INTERNSHIP REPORT
SUBMITTED BY:
AMNA ABRAR
EDUCATION:
BACHELORS IN ACCOUNTING AND FIINANCE
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TABLE OF CONTENTS
ABSTARCT ..................................................................................................................................................... 3
INTRODUCTION ............................................................................................................................................ 4
COMPANY OUTLINE ..................................................................................................................................... 5
CORE VALUES................................................................................................................................................ 5
VISION AND MISSION ................................................................................................................................... 6
BOARD OF DIRECTORS ................................................................................................................................. 6
MY INTERNSHIP EXPOSURE ......................................................................................................................... 7
“WEEK 1” ............................................................................................................................................... 7
“WEEK 2” ............................................................................................................................................... 9
“WEEK 3” ............................................................................................................................................. 12
“WEEK 4” ............................................................................................................................................. 14
Conclusion ........................................................................................................................................... 15
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ABSTARCT
POL gave me an opportunity to work and learn in their Finance Department. There were different
sections of finance department where I worked. I will describe my experiences during my
internship period in the form of a report. This report contains an overview of the company and
the activities and tasks that I have worked on during my internship. I will also describe the
personal goals I have set during my internship period. All the efforts on the way are summarized
in this internship report.
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INTRODUCTION
My Internship Objective:
The reason that I applied for an internship at POL is because it is one of the leading oil and gas
Exploration Company in Pakistan and I wanted to get benefit from this experience. I wanted to
learn, improve and develop a new set of skills by working in the finance department of POL. I
worked in 4 sections of Finance Department, one week for each sections.
Following are the 4 sections that I worked in:
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Financial Reporting
Sales and Receivables
Commercial Contracts
Taxation and Insurance
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COMPANY OUTLINE
Pakistan Oilfields Limited (POL) is a leading oil and gas exploration and production Company listed
on Pakistan Stock Exchange (PSX). The Company’s prime focus is to deliver performance through
excellence in the field of exploration, drilling and production of crude oil and gas. POL, a
subsidiary of The Attock Oil Company Limited (AOC), was incorporated on November 25, 1950.
AOC was founded in 1913 and made its first oil discovery in 1915 at Khaur, District Attock. AOC
has, therefore, pioneered exploration and production of oil and gas in this region nearly a century
ago. In 1978, POL took over the exploration and production business of AOC. Since then, POL has
been investing independently and in joint venture with various exploration and production
companies for the search of oil and gas in the country.
In addition to exploration and production of oil and gas, POL plants also manufacture LPG, solvent
oil and sulphur. POL markets LPG under its own brand named POLGAS as well as through its
subsidiary Cap gas (Private) Limited. POL also operates a network of pipelines for transportation
of its own as well as other companies’ crude oil to Attock Refinery Limited. In 2005, the Company
acquired a 25% share in National Refinery Limited, which is the only refining complex in the
country producing fuel products as well as lube base oils.
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Stock Exchange Symbol:
POL
Company Status:
Listed in Pakistan Stock Exchange
CUIN Registration Number:
0000408
National Tax Number:
0657658-3
Sales Tax Registration Number:
07-03-2802-001-46
Auditors & Tax Advisors:
A.F. Ferguson & CO. Chartered Accountants
Leadership
CORE VALUES
POL values leadership qualities with the necessary managerial and professional competence
coupled with integrity, energy and the drive to challenge the status quo.
Continuous Quality Improvement
We strongly believe that quality and an unyielding commitment to continuous improvement are
indispensable ingredients to achieving success. At POL, we encourage and promote an
environment conducive to the development of breakthrough ideas leading to innovative
solutions.
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Ethics and Integrity
Honesty, ethical behavior and integrity combined with the highest professional and personal
standards form the cornerstone of all our activities.
Profitability
We believe in maximizing the return to our shareholders and enhancing the long term
profitability of the company through the application of the best available technology.
Employees’ Growth and Development
We believe in the creation of an environment focused on encouraging and empowering
employees to contribute to the company’s success through personal growth.
Community Involvement
We strongly believe actively involving the communities in which we operate for the advancement
of their cultural and social life.
VISION AND MISSION
VISION
To be the leading oil and gas exploration and production company of Pakistan with the highest
proven hydrocarbon reserves and production, and which provides optimum value to
stakeholders.
MISSION
We aim to discover and develop new hydrocarbon reserves and enhance production from
existing reserves through the application of the best available technologies and expertise.In
achieving our aim, we will maximize the return to our shareholders, fully protect the
environment, enhance the well-being of our employees and contribute to the national economy.
