Project Report

Petroleum Industry of Pakistan

Submitted to:
Dr. Taiba Zahid
Submitted by

Danish Ali BME163002

Mansoor Sadiq BME163011
Hassan Sarfaraz BME163048

Course: Total Quality Management

May 31st, 2020

DEPARTMENT OF MECHANICAL ENGINEERING

CAPITAL UNIVERSITY OF SCIENCE & TECHNOLOGY
ISLAMABAD
Abstract
Petroleum industry is one of the most important industries in the world. It is the mainstay
of the modern civilization. Its versatile usage in a variety of fields in modern times has made it
indispensable for economic growth of mankind. Due to the importance and sheer scale of this industry
we have selected this for our project. In this project a variety of aspects related to the petroleum industry
in general will be discussed. In start we will look into the company’s (OGDCL) history and its
organizational structure. Then comes the important section of production planning which discusses about
the planning phase i.e. how different production steps are planned. This follows with the supply chain of
the company that broaden the knowledge about the scale and importance of each area. Important aspect
which plays a key role in industrial advancement is the testing of the products being formed. This insures
production of quality products. As petroleum industry encompasses a variety of products, so some of the
most important will be discussed in report. Petroleum industry is one of the biggest industries in Pakistan
and OGDCL is the revenue and net income generating company in Pakistan. Although it generates
significant revenues still Pakistan is a net importer of petroleum products. In this report different social,
legal and import policies will be discussed. The major drawback of petroleum sector is that is cause
serious environmental issues which are having devasting effect on the flora and fauna of the country.
Industries are finding ways in the form of latest technologies to contain and eventually lessen the
environmental problems.
Contents
1. Introduction of Company ..................................................................................................................... 5
2. Overall company structure .................................................................................................................. 7
2.1. Organizational Chart ..................................................................................................................... 8
3. Production planning & Control of the company ................................................................................... 9
4. Flow chart of the production process and supply chain of the company............................................. 11
4.1. Production Process ..................................................................................................................... 11
4.2. Supply chain process ................................................................................................................... 12
5. Product specific quality tests ............................................................................................................. 13
5.1. Volatility (ASTM D86) .................................................................................................................. 13
5.2 Sulfur (ASTM D2622) .................................................................................................................... 13
5.3. Viscosity (ASTM D445) ................................................................................................................ 13
5.4. Ash Content (ASTM D482) ........................................................................................................... 14
5.5. Corrosivity (ASTM D130) ............................................................................................................. 14
5.6. Heating Value (ASTM D240) ........................................................................................................ 14
5.7. Lubricity (ASTM D5001) .............................................................................................................. 14
5.8. Octane Number (ASTM D2699) ................................................................................................... 14
6. Byproducts of the company ............................................................................................................... 15
6.1. Liquid petroleum gas (LPG) ......................................................................................................... 16
6.2. Naphtha...................................................................................................................................... 16
6.3. Gasoline...................................................................................................................................... 16
6.4. Kerosene..................................................................................................................................... 16
6.5. Diesel oil ..................................................................................................................................... 16
6.6 Lubricating oils ............................................................................................................................. 16
7. Social and Legal Practices .................................................................................................................. 17
7.1. Legal ........................................................................................................................................... 17
7.1.1. Refining................................................................................................................................ 17
7.1.2. Blending ............................................................................................................................... 17
7.1.3. Transportation ..................................................................................................................... 17
7.1.4. Storage ................................................................................................................................ 18
7.2. Social .......................................................................................................................................... 18
 7.3. Import ........................................................................................................................................ 18
8. Environmental issues and steps taken in the industry ........................................................................ 19
8.1. Environmental Issues .................................................................................................................. 19
8.1.1. Atmospheric impact ............................................................................................................. 19
8.1.2. Aquatic impact ..................................................................................................................... 20
8.1.3. Terrestrial impact ................................................................................................................. 20
8.1.4. Ecosystem impact ................................................................................................................ 21
8.1.5. Potential environmental emergencies .................................................................................. 21
8.2. Steps taken in the industry .......................................................................................................... 22
8.2.1. Waste treatment and disposal techniques............................................................................ 22
8.2.2. Oil spill contingency planning ............................................................................................... 22
8.2.3. Atmospheric emissions ........................................................................................................ 22
8.2.4. Produced water.................................................................................................................... 23
8.2.5. Solid waste ........................................................................................................................... 23
9. ISO and other certifications acquired by the company ....................................................................... 24
9.1. What is ISO Certification? ........................................................................................................... 24
9.2. Why it is needed ......................................................................................................................... 24
9.3. Company certifications ............................................................................................................... 25
10. Comparison of the quality with the production in the rest of the world ........................................... 26
10.1. Gasoline:................................................................................................................................... 26
10.2. Diesel:....................................................................................................................................... 27
11. Conclusion ....................................................................................................................................... 28
12. References....................................................................................................................................... 29
1. Introduction of Company
Prior to OGDCL

Pakistan Petroleum Ltd. (PPL) and Pakistan Oilfields Ltd. (POL) had performed exploration activities in
the country prior to the advent of OGDCL. In 1952, a huge gas field at Sui in Baluchistan was discovered
by PPL. This discovery created tremendous interest in exploration and production, and five major
international oil companies entered into contractual agreements with the government.i

These companies conducted detailed geological and geophysical surveys during the 1950s, and drilled 47
exploratory wells. A few tiny gas fields were discovered as a result. Despite the above-mentioned gas
discoveries, exploration activity declined in the late fifties, after reaching its peak in the mid-1950s. The
main objective or concern of the private companies was to earn as much profit as possible and therefore
they were not interested in the development of the gas resources/discoveries particularly when there was
no infrastructure and gas demand in the country. With exploration and extraction at its lowest levels,
several foreign exploration contracting firms decided to end their operation and in 1961 either reduced or
decided to withdraw land holdings.

