Evidence of Financial Performance of OGDCL based on Price Volatility, Credit Risk, and Operational Risk

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.