BOARD OF DIRECTORS
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Mr. Laith G. Pharaon
Mr. Wael G. Pharaon
Mr. Shoaib A. Malik
Mr. Sajid Nawaz
Mr. Abdul Sattar
Mr. Tariq Iqbal Khan
Mr. Shamim Ahmad Khan
Mr. Babar Bashir Nawaz
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MY INTERNSHIP EXPOSURE
“WEEK 1”
DATE: (1-AUG-2023 to 7-AUG-2023)
SECTION: Financial Reporting
SUPERVISOR: Sir Shahid Iqbal
Financial reporting allows finance teams and the business to track and analyze cash inflows and
outflows to help identify current and future cash flow risks. Monthly statements are made in
report form, quarterly reports are made in booklet form and in the end the annual report is
formed. In consolidated financial statements, you form financial statements by comparing the
subsidiary and your investment or purchased shares. AOC form these statements.
FINANCIAL STATEMENTS:
Profit & Loss Statement
It comprises of sales, net sales and gross profit. It states profit before taxation and then the
profit for a year after applying tax. Then we will see whether there was any comprehensive
loss during the year and if there are any items that may or may not be classified to profit or
loss, to get total comprehensive income for the year.
Balance Sheet
It comprises of share capital and reserves, non-current and current liabilities, non-current and
current assets. Long term investment in subsidiary and long term loans and advances.
Statement of Changes in Equity
This statement comprises of total income for the year, which is developed through share
capital and revenue reserves. Adjustments are made in previous
Year income, for the profit and loss, if required. Then, rates are applied for the calculation of
final and interim dividend.
Cash Flow Statement
In this statement, the flow of cash is seen from three types of activities i.e. operating
activities, investing activities and financing activities. The effect of the exchange rate will be
seen.
MODULES:
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Financial reporting is done from general ledger module. All modules are integrated with the
general ledger. All the entries will be transferred to general ledger at the end of the month,
after which the balance will update in the ledger. Entry will not work unless you have selected
11 segments in Charter Account of POL. After closing we move towards trial balance in the
system, after which financial statements are formed. Account Receivables records sales of
crude oil and natural gas. Account Payable validate. Treasury issues cheque. Inventory
recruitment, payment, cost management (finance in fields). User Department tells which
type of items will be purchased. Fixed Assets maintain all fixed assets. Payroll involves
payment, not in oracle.
PERFORMANCE INDICATORS:
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Profit and loss summary
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Balance sheet summary
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Cash flows
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Other info
KEY FINANCIAL RATIOS:
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Profitability Ratio
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Liquidity Ratio
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Activity or Turnover Ratio
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Investment or Market Ratio
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Capital Structure Ratio
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Other
VERTICAL ANANLYSIS:
In this type of analysis, for liability accounts, total liability will be taken as a base while for
asset accounts, total assets will be taken as a base.
HORIZONTAL ANALYSIS:
In this type of analysis, the first year for comparison will be taken as a base and the values of
the next years will be divided from the base year value.
ANNUAL FINANCIAL REVIEW:
Analysis of statement of profit and loss, sales, cost of sales, exploration cost, other income,
taxation, profit for the year, analysis of cash flow statement, operating, investing and
financing activities, analysis of statement of financial position, non-current liabilities and noncurrent assets.
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NOTES TO & FORMING PART OF FINANCIAL STATEMENTS:
These are separate statements of the company that are prepared in accordance with the
accounting and reporting standards as applicable in Pakistan. These standards include:
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International Financial Reporting Standards (IFRS), issued by International Accounting
Standard Board (IASB) under the companies act, 2017, and directives are also issued
under this act.
In this section, I also generated incomes statement and balance sheet from the trial balance
on excel, this helped in improving my skills in excel.
“WEEK 2”
DATE: (8-AUG-2023 to 14-AUG-2023)
SECTION: Sales & Receivables
SUPERVISOR: Sir Muhammad Atif
This section deals with the sale and purchase of crude oil and natural gas. Three types of fields
are involved:
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Own Fields: Khaur, Meyal,Balkassar,Dhulian
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JV (Operator): Pindori, Pariwali, Jhandial, Minwal etc
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JV (Non-operated): Tal, Adhi,Ratana, Dhurnal
PRODUCTS:
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Crude
After treatment, crude is sent to refinery through pipelines and then measured through
meter.
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Gas
Gas is treated and then after own usage, it is sold to SNGPL
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Water
Water is disposed off.
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CRUDE OIL REPORTS:
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Daily Report
In this report, the fields are stated, well no. Is stated and then the production of crude oil, gas
and water is stated. Report is also received at the end of the month. Measurement is done at
60 degrees F.
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Report on pumping of Crude oil& Crude oil received at ARL
In this type of report, it is stated that what crude type is pumped and from where it is
pumped. First the volume is stated in ambivalent form and then at 60 degrees F. There is a
number assigned for the crude type at ARL, in this it is stated that how much crude oil was
received. Hence, the difference between the amount pumped and received is seen. There is
a separate section for KCDF.
