oil and gas india report (part 2) 2011
DESCRIPTION
Written after exclusive interviews with India's decision makers from NOCs and multinational E&P companies, legislators, financial institutions, EPCs and service companies, this is a unique resource for those looking beyond figures.TRANSCRIPT
IndiaEnergy reportDecember 2011
CarGail_OGFJ_1112 1 11/8/11 4:14 PM
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•India Pt.2
In its search to solve the question of India’s energy security, the Indian state government has been pushing to promote exploration activities in the country, and efforts of both public and private sector enterprises have recently been concentrating on the offshore exploration. With shallow
water expertise steady in place, India’s shores are witnessing a new round of development as deep-water explorations attract high levels of both domestic and foreign engineering and manufacturing.
Nonetheless, the dominance of state-owned players, strong price awareness, and modest foreign investment might throw grit in the machine of India’s offshore oil and gas sector.
Focus Reports presents you with an insight look from Mumbai, India’s offshore epicenter.
The Silent Revolution
Project Director: Federica Torgneur. Editorial Coordinator: Nicolas Carayon. Project Assistants: Mathilde Paquet & Fleur Richard. Editorial Con-tributor: Herbert Mosmuller. Report Publisher: Ines Nandin. For exclusive interviews and more info, please log onto energy.focusreports.net or write to [email protected]
Kedarnath jack-up rig, drilling depth 20,000 feet, courtesy of Great Offshore Limited
www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 3
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4 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
New Horizons OffshoreThe story of India’s offshore started with the discovery of the
Bombay High oil!eld 160 kilometers off the coast of Mumbai. “The
Oil and Gas (O&G) discovery in Bombay High took the country
by surprise,” explained Satpal Singh, managing director and
CEO of Dolphin Offshore, one of the !rst Indian offshore support
companies. “There was no expectation that India had offshore oil
resources. We had historic !ndings in Assam and Gujarat, which
had been found during the days of the British presence in India.
The entire production was oil - hardly any gas was restricted to that
source. There was no development of O&G technology; there was
no trading institution over here, although after a period of time,
Oil & Natural Gas Corporation (ONGC) started to develop certain
institutions.”
“It actually all started with a lot of foreign companies, consider-
ing there was no Indian company that had suf!cient expertise,”
Amit Biswas, CEO of Ambico, explained the initial development
of India’s offshore industry. Biswas’ company is a service bound
offshore agency with Joint Ventures (JV) with Malaysian offshore
engineer IEV, British Found Ocean and a partnership with the Aus-
tralian offshore project contractor Tamboritha. “Over the last !fteen
years, a lot of Indian companies have come in, for exploration and
production (E&P) of offshore oil and gas,” Biswas continued.
“The crews of the vessels, along with the companies mastering
the supply vessels, were foreigners,” Biswas continues. “It took us
some time to train local people and qualify them (…) My partner
was, in fact, the !rst ever Indian master to handle an offshore ves-
sel. Slowly, Indian companies came in. Now we see some JV or full-
"edged Indian companies taking lump sum turnkey jobs. Before,
only foreign companies were doing it, and Indian companies were
providing a bit of support.”
“The country’s offshore sector”, said Singh, “possesses such
levels of homegrown expertise nowadays that it could do without
foreign expertise. The growth and development of the Bombay
High !eld provided tremendous opportunities for Indian companies
to start new ventures and over the next 2 decades the country grew
towards self reliance in being able to meet the requirements of the
Oil & Gas industry.”
Beyond Bombay HighWhile the output of the Bombay High !eld run by state-owned
ONGC decreased from a 20 million ton peak in 1989 to 9 million
tons now, India’s offshore industry received a next boost in 2002,
when Reliance Industries, India’s largest private player in the petro-
leum sector, discovered the biggest natural gas reserves in India.
This was in the D6 block in Krishna Godavari (KG) basin, 37 miles
off the Indian east coast in the Bay of Bengal. The !eld has proven
plus probable reserves of 11.3 Tcf. Similar to what happened in the
Bombay High !eld, the development of the operations at the east
coast has seen India’s domestic industry, with the support of foreign
companies, working hard to close the knowledge gap .
Reliance Industries’ operations in the KG basin were quickly
recognized as India’s most important offshore activity and even one
of the most important in the world; the !eld was the world’s largest
gas discovery in 2001. Indeed, as P.M.S. Prasad, Reliance Industries’
executive director, told Focus Reports, “our drilling partner, Trans-
ocean, says that our operations at a water depth of 10,194 feet are
the deepest that have ever been done [worldwide]”; this project
has also seen the participation of the Houston-based oil!eld service
company, Oceaneering, with an all Indian team.
