United World sits down with Syed Wamiq Bokhari, CEO of Pakistan Petroleum Limited, MD, talking about the future of Petroleum in muslim countries, G20, and much more.
How would you evaluate Pakistan’s growing pains over the last two years? And how do you see the next three years developing?
There has been a smooth transition from one democratic government to another which has improved Pakistan’s image both locally as well as globally. There is hope and expectation that the economy will grow and prosper.
In particular, there is sizable potential in the Exploration and Production sector with a large acreage of virgin terrain still to be explored. Pakistan’s total sedimentary area is around 830,000 square kilometers, of which exploration licenses have been granted for some 360,000 square kilometers. Moreover, work is yet to start in several of these licensed areas.
How would you evaluate the impact that falling oil prices have had on Pakistan, and to what extent would you consider the country prepared to protect itself against a global shock of this magnitude?
Decreasing oil prices are, in fact, beneficial for oil importing countries such as Pakistan in terms of foreign exchange saving due to lower oil import bills. Also, when oil prices are down, the service sector becomes cheaper which is beneficial to E&P companies in the long-run.
The E&P sector has an operational cycle of between 5 to 7 years and investing now with the service sector being cheaper will benefit us. So after 5 to 7 years when the oil prices are expected to have rebounded, the benefit of the investment will be realized.
Moreover, PPL, being a public sector organization, has the elasticity to absorb lower oil prices. Nonetheless, the company’s profits and returns will go down but we will be able to sustain the dip as the company has been able to post healthy profits over the last several years.
What new opportunities does Iran’s nuclear deal open for Pakistan? To what extent will it help balance the country’s energy deficit?
Iran has substantial energy reserves with huge supply potential whereas we have high demand. So there is bound to be some synergy. Due to Iran’s rich basin, Pakistan can venture in by participating in E&P activities to secure oil and gas reserves and supplies for the country’s needs and for its energy security in the future beyond sanctions.
Further, the E&P service sectors of both neighboring countries can be combined for benefits accruing from economies of scale making it more cost effective.
How important is it for Pakistan to explore opportunities to develop petroleum reserves in foreign lands for the country’s energy security? Do you foresee PPL playing a role in this journey?
In addition to PPL’s portfolio in the country, we are also striving for regional expansion both for knowledge sharing and economies of scale.
Would you please highlight to our readers the genesis and development of PPL, its milestone achievements to date, and to what extent it has contributed to the development of the gas sector in the country?
PPL has a rich legacy spanning over six decades with its origins in Burmah Oil Company (BOC), a frontrunner in the global oil and gas sector.
Soon after its establishment, PPL achieved a major milestone with the discovery of Sui in 1952, becoming the first supplier of natural gas in Pakistan. The company still contributes over 20 percent to the country’s total natural gas supplies with Sui remaining the largest gas field in the country.
Nearly five decades later, PPL’s major shares were acquired by the Government of Pakistan. The transition, over the years, provided PPL a unique niche to maintain its position as a leader in meeting national energy demand while maintaining a private company mindset.
As a public limited company with a national responsibility, we have ventured into true frontier areas. We also strive to deploy latest technology to enhance results.
And as the E&P business becomes technology intensive, especially to optimize production and venture into challenging terrains, we have pioneered the use of latest seismic and drilling technology in Pakistan.
In your own words, how important is CSR to PPL? What type of CSR activities are you currently implementing?
Corporate Social Responsibility (CSR) is a core corporate value at PPL. It is our responsibility to give back to our nation, especially to communities where we operate. We have a diverse, need-based and cohesive CSR portfolio focused on education, healthcare, livelihood generation, infrastructural development and disaster relief and rehabilitation.
We have dedicated a minimum input of 1.5 percent of our annual pre-tax profit for CSR initiatives but we actually spend nearly 3 percent. As such, PPL has been recognized as the largest corporate giver in terms of volume of donation for nine consecutive years by Pakistan Centre for Philanthropy.
Currently, we support a number of annual scholarship schemes for promising students belonging to our operational areas to facilitate them in accessing education from renowned higher secondary and tertiary-level institutions, besides constructing and furnishing relevant educational facilities.