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Crude oil Stock Reconciliation Report
This report is made at the end of the month. In this report, opening stock at fields is stated.Net
oil and water production is also stated. For artificial pumping, oil is sent, after usage this oil is
received back and stated in recoveries. Then there is a section of usage and consumption. At
the end, the closing stock at the fields is stated. There is separate section for KCDF stock.
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Report on Crude oil Transit Losses for Khaur
In this report, sources are stated through which crude oil is sent, that is Khaur-ARL pipeline,
road transportation. It states that how much crude oil was dispatched and how much was
received by ARL. The difference between the two values will state loss/gain at 60 degrees F
in percentage form.
CRUDE PRICING:
There are 2 types
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Condensate:
In this case, a benchmark is set. A single price is published in a magazine. So, you multiply the
weekly value with the published value to get the total value at the end of the month.
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Crude Oil
In this case, the value is published in a magazine on monthly basis. So, you multiply your
weekly value with the published value and then add the value to get total monthly value. For
this purpose, ARL sends a week wise crude receipt barrels at 60 degrees F for calculating the
monthly crude oil price.
For pricing, we have international pricing standard, which is known as Basket prices FOB
GULF. It comprises of DAS Blend, Oman Blend & Dubai. In some fields, average of all the 3
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values are used while in latest fields the average of Oman Blend and Dubai is used. After
average calculation, the Marine Value & EST Hem Discount Rate is added in it, then these
values are published. Yield differentiation value is also added, which is found by finding the
difference between Arab Light Value & Crude oil composition. Then from the gross sales,
you will give the respective owners their shares.
SALES TAX INVOICE:
At the end of the month, a sales tax invoice is generated. In this invoice, POL own operations,
Pol operated and non-operated JV is stated. It comprises of quantity sold, amount in US$, the
conversion rate and sales tax, through which total value is calculated. For TAL non-operated
JV, a separate section is formed.
PAYMENT:
In payment, the refinery purchases the invoice on behalf of the president. In some fields, the
payment is made 100% in PKR, while in some fields 70% payment is made in PKR while 30%
in US$.
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Monthly Crude Payment Detail
It comprises of field name, the invoice month, the amount in US$ (except for Adhi), exchange
rate according to the agreement and quantity in barrels. Then, there is a statement showing
POL foreign crude payments. In the end, a detailed receipt application is formed in which you
state the amount applied. In case of loss, a sales tax credit note will be issued while in case of
gain a sales tax debit note will be issued.
RECEIVABLES:
Receivables are generated when invoice is issued. When receivables are received, they are
credited and bank is debited. In case of overdue, it is divided into 3 section: current, 30-60
days, 60-90 days, 91 days and above. The party’s in it are: ARL, APL, PARCO & PRL.
GAS TREATMENT:
Gas is received in sour form, by removing different components such as Sulphur, it is turned
into sweet gas. Then it is send to Meyal. LPG, Gasoline and Solvent oil is extracted from this
gas. Some of the remaining gas is used while the remaining is sold to SNGPL. MMSCF is used
as a base for measurement while MMBTU is for checking temperature. SNGPL has assigned
the composition of different components found in gas such as Sulphur. If the requirement is
met, it is known as on spec gas otherwise it is known as off spec gas. Daily report of MMSCF
& MMBTU is formed.
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“WEEK 3”
DATE: (15-AUG-2023 to 21-AUG-2023)
SECTION: Commercial Contracts (Technical Invoices Payables)
SUPERVISOR: Sir Fahad Paracha
NON-TECHNICAL:
Sir Shahid gave me an overview of the non-technical payable section. He told me about the tax
rates applied on goods, services, contract, transportation, specified services and rent payment.
Withholding tax is to be given within 7 days. For goods, a request is sent to the materials
department. After the approval of the order by GM, a purchase order is formed. After attaching
the required documents and getting the signature of the required people, the invoice is
generalized in payable and a cheque is formed in treasury while in case of services, the material
department is not involved and no purchase order is issued. The respective departments will deal
directly with the invoices related to them.
TECHNICAL:
Government announces blocks for bid in which companies participate. After reviewing the data,
you tell your plan. After winning the bid, you will form a contract with the government. The
department dorms economics and tells about the details of the area.
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Acquisition
First it was 2D, now it is 3D. Acquisition on the area is mainly acquired by Chinese. Plan is
issued and the materials department issues forms to the companies involved. Budgeting is
done through NR. Bids are then deposited.
Finance see the costing, approval from CFO, then the contract is formed. Main focus is on
sales tax, clause to state bank in case of payment. The company comes with equipment,
geologist. The data is received by POL that is generated through blasting. There is 80% risk
and 20% non-risk. 12.5% withholding tax and there is no sales tax during processing.