Establishment of OGDCL

In order to revive exploration in the energy sector, Pakistan's government signed a long-term loan
agreement with the Soviet Union on March 4, 1961, through which Pakistan received 27 million rubles to
finance exploration equipment and services from Soviet experts. According to the Agreement, an
Ordinance dated 20 September 1961 established OGDC. The Company was responsible for implementing
a well thought-out and comprehensive exploratory program and for preparing and supporting the
potentials for oil and gas in Pakistan.

As an instrument of policy in the oil and gas industry, the Corporation followed the exploration and
production directives provided by the Government of Pakistan. However, day-to-day management was
conferred in a government-appointed five-member board of directors. The GOP structured the financial
resources in the early stages, since OGDC lacked the ways and means to generate the risk capital. The
first ten to fifteen years were dedicated to manpower growth and infrastructure building to pursue even
broader exploration programs.

Initial Successes

A number of international donors, such as the World Bank, the Canadian International Development
Agency (CIDA) and the Asian Development Bank (ADB), provided the basis through lending and
granting assistance for the major development projects. The concerted efforts of OGDC were very
successful because they led to a number of major oil and gas discoveries between 1968 and 1982. In 1968
the Toot oil field was discovered that paved the way for further exploratory research in the North. The
Company changed its strategy to upgrade its equipment base during the period 1970-75, and pursued a
very vigorous work program. This led to the discovery in the 1980s of a number of oil and gas fields, thus
giving the company a measure of financial sovereignty. These include the fields of Thora, Sono, Lashari,
Bobi, Tando Alam & Dhodak oil / condensate, and Pirkoh, Uch, Loti, Nandpur and Panjpir gas fields
which are discoveries that testify to the Corporation's professional capabilities.
Transition to a self-financing entity

Noting the success of the Company due to major oil and gas discoveries in the eighties, in July 1989 the
Government transferred the Company from the Federal Budget and allowed it to finance its operations
with self-generated funds.

The financial year 1989-90, was the first self-financing year for OGDC. For OGDC it was a huge
challenge. In the first year of self-financing, the obvious initial aim was to produce enough money to
sustain the momentum of discovery and growths at the speed envisioned in the Public Sector
Development Program (PSDP) as well as meet its debt servicing commitments. Not only enough internal
funds were generated by OGDC to fulfill its debt obligations but it also invested sufficient resources in
exploration and development to increase reserves and production in the country.

Conversion into Public Limited Company

OGDCL was a statutory entity prior to 23 October 1997, and was known as OGDC (Oil & Gas
Development Corporation). It was incorporated as a Public Limited Company named OGDCL (Oil & Gas
Development Company Ltd) on 23 October 1997.

Geographical Presence
2. Overall company structure
Board of directors

A top managerial staff (B of D) is a chosen gathering of people that speak to investors. The board is an
administering body that ordinarily meets at standard interims to set strategies for corporate administration
and oversight. Each open organization must have a top managerial staff. Some private and charitable
associations likewise have a top managerial staff.ii

Managing Director /CEO

A (CEO) is the most noteworthy positioning official in an organization, whose essential obligations
incorporate creation major corporate choices, dealing with the general activities and assets of an
organization, going about as the primary concern of correspondence between the governing body (the
board) and corporate tasks and being the open essence of the organization. A CEO is chosen by the board
and its investors

Chief Financial Officer (CFO)

A (CFO) is the senior official answerable for dealing with the money related activities of an organization.
The CFO's obligations incorporate following income and money related arranging just as examining the
organization's budgetary qualities and shortcomings and proposing restorative activities.

Chief Operating Officer (COO)

The head working official (COO) is a senior official entrusted with supervising the everyday managerial
and operational elements of a business. The COO normally reports straightforwardly to the (CEO) and is
viewed as second in the levels of leadership. In certain partnerships, the COO is known by different
terms, for example, "official VP of tasks," "boss activities official," or "activities chief

Executive Director (ED)

An official chief is the senior working official or supervisor of an association or organization, generally at
a non-benefit. Their obligations are like those of a (CEO) of a revenue driven organization. The official
executive is liable for vital arranging, working with the Board of Directors, and working inside a financial
plan

General Manager (GM)

A head supervisor (GM) is accountable for part or the entirety of an organization's tasks, including
creating income and controlling expenses.
2.1. Organizational Chart

Organizational Chart of OGDCLiii

3. Production planning & Control of the company

Schematic of production planning and decision making

The above shown figure is a schematic representation of hierarchical decision-making framework and
control of the company. This is a detailed but a general representation about how exploration, production
and refinery processes are planned and controlled at a petroleum industry.

This figure shows that the planning process start at corporate strategic planning phase from there
production is planned at corporate level. Here corporate planning end and refinery planning starts i.e. hoe
the process of a refinery will be carried out. This part is also known as “dream” as here future plans
regarding refinery process are laid. Then comes the “reality” part where actual work starts in the form of
different operations like Refinery Scheduling, Real time optimization, Advanced control, Regulatory
control, Data acquisition and reconciliation, Accounting, Performance monitoring, Refinery back casting,
and in the end Corporate back casting. These planning and production phases are very complex are
normally connected with software in order to check the progress at each level. This software usage in
these control process insures optimum performance, less chances of error and detection of problems at an
initial stage.iv

All these planning stages follow the planning circle i.e. Plan - Do - Check - Act

This signifies that each step is first meticulously plan, then that plan is acted upon in the “do” stage, then
data acquisition takes place and that data is then thoroughly “checked” according to the set requirements.
In the end “action” takes place according to the results obtained in the checking phase.
 Production planning and control management system

The figure above illustrates the production planning and control management system implemented at
OGDCL. The development and implementation of this system is to improve the company’s performance
and ultimately reduce the adverse impacts of the operations, activities and services on the environment.

