Abstract:
This project focuses on the impact of oil crisis on the profitability and financial
performance of Pakistan’s biggest E&P company, OGDCL. Moreover, the global impact
of the oil crisis has also been outlined in this project. The main objective was to examine
the impact of hedging and cross hedging on OGDCL’s profitability in wake of weakening
oil prices, as well as analyze the credit and operational risks of the company. The data
required for the financial workings of this project was obtained from both primary and
secondary sources. These included firsthand data the company was willing to share, the
annual reports, reports on energy production and other publications. This report magnifies
the different areas OGDCL could improve in. It stresses upon the different tools and
techniques the company could resort to for the purpose of mitigating the burden levied by
price decline. OGDCL has been caught up in circular debt issue and subject to project
delays. This project quantifies the opportunity costs of such problems. The report
highlights how the profits could have been maximized if the company resorted to dollar
accounts, if the projects were completed within the set deadlines, and the receivables were recovered in due time.
