Attock Refinery Limited case

Topics: Petroleum, Oil refinery, Limited company Pages: 7 (1282 words) Published: November 17, 2014
Management Appraisal at Attock Refinery Limited

Marketing I

Group Members
Hira Tanveer
M.Waqas Tahir
Rabbia Shahid
Tehmas Zaki
Attock Refinery Limited (ARL) was incorporated as a Private Limited Company in November, 1978 to take over the business of the Attock Oil Company Limited (AOC) relating to refining of crude oil and supplying of refined petroleum products. It was subsequently converted into a Public Limited Company in June, 1979 and is listed on the three Stock Exchanges of the country. The Company is also registered with Central Depository Company of Pakistan Limited (CDC). Original paid-up capital of the Company was Rs 80 million which was subscribed by the holding company i.e. AOC, Government of Pakistan, investment companies and general public. The present paid-up capital of the Company is Rs 852.93 million. ARL is the pioneer of crude oil refining in the country with its operations dating back to 1922. Backed by a rich experience of more than 90 years of successful operations, ARL’s plants have been gradually upgraded / replaced with state-of-the-art hardware to remain competitive and meet new challenges and requirements. There were subsequent discoveries of oil. ARL’s current Expansion or Up-gradation Projects comprises of Preflash unit, Naphtha Isomerization unit, Diesel Hydro Desulphurization (DHDS) unit and expansion of existing Captive Power Plant. This would increase refinery capacity by 10,400 bpd, motor gasoline production would increase by 20,000 Tons per month and would enable ARL to produce Euro II compliant low sulphur diesel. These Projects are expected to be completed by September 2015. The Company is ISO 9001, ISO 14001, ISO/IEC 17025, OHSAS 18001 certified and is the first refinery in Pakistan to declare implementation of ISO 50001 (Energy Management System). Source:

Oil refining in Pakistan has been a government regulated industry. The minimum return guaranteed by the government to the oil refineries was 10%net of taxes on issued capital. Returns over 40% were skimmed by the government. The new petroleum policy of March 1994, has removed the 40% return if surplus % was to be used for development or up-gradation projects. The petroleum industry in Pakistan was experiencing a major strategic fit due to internal and external environmental changes, specifically because of deregulation of the industry and entry of multi-national corporations. This changing environment refers to the company now would have to develop a fresh strategy and supporting systems and human resources with a strong knowledge base to be able to compete effectively. Therefore, Adil Khattak; Assistant General Manager Maintenance Engineering & Human Resources got a need to re-evaluating the role of HR systems taking into account internal and external changes. For that matter, it becomes an important concern to view organization’s management appraisal system. The main challenge was to examine the current system and make sure it aligned with the company’s changing environment. One highlight that becomes a major concern for him after examining the current system that the authenticity of the management appraisal system were at questioned because it gives subjective opinion and does not differentiate between high and low performers, however it linked to reward systems only.

Qualitative Data:
1) Lately, oil refining in Pakistan had been a government regulated industry. 2) The Petroleum industry in Pakistan was experiencing a major strategic shift due to internal and external environmental changes. 3) ARL had been forced to come out of the Shell, where the sales were locked and returns guaranteed by the government. 4) The government of Pakistan remained a shareholder of ARL, the managerial control was with AOC. 5) The changing environment meant that the company would have to develop a fresh strategy and supporting systems to be able to compete...
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