The system consists of five major stages. They are as follows:

• Planning
• Support
• Operation
• Performance Evaluation
• Improvement
The scope of this planning system covers the following key areas:

• Projects (Engineering & Construction)

• Exploration and Development (Drilling, Geological Services & Field Surveys, and Seismic
Operations)
• Production and Plants (Raw Gas Purification for Distribution Network, Recovery of LPG/NLG
and Condensate Oil Storage) v
The company is controlled by various personal i.e. there is a hierarchical system. The descending order of
this hierarchical system is given below.

• Board of Directors
• Chief Executive Officer / Managing Director
• Chief Operating Officer (controller of operations)
• Chief Financial Officer (controller of finances)
• Executive Director
• General Manager

4. Flow chart of the production process and supply chain of the company

4.1. Production Process

Petroleum Production Process Flow Chart

The above image is the schematic process flow diagram of the production process in a typical oil refinery.
An oil refinery or petroleum refinery is an industrial process plant where extracted crude oil is processed
and the refined into useful components/products such as gasoline, diesel, naphtha, asphalt base, liquified
petroleum gas, heating oil and kerosene. Oil refineries are generally very large, sprawling industrial
setups with consist of extensive piping networks running throughout the plants, carrying streams of
different fluids from one chemical processing plant to the next. This process comes after the exploration
process. Here crude oil enters the process plant and is then initially separated into different components
using the distillation process. The products attained from this initial process are then further passed
through various processes. These processes and their conditions entirely depend on the component being
processed. Some products require single process after distillation while others require multiple process to
get to the final stage where they are ready to be transported to their desired places of usage. The blue
color-coded name on the above figure indicates that these are the final products.vi

4.2. Supply chain process

A complete supply chain process of the petroleum industry

The above image is the complete supply chain process of a petroleum industry. At the start the production
of petroleum and natural gas takes place both Onshore and Offshore. From there the extracted crude oil is
gathered and then sent to the crude oil refineries, imported oil is also brought in to the refineries at this
stage. There crude oil is refined and separated into various fractions. After refining the products i.e.
gasoline, diesel etc. are either exported, send to large end-users or to the small end-users.vii
On the other hand, natural gas is transported to gas processing plant after extraction. From there it is then
supplied as natural gas liquids (consisting of ethane, propane, butane). From the processing plant the
natural gas is transported to transmission compressor stations where compression takes place and then the
gas is stored either in the underground storage or as the liquefied natural gas (LNG) storage. The natural
gas in the form of LNG is then transported to LNG terminal from where it is then exported on tankers.
LNG imports are also received on the same terminal. The gas is then supplied to natural gas distribution
place from there it is then delivered to large end-users and small-end users i.e. households.

5. Product specific quality tests

There are a number of tests that are carried out in the petroleum industry in order to check and verify the
quality of the products. These tests ensure that the products are in compliance with the market standards
and with help of these tests better products can be prepared which will have less harmful impact on the
environment.

5.1. Volatility (ASTM D86)

The characteristics of hydrocarbon distillation (volatility) have an important impact on their safety and
performance, specifically in the context of fuels and solvents. The boiling range gives information about
fuel’s composition, properties and behavior during storage and utilization. Volatility is the significant
measure of a hydrocarbon mixture's tendency to produce potentially explosive.

The test involves the atmospheric distillation of petroleum products and liquid fuels using a laboratory
fractional distillation unit to quantitatively determine the boiling range characteristics of products such as
light and intermediate distillates, automotive spark-ignition engine fuels with or without oxygenates,
aviation gasoline, aviation turbine fuels, diesel fuels, biodiesel mixtures. viii

5.2 Sulfur (ASTM D2622)

This test examined the determinants of total sulfur in single-phase petroleum and petroleum products,
either liquid under ambient conditions, liquefiable with moderate heat, or soluble in hydrocarbon solvents.
These may include diesel fuel, jet fuel, kerosene, other distillate oil, naphtha, residual oil, base oil
lubricating, hydraulic oil, natural gas, unleaded petrol.

5.3. Viscosity (ASTM D445)

Many petroleum products, and also some non-petroleum materials, are often used as lubricants, and the
proper design of the equipment depends on the appropriate viscosity of the used liquid. Furthermore, the
viscosity of many petroleum fuels is important for estimating optimum storage, handling and conditions
of operation. So accurate viscosity determination is essential for many product specifications.

This test method describes a procedure for evaluating the kinematic viscosity of liquid petroleum
products, both transparent and opaque, using a calibrated glass capillary viscometer to determine the time
for a volume of liquid to flow under gravity.
5.4. Ash Content (ASTM D482)
Knowledge of the quantity of ash-forming material present in a product can give information as to
whether the product is suitable for use in a given application. Ash may come from oil or water-soluble
metallic compounds or from unnecessary solids such as dust and corrosion.

This test method includes the determination of ash from distillate and residual fuels, gas turbine fuels,
crude oils, lubricating oils, waxes, and other petroleum products in the range 0.010 to 0.180 percent by
mass, in which any ash-forming materials present are usually considered to be harmful impurities or
pollutants. The analysis is limited petroleum products such as phosphorus compound.

5.5. Corrosivity (ASTM D130)

Crude petroleum produces sulfur compounds which are often extracted during the refining process. Of the
sulfur compounds left in the petroleum product, however, some may have a corroding effect on specific
metals and this corrosiveness is not inherently directly related to the overall sulfur content. The effect
may be different depending on the chemical types of sulfur compounds present.