“We had to start from scratch, so having created an organiza-
tion, trained a lot of people and acquired some competencies and
infrastructure, we are now looking at opportunities outside India,”
continues Prasad. “We have a very good safety, exploration, devel-
opment and project management record, and now we are looking
to capitalize on these competencies outside the country.”
Oil demand & supply
Source: University of Petroleum & Energy Studies (UPES), IORS 2011
400350300250200150100500
Demand
2001-02
99.7
32.03
2002-03
114.3
33.05
2005-06
140
33.98
2011-12
199.6
33.47
2024-25
376.5
61.4Supply
InMMT
CarBha_OGFJ_1112 1 11/9/11 2:59 PM
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Full of achievements, including
125 deepwater wells drilled and a
strong track record, Reliance Indus-
tries signed another milestone in its
international strategy by signing a
joint venture with BP last Febru-
ary through which the American
supermajor committed to invest 7.2
billion USD (30 per cent stake) in 21
of Reliance’s oil and gas blocks.
In a press conference following the signing of the deal, Reliance
Industries chairman Mukesh Ambani said that “These guys are the
best (in exploration). If you want to climb the Mount Everest, make
sure you have the best Sherpa with you.”
Reliance’s successful deal was followed last August by news
that ONGC was holding talks with international oil companies
already present in India including Shell, Eni and BG to sell stakes
in its deepwater wells off the country’s resource-rich eastern shore.
At the same time, ONGC has also been carrying out a Rs. 9,000
crore (approximately 2 billion USD) redevelopment investment to
increase oil and gas output of its Bombay High !eld.
Indeed: “In India we are endowed with around 138 billion
barrels of oil and oil equivalent, but most of them lie in frontier
locations/deep water and ultra deep water. In order to search for
these resources our country needs advanced technology,” explains
Ashley Jerome D'sa, CEO of Oil Field Instrumentations (OFI), a
company delivering mud logging services.
D’sa praises the New Exploration Licensing Policy (NELP) intro-
duced in the early 1990’s to further liberalize participation at E&P
tenders, as: “the general impact of such policies is the increasing
entry of foreign investment and private companies in the Indian
upstream market. Obviously, this has also given more opportuni-
ties for growth in the sector that we are in. We have been working
on almost every project; with ONGC for instance, we have been
working with them in all the assets and basins – onshore as well as
offshore. We have also been working with private and MNC’s like
Cairn, Reliance, GSPC, British Gas, Shell, Gazprom, NIKO, Hardy
Petroleum and many others. If the exploration industry continues to
grow we hope to see growth in OFI’s business as well.”
The growth should be supported by the upcoming Open Acre-
age Licensing Policies (OALP), which will replace the old NELP,
and could play an important role in bringing in the necessary
technologies.
“It will de!nitely attract further investment. Under the NELP,
Satpal Singh, managing director & CEO, Dolphin Offshore Enterprises
Amit Biswas, CEO, Ambico Ashley Jerome D'sa, CEO, Oil Field Instrumentation (OFI)
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www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 7
companies have to follow a !xed format and process and must
participate in the tenders. With the new Open Acreage Licensing
Policy, whether it happens in 2012 or 2013, there should be more
opportunities for new players to come in. This would also give easy
access of geological data to E&P operators,” hopes D’Sa.
As the government is working on more investor-friendly policies,
India is quickly becoming a strategic location for global players.
Parmjit Singh Nayyar, Oceaneering country manager India, is one of
those who clearly spots India as key for business: “Wherever there
is deep water, Oceaneering comes in,” he told Focus Reports.
“We have always gone for strategic locations, and in fact India is a
standalone location. The country has a lot of open future for oil and
gas and that is why India was selected. The country currently makes
a signi!cant contribution to the growth and Oceaneering is also
very keen on India for the future.”
The company can also provide a solution not only in deep
waters but even when it comes to shallow water. “Let’s say where
divers cannot go, we come in. We are the kind of company that can
support any type of operation. For any kind of dif!culty we come
up with a solution,” clari!es Nayyar.