Our healthcare program supports local facilities in operational areas to help them in providing quality services to resident communities. Similarly, PPL also supports quality healthcare institutions across the country to facilitate disadvantaged communities. Besides, we regularly organize ophthalmic camps and provide mobile medical services to communities living around our producing fields.
We also work with recognized technical training institutes to provide skill building opportunities to local men and women to enhance livelihood generation potential.
Overall, we believe that our CSR program should enable target communities to improve quality of life and take charge of their progress in the long run.
Which training and development initiatives has PPL put into place in order to build its current organizational capability?
PPL has a dynamic and multipronged training and development program aimed at building staff capacity in core areas and soft skills besides nurturing local youth and aspiring professionals for the E&P industry.
The company’s on-job training program is considered one of the best in local industry, involving training and hands-on-experience.
For staff, we have a comprehensive capacity enhancement program based on in-house training and e-learning modules targeting individual training needs. Besides, we collaborate with renowned international universities to train our core human resource in technical disciplines through our merit-based foreign scholarship program.
We believe in mobilizing academic institutions to meet emerging requirements for qualified professionals through strengthening academia-industry partnership. In one such pioneering initiative in the country, PPL, NED University of Engineering and Technology, Karachi (NED) and Norwegian University of Science and Technology inked an MOU, leading to the initiation of a first-ever Extended Internship Programme for enhancing employability potential of local youth through capacity building in industry-driven skills.
Participants from underserved communities residing around PPL- and partner-operated areas are exposed to both rigorous academic training at NED and hands-on experience at PPL.
Similarly, PPL has established chairs in petroleum engineering and geosciences at NED and Bahria University to promote research and development in these disciplines and equip aspiring professionals in the use of latest technology to build a skilled human resource pool for PPL in particular and the oil and gas industry in general.
How attractive is Pakistan’s oil and gas sector for international investors? Would you welcome joint ventures with US companies to expand your exploration and production activities in particular?
Pakistan’s E&P sector is quite stable for investors. The petroleum exploration and production policies have been very favourable and are well defined. Financial and commercial terms are clearly outlined. Several foreign companies have been active in Pakistan’s E&P.
Pakistan is a largely unexplored country and our explored acreage is quite small with only around 2200 wells drilled so far which is miniscule as compared with exploration activities in US. Also the country has one of the lowest exploration well densities in the world.
PPL has 47 exploration blocks of which we operate 27. The company welcomes joint ventures in all its blocks.
What can be Pakistan’s contribution to the G20 world leaders as they discuss how to meet the needs of this generation without compromising future ones?
Pakistan is a signatory to the Kyoto Protocol. Though not legally bound by the convention, the country is still making efforts to curb greenhouse emissions through Clean Development Mechanism to reduce effects of climate change.
The country’s energy mix primarily consists of natural gas which is an environmentally safe resource. Besides, the E&P sector in Pakistan is cognizant of its environmental responsibility and strives to meet international certification standards.
Talking about PPL, environmental considerations are integrated into all our operations and processes. Upcoming projects are evaluated for suitability to environment-friendly procurement, installation and operations. Environmental Impact Assessment is carried out according to standard procedures, considering input from stakeholders.
Moreover, our fields and facilities are certified for ISO 14001 Environment Management System. A required number of staff also works as lead trainer and evaluator to assist us in maintaining the EMS standards.
In spite of undeniable regional challenges, how can Muslim economies foster mutual business cooperation to further uncap this enormous potential, resulting in long-term peace and sustainability?
There is ample opportunity within the Muslim world for business cooperation with individual countries, each bringing something to the table. Pakistan, for one, has a substantial E&P manpower resource whereas the Middle Eastern countries have considerable reserves and financial strength.
Further, Pakistan has also got agricultural bounty as compared with other Middle Eastern countries and so there can be mutual give and take.
How will previous experiences help you in your new role as CEO of PPL and what kind of contribution to Pakistan’s future do you hope making?
Having worked with three international majors – Kuwait Foreign Petroleum Exploration Company, a subsidiary of Kuwait Petroleum Corporation, Eni S.p.A. and Atlantic Richfield Company, USA – with assignments in several countries spanning five continents, I hope to bring an international perspective to my current assignment, having been exposed to a wide range of best practices and techniques which will be beneficial to PPL’s operations.