This test method involves evaluating the corrosiveness of aviation gasoline, aviation turbine fuel,
automotive gasoline, cleaner’s solvent, kerosene, diesel fuel, distillate fuel oil, lubricating oil, and vapor
pressure of up to 126 kPa of natural gasoline or other hydrocarbons. ix

5.6. Heating Value (ASTM D240)

Combustion heat is a measure of the available energy from a fuel. When considering the thermal
efficiency of equipment for producing either power or heat, knowledge of this value is essential. The
combustion heat as calculated by this test method is identified as one of the chemical and physical
specifications of military turbine and commercial fuels, as well as aviation fuels.

This methodology involves the determination of the combustion heat of liquid hydrocarbon fuels ranging
from that of light distillates to that of residual fuels in volatility.

5.7. Lubricity (ASTM D5001)

A lack of lubricity in an aviation fuel has often been attributed to wear due to excessive friction resulting
in shortened life of engine components such as fuel pumps and fuel controls.

This research method includes the assessment of the wear dimensions of the boundary lubrication
properties of aviation turbine fuels on surfaces of rubbing steel.

5.8. Octane Number (ASTM D2699)

Research Octane Number correlates efficiency with commercial automotive antiknock spark-ignition
engine under mild operating conditions. Octane Number is used by engine producers, petroleum refiners
and marketers, and in commerce as a primary fuel and engine matching specification test.

This laboratory test method covers the quantitative determination of the liquid spark-ignition engine fuel
knock rating in Research Octane Number terms, including fuels containing up to 25 percent v / v of
ethanol. This test method may however not apply to components of fuel and fuels that are primarily
oxygenates.
6. Byproducts of the company
Crude oil is a combination of various petroleum products. This crude oil can’t be used in raw form and
the different components with which it is made up of must be separated to get the byproducts. The most
important production process in the petroleum industry is distillation. The process of distillation, also
known as fractional distillation, is used to separate crude oil into a variety of different components
ranging from petrol, diesel to kerosene and asphalt. The process is too important to not mention here.
Fractional distillation is the process through which oil refineries in a distillation tower separate crude oil
into different, more beneficial hydrocarbon products, based on their relative molecular weights. This is
the first step in crude oil processing, and is considered a critical separation process as it conducts the
initial rough separation of the various fuels. Separated fractions include gasoline, diesel, kerosene and
bitumen. Fractional distillation enables the manufacture of many useful products from crude oil, with
many environmental implications for the use of such useful products. x
The fractional distillation process is relatively simple, but is effective in the way it separates all the
various, complex components of crude oil. Firstly, the crude oil is heated to vaporize it, and is poured into
a distillation tower's base. Afterwards the resulting vapor rises through the vertical column. When the
gases go up into the container, the temperature decreases. As the temperature decreases, some
hydrocarbons start condensing and run off at different rates. Each condensing fraction at a specific level
contains hydrocarbon molecules with a similar number of carbon atoms. Such boiling point 'cuts' allow
for the separation of multiple hydrocarbons in a single process. This cooling with the tower height allows
the separation of the different fuels.
Following this initial refinement, individual fuels may undergo more refinement to remove any
contaminants or unwanted substances, or to improve the fuel quality through cracking.

Fractional distillation process with end products on the right

So, the different products obtained from crude oil are:

6.1. Liquid petroleum gas (LPG)

It usually has a carbon number between 1 and 5 and a boiling point of about 20 °C. LPGs are mostly in
the form of propane and butane, and their carbon number is 3 and 4 with boiling points of -42 °C and -1
°C respectively. They are usually used in LPG vehicles, as domestic and camping gas and also as
petroleum feedstock. xi

6.2. Naphtha
It is one of the products obtained from crude oil. It is also known as full range naphtha. Its boiling point
lies between 30 °C and 200 °C and the carbon number is between 5 to 12. This fraction is generally 15-
30% crude oil by weight. Its uses are as follows:

• For the production of additives for high octane gasoline in the refineries
• As a diluent for very heavy crude oil transportation
• In the cleaning process it is used as a solvent
• As a feedstock for many chemicals
• Also, as a feedstock to petrochemical olefins chain

6.3. Gasoline
This fraction or byproduct has a carbon number range between 4 and 12 and boiling point typically 120
°C. It is the primary fuel used in the internal combustion engines. In the initial days this byproduct was
sold directly as gasoline for cars, but with the passage of time the engines have become more
sophisticated and therefore require more precisely formulated fuel, so nowadays less than 20% of
gasoline is the raw gasoline at the pumps. Additional sources are now needed to meet demand, and
additives are used to control parameters such as octane number and volatility.

6.4. Kerosene
It is also one of the byproducts of crude oil. Its carbon number lie between 10 -16 while the boiling point
is between 150 °C and 275 °C. It is mainly used as an aviation fuel, and the best known blend is Jet A-1.
Kerosene is also used for heating purposes and lighting (paraffin lamps).

6.5. Diesel oil

Also known as petro diesel is one of the most important fraction obtained from crude oil. It is used in
diesel engines in cars, trucks, trains, ships and heavy machinery. It carbon number is between 8 to 21 and
the boiling point is between 200 °C and 350 °C.

6.6 Lubricating oils

They are also known as lubricant/lube. It is a class of oil which is primarily used to reduce heat, friction,
wear and tear between mechanical components that are in constant contact with each other. Carbon
number for lubes is in the range of 20 to 50 and their boiling point is 300 - 600 °C.
7. Social and Legal Practices
7.1. Legal
7.1.1. Refining

License

No person shall operate or construct any refinery without obtaining a license from the authority. xii

Application for license

An application for the grant of a license to operate a refinery shall be made to the authority before start of
a construction.

