The Managing Director of Pakistan State Oil has long been a coveted position many strive for. The state-owned PSO has undergone many transformations since its inception in 1974 and has come a long way ever since, with numerous people at its helm responsible for bringing it to a level of success that Pakistan can be proud of. The corporate re-branding made a great impact in the late 1990s, when PSO’s image was revamped and the quality of service enhanced to international standards. PSO has the largest marketing and distribution network of POL products in the country with 3,612 outlets.
PSO’s new Managing Director, Irfan Qureshi, comes with a wealth of experience. Having had over three decades of experience in the oil sector, mainly with the multinational Chevron, Irfan is set to infuse PSO with private sector dynamism. In this candid and exclusive interview with Blue Chip, Irfan Qureshi speaks about his plans for PSO and his views on the oil sector.
You have acquired great experience in the energy sector, particularly during your time with Chevron. What are your plans for PSO, particularly in light of the current challenges the energy industry faces?
Irfan Qureshi: “I think we’re doing very well. I met the Minister of Water and Power and he was happy with the supply situation of fuel oil and, if need be, we will be pumping in more but that leads to our circular debt; the money that these companies (PEPCO companies and IPPs such as Hubco, Kapco, etc.) owe us. They cleared half of our bills about two weeks back but we expect more clearance by June 30. By the end of the fiscal year, we should look better.
Going forward, it’s an energy issue. We are the suppliers of fuel oil so we are ensuring supplies; we are focusing on better planning and better logistical support — that’s the support we can give to the government. Obviously, the cash flows are badly affected. We have got huge borrowings from the bank overdraft and that’s affecting the bottom line.
I would like to turn this company from a marketing distribution company of petroleum products to an integrated energy giant. With a couple of things I’ve got up my sleeve that I want to put into practice, it should do much better than what I think. It’s a sleeping giant, there’s no doubt about it. This organisation is massive, it has a very strong infrastructure in place and all that it needs is some tweaking and finishing touches. Put it on the right path and get going. It should be doing well for the next fiscal year.”
Given your vast experience in the energy sector, would you still describe energy as a growth engine for Pakistan, and why?
IQ: “It is still the growth engine. You see, what we are lacking or the planning that went in the past, we’re very heavily import-dependent. We haven’t really exploited our natural resources. We are a gas-rich country and there are pockets of oil also, especially offshore; I’ve been very confident for the last 20 years that we’ve got oil offshore. The current advisor has very rightly pinpointed in that direction as to where we could go, and we have BP and ENI doing exploration offshore. But, as a gas-rich country, we missed out on opportunities. The new petroleum exploration policy is in the right direction; it gives a fair price to the producer and has some social responsibility added on to it. The only thing that’s holding things back is our security situation, otherwise I can tell you exploration companies would have made a bee-line for this country.
Geographically, if you look at it, coming from the top, it’s a uranium-rich area, according to some seismic reports. When you talk uranium-rich, you talk of gold deposits. Then, looking at the terrain right across the border, you’ve got Central Asian states where they’re producing oil. If you look at the terrain, at the sediment that’s flowing down, you have gas and oil in the northern part of Pakistan. Then, you come down to the Punjab area and just outside Rawalpindi, there are these small pockets. Go down to Sindh: it’s rich in coal. Balochistan: we know it’s a gas-rich place.”
In Balochistan, we have copper as well…
IQ: “They’ve spent $600 million on that project. There is conflicting information floating around: one school of thought says there are huge copper deposits, the other says no, there aren’t. But we are rich in coal and they should have exploited that on a war footing about 5-6 years back. Look at South Africa. Reports on the quantity of South African coal and our coal are about the same, maybe a little different. South Africa produces 80% of their electricity from coal, and what they’ve done is made some smart moves about desulphurising the coal, which needs a water body, like a lake, around it and we don’t have that. But, had they done this 7-8 years back, I’m sure energy generation from coal would have taken place by now. Even now, if we do it on a war footing we can get there. We have so much coal: we have the fourth largest reserves of coal in the world; about 187 billion tonnes; which is not a small amount. We’ve got alternate energy resources, for example, we can go into geo-thermal production. We have 23 areas identified for geo-therma. I don’t know who’s taking it forward or what’s happening on that front as I don’t have the alternate energy scenario in my mind, but all this experience that I’ve gained and knowledge about the energy industry, I want to give back to this country. This is why I left the private sector to get into the public sector. It’s a huge challenge.
