud to announce that we have achieved ISO 9001-2000 Certification for the Head Office. We are the first marketing department at PSO to be ISO Certified.
This is a great achievement for Industrial Consumer Department. It will help improve our processes as well as further enhance our image with our customers. The Quality Management System will help us streamline our processes to improve efficiency and be PRO-active rather than RE-active. This will directly benefit our customers in terms of improved service quality.
Mills Business Gained
Pakistan Steel Mills is one of the most sought customers by OMCs in Pakistan. Having business of Pakistan Steel Mills not only adds prestige to that particular OMC but also significantly improves that OMC's market share and overall standing. Pakistan Steel Mills is the largest POL consuming manufacturing facility in Pakistan. After long and intense series of negotiations, we have gained considerable business of Pakistan Steel Mills.
PSO Fleet and
With a view to provide a Total Solution to our IC customers, we have launched the PF&CC in March 2003. This is a technical and innovative product geared towards better management of IC customers' fleet. Through the PF&CC, the IC customers can utilize the services of the wide range of stations in the major cities. It offers convenience and time- saving to our customer. The PF&CC allows setting of credit limits through increased monitoring for the clients.
IC is Proud that
More than 2,000 industrial units & business houses are being catered through PSO's
Industrial Consumer department
We are serving all the existing industries in Pakistan through quality products and
technical back up We are utilizing Fleet and Corporate cards for giving more benefits to our customers
IC Department is being ISO Certified to improve the quality of service
We have a team of well-qualified professionals who are dedicated to achieve the tasks
assigned to them most efficiently.
Our people are our strength. We have a customer-focused approach to decision making.
We believe in teamwork to accomplish tasks and encourage empowering our team to take
timely decisions. Together we work as a team to achieve our objectives.
Power Projects Department
PSO's Role in the Power Sector
The primary source for generation of Thermal Power Stations is through Furnace Oil. The demand of FO depends on the electricity generation from the FO powered plants after having exhausted available generation from Hydel, Gas, Nuclear and Coal resources. The reason being, FO generation is the most expensive as compared to other sources.
In 1994, PSO was the only OMC which made huge investment of around 2.2 billion and aggressively entered the power sector and captured a market share of approximately 88% by supplying product to all power plants from its state of art oil installations at Zulfiqarabad and from up country Depots and Installations.
High Sulphur Furnace Oil-(HSFO)
Low Sulphur Furnace Oil-(LSFO)
High Speed Diesel (HSD)\
a) Nature Of Business
Non Contractual Business (WAPDA)/(KESC)
Contractual Business (IPPs)
PAKISTAN STATE OIL COMPANY
RPPL (Rousch Power Co. Ltd.)-Abdul Hakim
AES (AES Lalpir Ltd. & AES Pakgen (Pvt.) Co. Ltd)-Lalpir
SABA (Saba Power Co. Ltd.)-Farooqabad
KEL (Kohinoor Energy Ltd.)-Raiwand
JPGL (Japan Power Generation Ltd.)- Raiwand
SEPCOL (Southern Electric Power Co. Ltd.)- Raiwand
TEL (Tapal Energy Ltd.)-Karachi
GAEL (Gul Ahmed Energy Ltd.)-Karachi
HUBCO (Hub Power Co. Ltd.)-Hub River Road Baluchistan
KAPCO (Kot Addu Power Co. Ltd.)-Kot Addu
WAPDA (Water and Power Development Authority)- At various locations
KESC (Karachi Electric Supply Corporation)-Karachi
Founded in 1976, PSO has inherited a wealth of experience in oil marketing from its
predecessor companies - PNO, POCL and SOCL.
With 32 depots and terminals, nearly 4,000 outlets and more than 8,500 enlisted tank lorries, PSO enjoys 67% of total market share of petroleum products in the country. A well-established infrastructure, at par with international standards, provides PSO an edge over
During the last 3 years, PSO has undergone a radical change and has emerged with a new corporate outlook as a market leader with a long-term vision. It is a blue chip company with market capitalization of around Rs. 48-50 billion (USD 825-860 million).
1. Corporate Governance Model
In order to establish good corporate governance framework, the Ministry of Petroleum & Natural Resources has reconstituted the Board of Management (BoM) of PSO by giving it the autonomy to run the company on a professional and commercial basis. The Board comprises ten members - two each representing the government and the public sector financial institutions, and six from the private sector.
The Board is responsible for management and control of the company business. It meets periodically to comply with the statutory requirements of the national legislations and the Memorandum and Articles of Association of the Company, and to meet the requirements of the shareholders. The Board is assisted by three Board Committees in its decision- making process - the Board Audit Committee, the Board Finance Committee and the Board Human Resource Committee.
The Board Audit Committee reviews, amongst other areas, management policies and practices to ensure adequacy and effectiveness of the company's system of internal controls. It also reviews business ethics violations, conflict-of-interest issues and irregularities as well as management's compliance with relevant policies set by the BoM.
The Board Finance Committee reviews and evaluates the financial performance of the company as well as major projects and plans, based on economical viability or operational necessity, as directed by the Board of Management.
The Board Human Resource Committee is responsible for developing a sound organizational plan for the company, and effective employee development programs, compensation and benefits plans and policies that would help attract and retain high quality professionals
PSO's current BoM is fully autonomous with the statutory powers under the Companies
In addition to these Board Committees, the following committees assist the Management
Management (Man-Com) and Executive (Ex-Com) Committees
Compensation, Organizational & Employee Development (COED)
HSE Steering Committee
SAP and Purchase Committees
2. Financial Performance
Effective implementation of corporate reform and business development strategies, in line with best international practices, enabled PSO to maintain its market leadership position in a highly competitive business environment. Accordingly, PSO increased its market share in key products, including Mogas, HSD and Jet A-1.
PSO's sales revenue during FY03 surged to Rs.206.37 billion; up by 13.2 % over prior year. The company earned highest-ever profit before tax of Rs.6.21 billion, up by 20.9%, while the profit after tax reached an all-time high figure of Rs.4.03 billion, up by 26.4%.
Based on this remarkable financial performance, the company announced a final cash dividend of Rs 7/- per share (70%) to its shareholders, resulting in total dividend of 160% for the whole year, as against 130% cash dividend plus 20% bonus shares declared during the preceding year.
The company spent Rs 1,643 million during FY03 to expand its retail network and
enhance infrastructure along with sizeable expenditure on information technology.
During the period under review, PSO contributed approximately Rs.54 billion to the national exchequer in terms of taxes, duties, dividends and levies thus supporting the government in its revenue generation targets.
Other performance indicators like Return on Assets, Return on Capital Employed and Return on Equity reveal that PSO has outperformed its competitors in terms of operating performance.
Our Plans in 2006:07
Use and promotion of renewable energy resources
We plan to improve our performance matrix to make the results
Solid waste management of PSO House
Waste treatment plant for Zulfiqarabad Oil Terminal
Oil separators at our New Vision Retail Outlets
Purchasing based on environmental concerns
Training program in tackling oil spills
Induction of Tier-1 oil spill equipment at Installations
The company has ensured environment conducive to, and free from, gender discrimination and harassment. Recently the management enforced Gender Justice Code of Conduct for safe working condition for one of the important stakeholders of the company. This has contributed to further enhancing the confidence of female employees.
The commitment to gender justice is practically reflected in PSO's recruitment and
(Pakistan State Oil Company Limited)
(Karachi Stock Exchange - Pakistan)
Books and Journal
Annual Report of Pakistan State Oil Company Limited
VISSION - A PSO Magazine
Management - A Global Perspective