Specification of petroleum products

Every refinery shall produce petroleum products in accordance with the specifications laid down in the
policy guidelines issued by the Federal Government under the Ordinance.

Sale of petroleum products

No refinery shall sell any of its petroleum products to a person other than an oil marketing company, oil
blending plant, grease plant, reclamation plant or bulk consumer except through execution of a contract
specifying the quantity, supply schedule, specifications and pricing terms.

7.1.2. Blending

License

No person shall construct or operate a blending plant, grease plant, reclamation plant or produce or pack
refined lubricating oils or greases for sale without obtaining a license from the authority.

Supply of lubricating oil

No person having license for the operation of blending plant, grease plant, reclamation plant shall supply
or sell refined lubricants to any person other than his authorized dealer or agent or consumer if any.

Sale, purchase or storage of used lubricating oil

No person shall sell; purchase or store used lubricating oil except for supply to a licensed reclamation
plant or its authorized agent.

7.1.3. Transportation

License

No person shall construct or operate a pipeline for oil transportation or any activity of transporting oil
through pipeline and associated facilities except where the pipelines are an integral part of a refinery
facility or gathering pipelines situated wholly within the boundaries of an area where petroleum rights
apply and are owned or operated by the holder of a petroleum right without obtaining a license from the
authority.
7.1.4. Storage

License

No person shall operate any oil storage facility or undertake storage of oil for the purpose of commercial
storage of crude oil or petroleum products without obtaining license from the authority.

7.2. Social
For every company there are certain social practices known as “code of conduct” that it must adhere to.
OGDCL is no exception in this regard. Some of the important social practices are:

• The company must provide equal opportunity for the employment and must not discriminate on
the basis of sex, color, religion or creed.
• If an employee is aware that another employee is violating the rules set by the company, then he
or she is obliged to report that violation to the Company.
• Employee must maintain confidentiality of the Company and the information of the customers
that is disclosed to them.
• The company must respect the privacy of the data relating to the employees or third parties which
the company handles as part of information handling activities.
• The directors as well as employees must reject corruption in all forms (direct, indirect, public or
private). No direct or indirect engaging in bribery, payoffs, kickbacks, gifts and corrupt business
practices.
• The directors and employees of the company should not act in such a way that places themselves
in a position where their loyalty to the Company is divided. This could be due to any reason
including direct or indirect financial interest in a competitor, supplier and/or customer.
• The directors and employers should adhere to all the laws and conforms of the company to the set
standards of good corporate governance and avoid any conflict of interest.
• The Company should respect the interest of all the stakeholders and contracts should be
negotiated fairly and transparently.
• The Company must make and keeps records that fairly and accurately reflect Company’s
transactions in accordance with applicable laws and regulations. xiii

7.3. Import
Pakistan is an importer of oil as reserves in the country are not enough to cater for all the needs. And with
the passage of time modernization is taking place and the consumption of petroleum products is on the
rise. Some of the important import procedures or considerations are as follows:

• Mining, oil and gas and other petroleum sector companies are allowed to import second-hand
plants, machineries and other necessary equipment that are actually required in projects in
Pakistan. But these equipment would be subject to inspection before the shipment by any
internationally certified inspection company. This is to ensure that machinery is in good working
condition.
 • Oil, gas and petroleum companies are also allowed to import used drill rigs, provided they are not
older than 20 years. And must be subjected to pre-shipment inspection and should have a
minimum remaining life of 10 years.
• Oil, gas and petroleum companies are also allowed to import specialized vehicle-mounted
machinery and transport equipment such as concrete pumps, crane lorries, off highway use
dumpers, mobile transit mixer, cement bulker etc. These equipments should not be older than 5
years.
• Import of used hydraulic, lubricating, transformer oil and other similar oils or waste oil is
prohibited.
• Only oil refineries are allowed to import petroleum oil and oils that are obtained from bituminous
mineral crude.
• Furnace oil can only be imported by oil marketing companies, KESC, WAPDA and other
industrial consumers for self-consumption only.
• Automotive engine oils with quality level (API) SC/CC and above and gear oils of (API) GL-4
and above are allowed to be imported.
• Crude oil cannot be imported from India. xiv

8. Environmental issues and steps taken in the industry

8.1. Environmental Issues
Petroleum exploration, production, processing and making it available in the market is a very complex
process. The products formed are hazardous and are the most significant source of carbon emission and
other environmental problems. Such 'impacts' depend on the stage of a process, the project's size, scope
and complexity, the nature and sensitivity of the surrounding ecosystem, and the efficacy of planning,
pollution reduction, mitigation, and control techniques. The industry has been diligent in developing
and implementing management strategies, operating procedures and engineering technologies aimed at
reducing the effects on the environment, and this has decreased the number of environmental accidents
considerably. Some potential impacts are discussed here are:

• Atmospheric impact
• Aquatic impact
• Terrestrial impact
• Ecosystem impact
• Potential environmental emergencies xv

8.1.1. Atmospheric impact

Atmospheric problems are attracting increasing interest from industry as well as from the government
authorities around the world. This has compelled the oil and gas exploration and production industries to
focus on emission minimization procedures and technologies.

