PSO to enhance storage capacity, diversify projects

PSO is planning to boost storage capacity, expand retail network and diversify projects to meet rising energy.

KARACHI: The Pakistan State Oil (PSO) is planning to boost its storage capacity, expand retail network and diversify projects in a bid to meet rising energy needs of the country and speed up the company’s growth.

PSO Managing Director Irfan Qureshi announced this while sharing his plans and vision for a progressive path during the 34th annual general meeting of the company on Wednesday.

He said PSO, the largest oil marketing company of the country having a market share of 71 per cent, would also start a power project and go for technological advancement. Initiatives to promote and re-launch lubricants in the upcoming quarter and explore potential opportunities for liquefied petroleum gas storage were also highlighted.

Elaborating, a PSO official said the company has current storage capacity of one million tons of oil, 80 per cent of the country’s capacity, which is mainly based in Karachi. “We have planned to expand the capacity and this time we will focus on northern and upcountry areas.”

The official said the company would open 30 new retail outlets across the country in the current financial year (July-June 2010-11) to add to the existing network of 3,500 filling stations.

For diversification of projects, the company is acquiring Pakistan Refinery Limited (PRL) and initial approvals by boards of the two companies have already been given. “Now we are hiring financial consultants to conduct due diligence of the transaction, which may be completed in two months,” the official said.

The acquisition of the refinery, which is expected to be completed in four months, will help overcome shortage of oil products and limited domestic refining capacity, prompting the need for imports.

In 2009-10, the PSO achieved the highest turnover of Rs877 billion and declared a profit after tax of Rs9 billion. Its current earnings per share (EPS) of Rs52.8 stood at a record high in the history of the energy industry, MD Qureshi said.

Discussing financial challenges, PSO Board chairman Nazim Haji said: “PSO management has formulated various strategies to overcome liquidity problems and the company will implement aggressive marketing strategies.”

The meeting also discussed issues of inter-corporate debt and one per cent turnover tax. PSO says it has receivables of Rs142 billion and payables of Rs123 billion.

Published in The Express Tribune, September 30^th, 2010.