Analysis of Financial Statements PAKISTAN PETROLEUM LIMITED INTRODUCTION Pakistan Petroleum Ltd is Pakistan's Premier E&P company, the

oldest and largestExploration and Production Company in the country was incorporated on 5th June 1950subsequent to the promulgation of the Pakistan Petroleum Production Rules, 1949 withthe main objective of conducting exploration, development and production of Pakistan'soil and natural gas resources. PPL inherited all the assets and liabilities of the Burmah OilCompany (Pakistan Concessions) Limited and commenced business on 1st July 1952. PPL and its ex-parent Burmah Oil Company have been active in the subcontinent sincethe early part of the 20th century. A total of 239 wells including 65 exploratory and 174appraisal / development wells have so far been drilled which resulted in the discovery ofabout 19.90 Tcf gas (both operated and non-operated leases). A gas condensate/oil field atAdhi with original recoverable reserves of 1,253 MT liquefied Petroleum Gas and 39.4MMbbl of oil/condensate was also discovered by PPL. The Company also operates a Baryte mine in Balochistan province. It produces oil welldrilling grade Baryte powder from the mine, which has proven reserves of 1.25 milliontones. For the year 2004-05, PPL's share of average production from its operated andnon-operated fields was 953 MMcfd of gas, 1,372 bpd of oil/NGL and 26 tones per dayof LPG. Production of gas from these fields meets about 25.1% of the country'sindigenous production. The gas, LPG and NGL production from PPL operated and non-operated fields for the year 2004-05 in terms of oil equivalent, was about 171,205 barrels of crude oil per day. The Company has a staff of about 2520 as at 31 May, 2006 employees with about 431qualified technical staff in the fields of engineering, computer and earth sciences. PPLhas well established IT department and all staff in the Head Office has access tocomputers and are interconnected through Local Area Network (LAN). The Wide AreaNetwork (WAN) has also been established connecting PPL's three major producing fieldsand Regional Office in Islamabad with the Head Office at Karachi. The Company hasimplemented SAP in 2004 integrating core business processes using Costing, Finance,Human Resources, Materails Managemnet, Plant maintenanceand Project Systemsmodules. The Government of Pakistan (GoP) in September 1997 purchased the entire equityinterest of Burmah Castrol PLC, formerly Burmah Oil Company, in the Company(comprising 21 million ordinary shares of Rs.10 each) representing 63.91 percent of theShare Capital thereby increasingits holding in the Company to 93.35percent.Subsequent to June 2004, the GoP has disinvested a portion of its equity in the Companyequivalent to 15% of the paid up share capital of (i.e. 102.873 million shares of Rs.10each) through an Initial Public Offering (IPO). The GoP has made a policy decision toprivatize PPL and IPO is a significant step towards this direction.

PPL CAPITAL STRUCTURE The current shareholding structure of the Company is as follows: S.No (i) (ii) (iii) Shareholders Government of Pakistan International Finance Corporation Private shareholders Percentage 78.40% 4.26% 17.34% 100.0%