The main sources of atmospheric emissions from oil and gas production operations originate from:
 • flaring, venting (discharging) and purging gases;
• process of combustion, such as diesel engines and gas turbines;
• fugitive gases from loading processes and tankage, and losses due to plant equipment;
• airborne particulate matter from soil disturbance during infrastructure development and vehicular
traffic;
• particulate matter from other source of burning, for example testing of well.
Carbon dioxide, carbon monoxide, methane, volatile organic carbons, and nitrogen oxides are the major
emission gases. Emissions of sulfur dioxides and hydrogen sulphide can occur and rely on the
hydrocarbon and diesel fuel's Sulphur content, especially when used as a power source. Sulfur content can
in some cases lead to odor near the facility and also contributes in acid rain. xvi

8.1.2. Aquatic impact

The primary aqueous waste streams that result from the exploration and production of the petroleum
products are:

• produced water during the process;

• chemicals for cuttings and well treatment, also fluids for drilling operations;
• spills and leakage;
• cooling water;
• sewerage, domestic and sanitary waste;
• process, wash and drainage water.
The volumes of waste produced depend on the exploration and production phase. Waste volumes are
minimal during seismic operations, and are primarily related to camp or vessel activities. The key
aqueous effluents are drilling fluids and cuttings in exploratory drilling, while the primary effluent is
produced water in production operations-after the construction wells have been completed.

Oil-based fluids for drillings and oily cuttings have an increased effect on the aquatic environment due to
their increased toxicity and redox potential. The main governing factor of these effects is the oil content
of the discharge.

By volume the produced water is the largest aqueous waste which arises from petroleum production
operations, and some of the common constituents include varying amounts/quantities of heavy metal,
inorganic salts, and solids, chemicals for production, hydrocarbons, benzene, PAHs and sometimes
naturally occurring radioactive material (NORM).

Waste streams such as leakage and discharge of drainage waster also result in the pollution of the ground
and underground waters. Impacts are particularly profound where the ground and surface/underground
waters are utilized for household works.

8.1.3. Terrestrial impact

Potential soil impacts originate from three main sources:

• physical perturbation/disturbance arising from construction;

 • contamination as a result of spillage and leakage or due to disposal of solid wastes;
• indirect impact arising from opening access and social change.
Potential impacts of inadequate design and construction include soil erosion due to soil composition,
slope or rainfall. Soils normally maintain their integrity when they are left undisturbed and vegetated. But
soil erosion may result once the vegetation is removed and the soil is exposed. Changes in soil conditions
can result in widespread side effects such as changes in surface hydrology and drainage patterns,
increased siltation and habitat destruction, reducing the environmental capacity to sustain vegetation and
wildlife.

Besides causing soil erosion and altering hydrology, vegetation removal can also lead to secondary
ecological problems, especially in situations where many of the nutrients in an area are preserved in
vegetation (such as tropical rainforests); or where the few trees present are vital for wildlife browsing
(such as tree savannah); or in areas with very slow natural recovery process (e.g. Arctic and desert
ecosystems).

Because of its simplicity, burial or land-filling of waste in pits at drilling, processing and production sites
was a common waste disposal process in the past. Historically, inert, non-recyclable materials and drilling
solids have been buried in pits; the evaporation and storage of produced water, workover/completion
fluids; the emergency containment of produced fluids; and the disposal of stabilized waste. The risks
associated with pollutant migration pathways, however, can damage soils and usable water resources
(both surface and groundwater) unless leaching and seepage are contained.

8.1.4. Ecosystem impact

Plant and animal communities are also directly affected due o he changes in their environment and
ecosystem by variations in the quality of water, air and soil/sediment and also through disturbance by
noise, extraneous light and vegetation cover changes. These changes can impact the ecosystem directly:
for example, habitat, food and nutrient resources, breeding areas, migration paths, vulnerability to
predators or changes in herbivorous grazing patterns, which can then have a secondary effect on
predators.

Disruption of the soil and removal of vegetation and other side effects such as erosion and siltation may
affect ecological integrity, and may lead to indirect effects by upsetting nutrient balance and microbial
activity in the soil. Unless properly controlled, a potential long-term effect is habitat loss that affects both
fauna and flora, and can induce changes in the composition of species and primary production cycles.

8.1.5. Potential environmental emergencies

Plans for all seismic, drilling, production and processing activities should include special steps to resolve
emergencies that have the potential to threaten people, the environment and property. However, incidents
can still occur, even with all the required planning, design and the implementation of proper production
procedures and personal training. These emergencies are as follows:

• explosions;
• fires (facility and its surroundings)
• fuel, oil, gas, hazardous materials and chemicals spillage;
• oil or gas will blowout;
 • unplanned/sudden plant shutdown events;
• natural disasters and their effect on operations, e.g. flood, lightning, earthquake;
• war and sabotage

8.2. Steps taken in the industry

8.2.1. Waste treatment and disposal techniques

If waste disposal through pollution prevention is not possible, then waste management must be
accomplished by applying another set of initiatives — reduction, re-use, recycling, recovery, treatment
and responsible disposal — the approach inherent in the Cleaner Production program of UNEP. An area-
specific waste management plan relates directly to the ecological sensitivities, regulatory requirements
and available facilities/infrastructure of the geographical area involved in the choice of waste handling
and disposal options. Area waste management offers for planning, implementation and review
Reassurance regarding the:

• Environmental protection and continued compliance with laws;

• Continuous recruitment of field staff;
• Adequacy of the Plan itself; and
• Minimizing the waste volume and toxicity. xvii

8.2.2. Oil spill contingency planning

All activities should properly examine the hazards, size, nature and possible effects of oil spills and
develop appropriate emergency plans, including notifying the community of any identified hazards.
Contingency preparation bases are risk identification; risk reduction activities are designed and
implemented; preparedness analysis and testing procedures; and training of workers.

Contingency planning will promote the rapid deployment and efficient use of the required manpower and
resources to conduct emergency response operations and to sustain them. Exercises and training should be
performed on a daily basis to ensure the preparation. communications must be maintained with suitable
administrations, local governments, the media, nearby operators, contractors and staff.