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Exploration
It involves logging through gamma rays and BSC MAS. Then, data is taken and you get to know
about the reservoir through mud color changing, mud logging etc. Mud motor tells about the
performance. For salt range oil based mud is used, otherwise water based mud is used.
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Drilling
In this step, the process of drilling starts. Then, the zones are tested to see if anything comes
up with the guns. A well can be perforated (it can be shut) to build pressure, then it is opened
after 24 hours and a gun is fired. If there is a flare, then it means that there is oil and gas.
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Finalization
In this case, actual bids are required. Invoices cannot be done until they are immobilized.
Estimate will be made because the invoices will be made at the end of the month.
EQUIPMENTS:
Different equipment are provided by different companies for the process of exploration and
drilling. These components are attached with a string, they include: Bits, drilling jar,
stabilizer, mechanical thruster, drill pipes.
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1st section =26 (26 inch jar)
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2nd section = 17 (16 inch jar)
Drill bid and drill hole change. Jars and services are taken on rent.
CONTRACTS WITH COMPANIES:
Following companies have a contract with POL:
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Whetherford
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Halliburton
INVOICE ENTRY:
Invoice entry for technical and non-technical is same in oracle, but in technical you write BSN
number once by attaching sheets while in non-technical you write the BSN number on each
page. In case of technical, you will calculate sales tax by applying exchange rate. USD will be
converted to PKR to calculate sales tax. Mud logging entries are made monthly.
PROVISION:
The company will form an estimated cost for the invoices that have not been registered or
paid yet. Registration is done on the basis of provision. Then, the previous month provision is
reversed while the current one is provisioned. The data is taken from business intelligence
website. In case of JV, if there is a difference between the estimated and actual cost, then the
difference is explained. Monthly input sheet is generated. Input is claimed against the output.
Return is received on the 18th of each month.
I also entered an invoice, which helped me to develop a better understanding of how the
entries are made in system.
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“WEEK 4”
DATE: (22-AUG-2023 to 28-AUG-2023)
SECTION: Taxation & Insurance
SUPERVISOR: Sir Ali Hasan
This sections deals with application of sales tax and income tax and insurance.
DIRECT TAX:
Income Tax is Direct tax which is applicable in net income/payable. It is calculated annually.
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Making Provision for Tax
You form a breakup of all expenses in terms of sources and area. Tax is applied on profit after
all adjustments. In computation of tax, some expenses are allowed while some are not
allowed. Accounting depreciation will be added back while taxable depreciation is allowable
expense. Then a taxable income will be generated, from which taxable liability will be arrived,
which is paid in advance to government FBR rates are applied on the net taxable profit.
INDIRECT TAX:
Indirect tax comprises of sales tax which is applicable on sale of goods and services. It is
applied when a sale is done.
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Sales Tax
Major earning is through crude, natural gas and LPG while some of the sales is from solvent
oil and Sulphur. Asset which is not usable can be sold in the form of scrap.
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Classification
Sale of goods
For example: crude, gas, LPG, casing, chemical etc.
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Sale of services
To provide services, for example maintenance services.
Sale tax is made up of 2 things:
Tax on SALES
It is known as output tax because when we sale something, it is going from our territory to
someone else’s. It is liability paid to the government.
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Tax on PURCHASES
It is known as input tax because when we purchase something, it comes in our territory. It is
asset. It is adjusted to reduce output tax liability.
INSURANCE:
It is also known as financial cover. According to the terms and conditions, companies provide
maximum coverage of the assets for 1 year, in case of any loss. Insurance companies have some
terms and factors due to which they provide 1 year insurance as dynamics might change.
Types of Insurance
Comprehensive Machinery Insurance
Insurance is provided to major assets such as plants and machinery. Replacement value is
calculated, on the basis of which quotation is asked.
Control of Wells
Phases of wells include drilling, producing, shutting and P&A. Insurance is obtained for wells.
Terrorism Insurance
This insurance is obtained to provide protection against terrorist attack on plants, machinery,
wells and assets.
Group Life Insurance
Life insurance of people at technical fields & non technical, since they are at high risk. Staff at
company’s payroll or those who are in direct contact, come under this insurance.
Vehicle Insurance
Protection of pool of cars e.g. 4 wheeler, bowzer etc. Against accident/loss. This insurance is for
cars in both head office and fields.
Miscellaneous Insurance
Insurance for all the things that are not covered in other types of insurance.
Conclusion
Pakistan Oil Fields have an excellent working environment. I found everyone honest, helpful and
friendly. It was a great experience for me. I learned about teamwork and how everything
operates in a professional environment. Every department of finance has its own importance. I
learned a lot in all the sections of finance department during these 4 weeks.
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