“India is a strategic location to establish operations,” agrees
K.G. Remesh director of Swiber Offshore, a Singaporean com-
pany that controls a "eet of offshore support service vessels and
construction vessels, when asked what made his company come to
India.“We believe India to be one of the most dynamic and fastest
growing markets for offshore oil and gas activities, with a big and
CarDol_OGFJ_1112 1 11/8/11 4:55 PM
Kedarnath being towed by Great Offshore'sanchor handling tug supply vesselsCourtesy of Great Offshore
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8 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
growing demand for offshore marine support services in India. India
has a signi!cant pool of engineers and is a strategic location for
market expansion.”
Another deepwater specialist, Weatherford, has been active
in India since 1996, when it opened an of!ce in Mumbai. Olivier
Konig, country manager India of Weatherford Oil & Tools, sees
an important role for the deepwater sector in modernizing India’s
O&G industry. “Deep offshore operations require top class technol-
ogies,” Konig said. “This sector has been driving the trend for India
to accept, bring in and adopt new technologies, being pushed by
service companies as well, consider-
ing we have the knowledge, the
understanding and the experience
in this sector.
“Weatherford has pioneered the
drilling of deep hot wells on the
east coast of India, Konig contin-
ued. “These are some of the tough-
est deepwater environments in
which we have deployed our tools
BPCL: Moving upstream and offshore For the full interview with R.K. Singh, chairman and managing director of Bharat Petroleum Corporation (BPCL), log onto energy.focusreports.net
FR: Since you became chairman & managing director in December 2010, what have been your biggest priorities?
R.K. Singh: The !rst priority was deciding where we want the company to be in !ve years from now. Having decided on our aspirations and vision for Bharat Petroleum, we needed to work out how to attain them. (…)
Predominantly, BPCL is a downstream company dealing with re!ning and marketing of petroleum products, but we have also looked at other available opportunities and have entered the upstream sector and have been fortunate to make some discoveries along with other consor-tium members. This has certainly encouraged us and we now want to consolidate this upstream business and work towards monetization of the discoveries.
R.K.Singh, chairman & managingdirector, BPCL
FR: All your moves upstream have been in quite high-risk ventures so far – deepwater in Brazil, a wildcat well in Mozam-bique and shale gas in Australia. These are all areas where even experienced players are quite wary about entering. What was the rationale behind such moves?
R.K. Singh: Two things played in our mind. As far as Bra-zil is concerned for example, we bought assets owned by Encana Canada. A lot of data was available for us, and we knew that the prospectivity was very good (…).
The second aspect of this is that Brazil is now having a lot of discoveries in deep water. It is a big success story. The operator of the blocks is Anardarko, a very estab-lished player, and Petrobras also has a stake. They are known to be experts in deep water drilling, and have all the necessary rigs and the equipment that are required for deepwater drilling. So the operator’s image, their capabilities and data meant that we took the decision that this would be the place to grow our upstream busi-ness. I hope that by 2015, oil will start "owing in Brazil for BPCL. Despite the high risk, I believe that the upstream
business is more pro!table.
Parmjit Singh Nayyar, country manag-er - India, Oceaneering International
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in and have been immensely suc-
cessful in helping clients meet their
exploration objectives. It has been
more than 5 years since we started
out on the east coast and are cur-
rently involved in the development
drilling in that area.”
Going deeper: the next step for the shipping industry?The deepwater developments are also attracting the Indian ship-
ping industry. As the sector is going through a global downturn,
shipping companies have found a new potential area in servicing
the booming offshore industry.
“Offshore today means going deeper and deeper into the sea,
and because of the technological improvement, the maritime com-
ponent of the offshore segment is increasing. Obviously if you go
deeper, you require more engage-
ment of the maritime assets,”
explains S. Hajara, chairman and
managing director of the Shipping
Corporation of India (SCI), the
largest and most diversi!ed public
sector undertaking (PSU) under the
ministry of shipping. “Therefore I
believe offshore has a huge poten-
tial and we are trying to increase
our presence there, but we have not been able to break into the
higher segment of rig platforms as of yet. That is very much in our
minds and we have had discussions with a couple of players but
nothing concrete has happened yet,” he continued.
The support industry as well is looking at the offshore industry
with more interest. Bharati Shipyard for instance, one of India’s
leading private shipyards, is targeting the deepwater offshore
sector. “There is a new trend in the industry where companies
Olivier Konig, country manager India, Weatherford Oil & Tools
S. Hajara, chairman and managing di-rector, Shipping Corporation of India
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10 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
require vessels with high speci!ca-
tions, especially for deeper water
interventions,” P.C. Kapoor, the
company’s managing director, said.