Plans must clearly identify the actions needed in the event of a spill: the communications network, the
organizational structure and the individual responsibilities of key emergency workers, along with the
reporting procedures to the authorities concerned.

8.2.3. Atmospheric emissions

A significant emission reduction goal is flaring and venting which is the industry's most important source
of air emissions. Industry has performed several process optimization studies to find prospects for
pollution reductions. This has contributed to increased method growth Procedures for the monitoring,
design and maintenance. Technological developments in valve design have the ability to reduce fugitive
emissions while improved flare design has increased performance in combustion. The recovery of flare
gas and improved recovery of Natural Gas Liquids is the result of the development of new technologies.

As a consequence of the combustion processes related to power generation, numerous technical measures
have been launched to reduce emissions. In addition to improved turbine maintenance regimes more
powerful gas turbines have been built. Improvements in efficiency have also resulted from considerations
relating to gas turbine optimization. Other fuel-efficiency technologies include: steam injection; combined
cycle power generation; distribution of electricity (phase compensation); synchronization of the pump and
compressor; reuse of excess heat; synchronized, decentralized power generation; and implementation of
energy saving concepts.

Many developments introduced are focused towards increasing the performance of combustion: for
example, technology for dry low NO x combustion (DLN), selective catalytic reduction (SCR)
technology, and also water and steam injection, both aimed at reducing NO x emissions. Enhanced
injection and pre-combustion systems in diesel engines have the capability to minimize NO x emissions.

8.2.4. Produced water

Water is produced as the second crucial waste resulting from the oil production process. There is little
ability to remove the source because water is provided naturally with the oil. However, some progress has
been made in reducing the production of water. Water shut-off technologies such as diverting gels will be
an efficient means to minimize the volume of water that needs treatment. Where sufficient geological
formations are possible, reinjection of the formed water into the reservoir or into another formation may
provide a realistic and optimal solution.

New technologies for the treatment of generated water are evolving, especially in connection with the
removal of dispersed oil. These include: skimming / flotation of gas; static cyclones; mechanical
centrifugation; and gas stripping.

8.2.5. Solid waste

There are few ways to eliminate or reduce waste, since its volume also comes mainly from the extent or
duration of operation, or the exhaustion of the reservoir. Reduction measures occur mainly by procedure
and process structures. Improved solids control equipment and modern technologies will reduce the
volumes discharged into the atmosphere in the case of drilling fluid discharge. Developing more efficient
drill bits can reduce the need for chemical additions, while gravel packs and screens can reduce the
amount of solids / sludge generated. Improved measures, procedures and maintenance can help minimize
changes in the mud, changes in engine oil and use of solvents.

The search for chemicals with lower potential environmental impacts led to less toxic waste, such as mud
and additives which do not contain significant levels of bioavailability heavy metals, or poisonous
compounds. It also contributed to the production and utilization of mineral and synthetic products smooth
drilling.

It also examined the re-use, recycling and recovery of waste materials, including the use of drill cuttings
for brick and road bed material, the use of vent gas for fuel, and the use of produced or processed water as
wash water. Waste such as tank bottoms, emulsions, high carbohydrates and contaminated soil may be
used in construction of roads.

Many other new technologies are being utilized for the treatment of waste including: biological treatment
(land spreading, composting, tank-based reactors); thermal methods (thermal desorption and
detoxification); chemical methods (precipitation, extraction; neutralization); and the above mentioned
physical methods (gravity separation, filtration and centrifugation).
9. ISO and other certifications acquired by the company
9.1. What is ISO Certification?
ISO certification specifies that both standardization and quality control standards relate to a production
system, manufacturing operation, facility, or reporting method. ISO (International Standardization
Organization) is a voluntary, autonomous, non-governmental body that establishes standards to ensure the
consistency, protection and reliability of goods, services and systems.

Across other fields of business, ISO certifications exist, from carbon efficiency and corporate
responsibility to medical equipment, to waste conservation. To ensure continuity the ISO regulations are
in force. Each certification has different standards and criteria, and is numerically classified.

Overview of a complete ISO certification system

9.2. Why it is needed

• Emphasis management and personnel

• Get more new customers' income and business
• Boost the business and the price of goods
• Raising customer satisfaction with your products
 • Describe, appreciate and interact procedures in the business
• Build a positive atmosphere and a developed environment for workers
• Enhance the' efficiency processes
• Achieve international recognition of quality
• Improving performance, reducing pollution and saving money
• Meets the needs of the consumer xviii

9.3. Company certifications

ISO45001

ISO 45001 is the worldwide accepted standard for workplace safety, issued to safeguard occupants from
accidents and diseases related to work. ISO 45001 certification has been established to reduce every other
factor which could cause irreparable harm to employees and businesses.

ISO14001

ISO 14001 is the universal framework for environmental performance. ISO 14001 is the primary control
system norm regarding the design and repair specifications of environmental management systems. This
helps reduce aspects of the environment, reduce impacts and maintain product safety.

