Financial analysis of oil and gas exploratory companies in Pakistan

Abstract

The oil and gas sector has a lot of potential in Pakistan. Pakistan is classified as low priority by foreign investors because of the unstable economic and political situation.However, efforts are being made by the Government to promote investment in the oil and gas sector, by various incentives such as liberal granting of exploration licenses.The objective of this study is to analyze whether the Oil and Gas sector in Pakistan has actually progressed and whether there are better opportunities for investment and growth in this sector now than there were in the past.For the purpose of determining the trend of growth in the Oil and Gas Sector, four Exploration and Development (E&P) Companies were selected and their financial data analyzed over a period of five years (1999 - 2003).Financial data relevant to the sample companies was gathered from published accounts of the companies, in their annual reports. This data was condensed and summed up for the four companies and presented in tables and then used for analysis. The results were held to be representative of the entire Exploration and Production Sector and seem to show a marked trend of growth in the financial indicators reveal that there has been a noticeable improvement in the growth of this industry.