“For instance, operations on the
east coast of India and in Brazil
require larger vessels. Bharati
Shipyard has decided to go on and
build these vessels. We see a lot of
growth opportunities in this area,
both in the east coast of India and
in Brazil.”
Bharati Shipyard acquired an integrated offshore oil!eld services
provider, Great Offshore, in June 2010 from the family-owned
Great Eastern Shipping Company, capitalizing on the synergies
existing between the two companies. Kapoor continued. “Bharati
has been constructing ships for Great Eastern as well as for Great
Offshore for the last twenty years. A major portion of Great
Offshore’s "eet that is currently
operating has been constructed by
us. There were a lot of interactions
between the two companies before
the acquisition, even before we had
a single share.”
Since the acquisition, Bharati has
been actively growing and renew-
ing Great Offshore’s "eet, phasing
out the older ships to adapt it to
deep water operations. Kapoor explains that, “since we took over,
we have already purchased six vessels for !ve or six years, available
in very attractive places. This purchase brings the total size of our
"eet to 47 vessels, out of which 10 or 12 are to be phased out. We
will double the "eet in the next !ve years, not in terms of number
of vessels, but in terms of operating capacity.”
Christopher Phillips, director of Seatech, a ship broker and char-
terer founded in 2008, has been making good use of the oppor-
tunities generated by the development of the offshore industry,
especially by the discovery in the KG-D6 basin. “There is a lot of
potential in the shipping industry in India, especially on the east
coast belt which is really rich in minerals,” said Phillips. “In the light
of a few power companies increasing their activities in the region,
there are a lot of project movements on this belt. Even Mumbai
has specialized in project cargoes. Simultaneously, in the West,
the states - especially Gujarat - have converted a lot of industrial
growth over the last decade.”
Given that India imports two thirds of its energy needs and
exports about 40% of its re!ning products, additional opportunities
arise for the shipping industry to support the oil and gas sector.
This is the approach that has been taken also by Seatech: as “we
are a young establishment; we have to be aggressive with our
approach and look into every opportunity that comes our way,”
explains Phillips.
Foreign investment in restraintsWhile India’s O&G sector has received a good deal of foreign
investment in past years, many feel it’s not close to what it should
CarSea_OGFJ_1112 1 11/8/11 5:16 PM
P.C. Kapoor, managing director, Bharati Shipyard Limited, and execu-tive director, Great Offshore Limited
Christopher Phillips, director, Seatech
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www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 11
be yet. India’s regulatory environment and
the high complexity of the market are often
mentioned as holding off foreign players. In
fact, major international companies are said
to be waiting for the country to be ‘mature
enough’.
Aboveground, India’s reputation is
good due to its stable democracy, clear
regulations and policies, especially in
the upstream sector, and widely praised
production sharing contract (PSC) systems
in place.
Gas Thirsty!
In looking to secure its ever-growing hunger for energy, Indian demand for LNG is growing.
Domestically produced gas saw a lower output, making imported gas more crucial. Growth projections for natural gas demand are 4.7 percent annually, which would mean it would reach about 600 million standard cubic meters per day (mscmd) by 2030.
GAIL, India’s principal gas trans-mission and marketing company, is preparing its Dabhol, Hazira and Kochi LNG terminals for 100-120 mscmd of R-LNG, and is establishing an LNG plant in Maharashtra from where it is planning to progressively bring more LNG to India.
Already, under a memorandum signed last June, Gazprom agreed to supply 7.5 million tons of LNG over 25 years to Gujarat State Petroleum Company, Petronet LNG Limited, and GAIL. In this !scal year, eight LNG deliveries have been sourced, and the company expects another !ve or six in the remainder of the year. In the next couple of years, its spot gas portfolio will increase four- to !ve-fold.
B.C. Tripathi chairman and managing director of GAIL told Focus Reports about current and future plans in LNG. He states, “The company has already sourced half a million tons of LNG, for the !rst time doing it indepen-dently, and we are now discussing various other major supply projects. GAIL intends to import !ve million tons of LNG in the next two to three years. That is why we are gearing up GAIL’s infrastructure so the receiving terminals get ready and the pipeline infrastructure is in place in due time.
B.C. Tripathi, chairman & managing director, GAIL
“GAIL is looking not only to grow in the domestic market but internationally. Hence, we would like to have partner-ships with companies that are ready to work with us in the international arena, to source more LNG, for instance. It could be either an upstream investment for producing or near-producing blocks, or it could be LNG and petrochemical plants. What GAIL can bring in is its unique 25 years of experi-ence and expertise in one of the world’s most challeng-
ing, but most promising, energy markets,” Tripathi concluded.
