The Pakistan Credit Rating Agency Limited
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Muhammad Harris Ghaffar

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PACRA Assigns Initial Entity Ratings to Orient Petroleum Inc. (Pakistan Branch)

Rating Type Entity
(22-Dec-20 )
Action Initial
Long Term A-
Short Term A2
Outlook Stable
Rating Watch -

Orient Petroleum Inc. (Pakistan Branch) is engaged in upstream Oil and Gas business in Pakistan, it includes exploration, development and production of oil and natural gas reserves. Currently, OPI has six production leases which include Ratana, Dhurnal, Bhangali, Sinjhoro, Mehar & Sofiya and seven exploration licenses nalmely Sakhi Sarwar, Marwat, Harani South, Saruna, Kohlu, Sinjhoro & Mehar. Orient Petroleum Inc. (OPI) is part of the group which includes Zaver Petroleum Corporation (Pvt) Limited (Zaver “ZPCL”) and Orient Petroleum Pty Ltd. (OPPL). The group is an established oil and gas business unit in Pakistan, with a portfolio of 9 Exploration Licenses and 8 Development and Production Leases. OPI’s management is pursuing an expansion strategy as it aims to make additions to its revenue stream, to support the bottom-line profit. OPI has 2P recoverable reserves of 31 MMBOE and net upside recoverable volume of 27 MMBOE from its production assets and 634 MMBOE resource potential from its exploratory assets. The work program to enhance production volumes in the upcoming years will be supported through a mix of in-house financing and debt. The strength of the entity lies in risk adjusted recoverable reserves both from its production and development assets and exploration assets. With increased volume, the profitability will improve as the synergies and efficiencies will take effect. As a consequence, incremental cash flows will help the leveraged balance sheet, while augmenting the company’s ability to meet its obligations. The financial discipline has been good and would be pivotal to future fiscal management.
The ratings are dependent on sustained relative positioning of the company in oil & gas industry. Volatility in topline and profitability remains key areas for considerations. Financial discipline is considered core to the ratings, with enduring emphasis on maintaining relevant coverages.

About the Entity
Orient Petroleum Inc. is incorporated in Cayman Islands with limited liability and is operating in Pakistan through its Pakistan branch office. Occidental of Pakistan Inc. a USA based company has been functioning in Pakistan since 1979. In 1995 it was acquired by Hashoo group and was renamed to Orient Petroleum Inc (OPI). Ultimate beneficial ownership lies with Mr. Sadruddin Hashwani, a renowned Pakistani businessman.
The Board of Directors of OPI comprises of four members. They are supported by Technical Advisory Committee, consisting of well-established names in the industry. The management team is headed by Mr. Kamran Ahmed as Chief Executive Officer who has over 30 years of experience in investment banking, oil & gas upstream and downstream industry including working with Shell Pakistan and the Islamic Investment Bank Ltd. He is assisted by competent team of industry professionals.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.