Oil & Gas Development Company of Pakistan Ltd. (OGDCL) is the prime oil and gas exploration and development company of Pakistan. Operational since 1961, the company was successful in exploring many new oil and gas reserves in the country and is continuously expanding its operations. It currently has a share of 22% of the total natural gas production and 48% of the total oil production of Pakistan.

Being an oil and gas company, it’s obvious that the company profits are always on the rise. The company reported a pretax profit of 22 billion PKR for the quarter ended March 31. Social Bridges has tried to take a sneak peek into the company’s CSR credentials to gauge the ratios of earnings and CSR spending. Similarly, we have also tried to see if the company is actually doing some good for the society?

The company puts its CSR strategy as unders:

The company endeavors to be a responsible corporate citizen of the E&P community. Being fully aware of its social obligations, it continues to proactively promote, develop and maintain medical, social and welfare facilities and schemes for the benefit of the local communities affected by its work and presence. These include employment opportunities for locals, construction of roads, setting up dispensaries and providing free first-aid and health care, establishing schools, granting fellowships and scholarships, supply of drinking water, donation for charitable causes and financial assistance for numerous projects to improve the quality of life of peoples and communities with which it interacts.

Charity begins at home and according to new CSR guidelines, a company should initiate CSR efforts first within its own scope of business. Rating on this scale, OGDCL has established health care facilities at its field stations. According to the company Web site, the company is also building a trauma center in District Ghotki, Sindh. Total spending on these facilities is 19 million Rupees excluding doctors, dispensaries and ambulances.

In the educational sector, the company has set up two technical training institutes in Quetta and Karak, NWFP. In these institutions, the students are being imparted with technical training related to oil and gas sector. OGDCL is also providing stipends to these students. A vocational training institute for girls has been established in Hyderabad as well.

OGDCL has joined hands with the World Bank for the “Pakistan Development Market Place 2006 (PDM-2006)” initiatives. This programme will support the creative and innovative initiatives to improve the lives of people with disabilities. OGDCL has donated US $ 10,000/- for the purpose.

According to a survey of Pakistan Center for Philanthropy (PCP), OGDCL doled out Rs. 643 million in donations during 2006 while its pretax profits were Rs. 65.91 billion; nearly one percent of the total earnings. Still the company was the apex philanthroper of that year. Major chunk of these donations went into the earthquake relief where the company spent nearly Rs. 200 million on rehabilitation efforts while Rs. 300 million were donated to the President’s Relief Fund.

During fiscal 2007, the company earned Rs. 61.06 billion while it gave Rs. 347 million in donations; 0.56% of the pretax earnings. The amounts seem quite magnanimous but it makes very little of the total profits. A sociall responsible company should ideally spend at least 5% of its pretax earnings on corporate philanthropy. There are some companies in Pakistan, according to PCP surveys, whose CSR spending makes up to 10% of their total earnings and mind you they don’t earn in billions like OGDCL.

It’s true that the company is following the first guideline of CSR i.e. to give back to the community and the industry it works in, but the second and most important aspect of any corporation with big earnings is to get into the bigger CSR picture. OGDCL has sadly failed to transform itself into a major corporate philanthroper. It can easily shelve out hundreds of millions of Rupees for a national level scheme in the education and health sector. But it hasn’t.

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