OHSAS18001

OHSAS 18001 is an International Standard for the Management of Occupational Health and Safety
Systems. It offers a mechanism for successful OH&S management covering all forms of risk control and
compliance with regulations. This discusses health and safety of workers rather than the particular safety
concerns involving items. xix

ODGCL acquired these certifications for the year 2015 and 2018 for various fields located in Punjab and
Sindh. The certifications were awarded on the basis of following activities:

• Extraction/Production & Processing of Raw Gas

• LPG Extraction
• Sulphur Recovery
• Condensate Oil Stabilization and Storage
• Gas Polishing through Amine Sweeting, Molecular Sieve Dehydration xx
10. Comparison of the quality with the production in the rest of the
world
10.1. Gasoline:

Parameter Current Limit Proposed Limit Commentary

150 ppm max 10 ppm max (all Align the current limit with that of EU, Japan and South
(all grades) 50 grades) Korea, all of which have implement the strict sulfur 10
ppm max ppm Sulphur limit was implemented in January 2009.
Sulfur (PULP) At this level, it is well known that lower Sulphur is
required to surely enhance emission controls on the
vehicles currently in use produced in markets like Pakistan
today. xxi

Align with the EU, which in 2005 introduced the limit of

35 vol per cent. It takes into account the simulation of
42% pool different aromatic content by EPEFE according to the
average over 6 driving cycle and the impact aromatics have on the
Aromatics months with a 35 vol% max
formation of deposits. Discussing aromatic reduction with
cap of 45% fuel producers and suppliers, as well as the automotive
industry in Pakistan, is therefore recommended.

Keep the limit but The authorities abroad e.g. in EU are currently setting this
add a footnote: level at 0 with an accompanying footnote "For the safety of
“No Intentional automotive catalyst systems, phosphorus containing
Phosphorous 0.0013 g/l max adding of compounds must not be used in unleaded petrol." The same
phosphorus to footnote may be proposed for Pakistan gasoline
unleaded gasoline requirements.
is allowed.”

If a lower sulfur standard is introduced by the government,

then it may be advisable to consider implementing the
Silver No Limit Class 1 max silver corrosion specification in ASTM D 4814 to protect
corrosion against reactive sulfur compounds that may corrode or
tarnish silver alloy fuel gage in-tank transmitters.
10.2. Diesel:
Parameter Current Limit Proposed Limit Commentary

This should be aligned with EU’s limit of 8 wt% percent.

Given that Pakistan has reduced sulfur content in diesel to
10 ppm, it is suggested that a feasibility to reduce the PAH
content from diesel to 8 wt. percent be discussed with the
refining industry. These measures could help to further
Polyaromatics 11 wt% max 8 wt% max reduce Pakistan's NOx and PM emissions.

PAH diesel fuel content is site-specific and will depend on

a various factors including feed quality and operating
conditions for the process. The adjustments that refineries
will have to make to reach reduced PAH limits would
depend on their starting point and the form and degree of
desulfurization of diesel used.

Pakistan's current limit is more severe than the EU's 0.3

wt. percent limit but it is still lower than Japan's (0.1 wt.
percent), South Korea and the US (0.15 wt. percent). It is
noted that Pakistan is currently using the "Generic Test
Method for Determining Carbon Residue (Micro
Carbon 10% 0.2 wt% 0.15 wt% max Method)" test method ASTM D 4530 which is distinct
residue max from that commonly used by the U.S., ASTM D 524.

Because carbon residue negatively affects engine deposits,

a further reduction to 0.15 wt. percent is proposed, but
only in case the issue is prevalent in Pakistan. That can
also mean a test method transfer to ASTM D 524. We
recommend further consultation with the industry.

This should also be aligned with EU.

Cetane 51.0 min

Number (containing
biodiesel) _

This is aligned with the EU, Japan and South Korea. No

further action is required.
Sulphur 10 ppm max

_
11. Conclusion
In this project we covered a number of aspects of the petroleum industry. We could not
encompass all the areas as this industry in huge in scale and a lot of processes and workings are way
beyond our scope. Still we studied important aspects and get a valuable about this industry and its
standards in Pakistan. On one hand we learned how the petroleum industry is affecting the environment
adversely but on the other hand we also came to know that the industry is taking various steps in order to
minimize the environmental effects. We also studied various product quality test which are implemented
in the industry to ensure that all the products comply with the set standards. Social, legal and import laws
were also covered in this report and they gave us a valuable insight into the working principles and code
of conduct of the industry.
12. References
i
https://ogdcl.com/vision-mission
ii
https://www.investopedia.com/terms/b/boardofdirectors.asp
iii
https://ogdcl.com/sites/default/files/publication/OGDCL-AR-2018.pdf
iv
https://www.scielo.br/scielo.php?script=sci_arttext&pid=S0104-66322012000200017
v
https://ogdcl.com/sites/default/files/hseq-files/1Preamble%20Rev6_Final-02.pdf
vi
https://conceptdraw.com/a2401c3/preview
vii
https://www.epa.gov/ghgreporting/ghgrp-and-oil-and-gas-industry
viii
http://emotor-extreme.cl/assets/astm_d975_specification_test.pdf
ix
https://www.astm.org/Standards/D130.htm
x
https://energyeducation.ca/encyclopedia/Fractional_distillation
xi
https://www.eia.gov/energyexplained/oil-and-petroleum-products/
xii
http://ogra.org.pk/oil-9
xiii
https://ogdcl.com/sites/default/files/publication/Annual-Report-201720171002153148931_0.pdf
xiv
http://www.emergingpakistan.gov.pk/wp-content/uploads/2017/11/Import-Policy-Order.pdf
xv
https://www.academia.edu/10973677/Enviroment_oil_production
xvi
https://cfpub.epa.gov/ncer_abstracts/index.cfm/fuseaction/display.files/fileID/14522
xvii
https://www.eolss.net/Sample-Chapters/C08/E6-185-18.pdf
xviii
https://www.meadmetals.com/blog/what-exactly-is-iso-certified-and-what-does-it-mean
xix
https://www.nqa.com/en-pk/certification/standards
xx
https://ogdcl.com/hse-awards-certifications
xxi
https://www.environment.gov.au/system/files/resources/f83ff2dc-87a7-4cf9-ab24-
6c25f2713f9e/files/international-feul-quality-standards.pdf