Is there a skills deficit in the country?
IQ: “At the moment, yes, it is there. In public sector companies, not much attention has been given to techniques, training, skill development, etc. There needs to be more cross communication and more integration. I have to sort out a few things before this looks like a real international quality standards organisation, but it will get better.”
You spoke a bit on how coal should be exploited and developed on a war footing. What other recommendations would you make with regard to the regulatory framework governing the energy sector?
IQ: “Look, our exploration policy is probably one of the best in the region. It’s very liberal. It’s only the security issue that holds people back. Otherwise, I am sure that had we had this kind of a petroleum policy in the 1960s or 70s or 80s, when the situation was normal, there would have been a bee-line of companies exploiting resources in this country. I have been maintaining that in the last 20 years, even at Chevron, I used to keep on telling them, this is a mineral-rich country. That’s it. We need systems improved in this country and we need some honest nationalist feeling and effort in that direction, there’s no stopping.”
What about initiatives, like the IPI gas pipeline, that are coming up…
IQ: “Yes, I spoke to the advisor about this initiative after the announcement was made and he was of the opinion that had we done this five years ago by agreeing to the price the Iranians were offering then, we would have been in a better position, because the price keeps on rising. Do the deal now, lock them in now, so that going forward, you lock them in at this price and it stays that way for a while, and then, use this incoming energy for the power sector. Free the domestic gas from the power sector and give it to the industrial consumer so that we bring in industrial production. That would lead to lowering of import of fuel oil, which is getting scarce in the Middle East, but that’s the nearest resource we can get to and the costs eat away at our foreign exchange in a very heavy way.”
We lack that foresight then…
IQ: “We haven’t planned it that way but things are looking a bit better now and I hope we implement what we’re looking at. It’s a question of implementation. We always have good policies but lack implementation. We hope this time things are going in the right direction.”
You graduated from IBA. What drew you to a career in multinationals, particularly the energy sector?
IQ: “Immediately after the 1977 elections, IBA had shut down because there were riots. It was closed for three months, I remember. There was an ad in the newspaper for a Sales Rep job at Caltex and I just applied for it out of fun. I had not graduated at that point, I was at the halfway mark in my third semester of BBA. I applied, got called for an interview, got selected – never expected it to happen! The first day I was there, there was another chap with me, the two of us were sitting there, and I went off to sleep on the chair I was sitting on! The then-AGM was passing by and said, ‘hey, arrange a cot for this guy!’ It was pretty embarrassing. The next day, I received orders that I had to be at a gas station for five days from 8am-5pm, filling cars and being a cashier. I think those five days taught me the tricks of the trade and what all these dealers do. So, when I came back to the office, I was smarter than a lot of the others over there. Then, I came to the head office, did the rounds to various departments and became Zone Manager one year later.
I also carried on with my classes in the evenings. Gradually, I did my MBA. During the last years, I thought I should give back to my institute a bit with my experience and practical knowledge. So, immediately after graduating, I started teaching at IBA in the evenings. I taught for two years.
I got married in 1982. Two weeks later, I got a job in Exxon fertiliser. I had had a row with my boss at Caltex and had started looking for a job. My honeymoon was in Faisalabad because I was posted there! That gave me a rural insight. It was fertiliser; it was tough; it was an over-supplied market; pricing was difficult; no credit; etc. I used to drive about 400 kilometres almost every day. Tough times, but I enjoyed it. When it was Rabi and Kharif season, there would be these lean periods and I would go to the rural areas and watch people buy. Observe their buying habits and make notes.
After that, I got transferred to Karachi and I was being transferred out again to interior Sindh. Those were riot days so I quit. After that, I thought I don’t want to do a job, I’ll start up my own business. So, I went into real estate. I wasn’t experienced in hanky panky, didn’t know the tricks of the trade but plunged into it and lost everything. That was 1987-88. So, I went back to Caltex asking them to give me a gas station to run. I thought I’d enjoy it since I had the experience. Mr. Arshad Nasir was the Marketing Manager at that time. They all knew me since I’d worked there and left a good mark with them. The next day, he took me inside and announced that I would be joining them. I was looking at his face because I had gone in there for a gas station, not a job! I joined Caltex as Marketing Supervisor. I wanted to shift out of Karachi, so I got transferred to Islamabad on a 3-year posting. They asked me to come back to Karachi after one year and I said nothing doing. At that time cell phone companies were coming up, one of my friends was looking for some office space and had asked me for help. That was in 1990. I asked him if he was also looking for people. That was the second time left Caltex. I started off in telecoms then and had a very successful stint. I was moved to Maldives when Cable & Wireless was pulling out. After two weeks, I came back from the Maldives because I couldn’t see myself working there. I ended up in Caltex again! I’m the only one in Caltex’s history who’s gone out and come back three times! Then it became Chevron and I carried on.
I don’t know how I landed here but it just happened so fast. The Prime Minister was very clear about this, saying there needs to be good governance, no wrongdoings and he wants the PSO name to flourish. He wanted to hear what I have in mind, so we discussed that, and I’m glad I’ve got a 100% backing from him. Similarly, the advisor is also forward looking. He’s in a hurry to have innovations and we’re working on that. PSO is doing a lot of work in biodiesel presently. We’re doing testing now but will soon be expanding and should have biodiesel out on the road quickly.”
What about CSR initiatives?
IQ: “We’ve got plenty. We have a huge budget, unfortunately, we have not been publicising our initiatives. PSO does a lot of charity work. We’ve got our own computer literacy centre in Badin, half of which we’re converting into a virtual university. We are supporting a lot of hospitals. We may probably be the biggest CSR providers at the moment, with the huge list of projects that we are working on.”
You’ve achieved immense career success. What do you think have been the factors that have attributed to your success?
IQ: “I’ve always believed in the principle Peter Drucker espoused some years back: doing things right and doing the right things, efficiently and effectively. My mind is always working, even on domestic issues at home, I’m thinking of the efficiency and the effectiveness. But professionally, I’ve always looked at these two things and, I think if you inculcate and imbibe that in your memory, you cannot go wrong. Your chances of success are much higher as compared to a setback. Even when doing pricing or things like that, when I’m thinking of a strategy or tactic, I bring these two things in my mind, are we doing things right and are we doing the right thing? When this offer for PSO MD came, I had cold feet for 5 days. I’ve taken it up as a challenge and I’m glad I’ve taken it. It is definitely a career break. All the 32 years of hard work, I can put it all together and make it a success. I’m getting a lot of support which is very nice. It’s taken me four weeks to understand the nuances of the organisation.”
With all the challenges facing the country and like you said, the instability impacting the industry so much, what keeps you motivated?
IQ: “Everybody needs fuel to go, whether they want to riot or they want to do business. Depending on cash availability or resource availability, we’ve had a crunch and we’ve seen the impact that has had. I’m focused on what I want to do, a bit cost-cutting here and there, improving profitability, etc. This company is going to grow, the opportunities are huge.”
What do you think are the essential ingredients to be an effective leader?
IQ: “I’ve always maintained that there is no substitute for hard work. Sharpen your analytical abilities and use every opportunity to be analytical. And, like I said, doing things right and doing the right things, with a little bit of luck. As a leader you’ve got to be a communicator, a goal setter and you need to have the vision. You need to be a visionary, set the goals, set the vision and explain it to everybody on board. Respect the individuals that work in the organisation which is absent all around. I’m trying to get down to the lowest level and talk to them. The first thing I did was talk to the divisional managers. Motivation, again, comes through communication, not monetary incentives all the time. The customer has to be respected. I have always said that the customer is the king and we are the king makers.
So, this is a test of all my learnings and all my abilities that I’m going to put to test here. The other thing I’m emphasisng on is that do not indulge in malpractice where you’re earning your bread from. Earning bread is something very honest that goes into your blood so do not pollute your blood with wrong things.
I’m trying to develop a culture which has an element of care. When the leader is showing care, you can get the best out of the rest. I’m a people’s man and rather than sit on the 9th floor where I’m alone and everybody’s watching my moves, I am now going to start walking the talk. After I get things rolling a little, I am going to give more time to people. Talk to them and motivate them. That should change the culture and the direction and make it more forward looking. In the next six months, I hope to make this organisation different.”