Since the establishment of GAIL in 1984 the Indian oil and gas industry has experienced major trans-formations, especially related to the market liberalization and modernization of the country’s major PSU’s. How has GAIL adapted to this new environment and helped shape it?
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12 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
The NELP has been a very successful policy in opening up
the industry for private players and liberalizing the market. A.K.
Arora, director general of Petrofed, one of India’s top oil and gas
representatives, emphasizes the changes NELP brought. “You have
to understand that the rate of participation of private players has
considerably increased since the market liberalization took place.
However, in an evolutionary process you have to start somewhere.
The perceived deviations and imperfections are being taken care
of in a gradual and democratic process, unlike other regimes where
the state requiring something to be done acts differently adopting
varying processes.”
“What no one disagrees with is that the system in India has
evolved towards a market-friendly and level-playing !eld environ-
ment where private players are enjoying great scope for action.
One may criticize the speed of these changes, but can’t deny their
existence.”
However, India is still lagging behind in exploring its offshore,
with underground risks keeping international players at bay in the
upstream industry. The country has the reputation to be unex-
plored, and, although it’s the government’s ardent wish to get
exploration going in as many basins as possible, some say the
country has failed to do so suf!ciently, with available data lacking,
making investors hesitant to deploy activity.
The aforementioned BP deal and the ONGC negotiations with
Shell, Eni and BG to sell stakes in its deepwater developments
on the country’s eastern shore are promising signs for foreign
companies looking to enter India. Nonetheless, there are still many
administrative hurdles and questions on the risk/bene!ts ratio.
One aspect many believe should
change, as expressed by major
international energy companies
looking to conduct exploration
activities in India, are restrictions
imposed by the country's defense
and space authorities on explora-
tion activities.
Just over half a year after it
signed the biggest foreign direct
investment in India’s history, BP, in a joint letter with BHP to the
Indian petroleum ministry, expressed its concerns over these restric-
tions as they would block medium and long-term commitments.
“This is also affecting the con!dence of international companies
in undertaking high-cost, high-risk frontier exploration in offshore
India,” the letter read.
A world nucleus for the service industry"While in the upstream segment there is ample room for improve-
ment on the regulatory front, India has been very successful in
attracting international players supporting the oil and gas industry
through new technologies, solutions and equipment. Sajiv Nath,
managing director of Swiss-based instrumentation and process
automation company Endress+Hauser, said “We could have gone
anywhere in Asia, but we went to India because this is where the
bene!t to risk ratio is the best. India is rationally considered the
main investment destination for the group. India is a sustainable
market which also provides IPR (Intellectual Property Rights) to
protect. Looking at the growth market in India, the bene!ts are far
higher than the risks,” he continued.
One of the main bene!ts is undoubtedly provided by the
quali!ed Indian workforce. “The Indian manpower is a young pool
of engineers with high communication skills (…),” Rabindranath
Burman, director of US manufacturer ITT Corporation, summa-
rized. “India is not only a manufacturing hub but also a talent
pool, speci!cally from the engineering side. ITT demands from its
engineers that they support global projects at the R&D level, while
also synergizing new strategies". And they are up for the task: “We Pipelines in Rajasthan, Courtesy of Cairn India
A. K. Arora, director general, PetroFed
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© 2
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CarWea_OGFJ_1112 1 11/8/11 4:13 PM
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14 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
have extensive training programs, a strong team of people, migrat-
ing from one part of the world to another, and we have the best of
both worlds.”
There are worries, however, that the demand for skilled labor in
India’s oil and gas sector might outstrip supply making it increas-
ingly dif!cult to attract and retain talent, which is critical in a fast
growth economy. “The working environment is very demanding
from a human resources perspective,” Shishir Joshipura, manag-
ing director of SKF, a global supplier of rolling bearings, seals,
mechatronics, services and lubrication systems said. “The rapid
growth will increase the demand for quali!ed resources, thus invit-
ing an increased focus on retention of talent. Innovation, energy
ef!ciency and reliability of operations while managing costs in an
ever improving way are some of the challenges all industries are
faced with,” which, according to Joshipura, could lead to nothing
less than “a war for talent.”
Is India ready to pay the price?Despite a very fast changing environment and the sector’s liberal-
Entering the Indian market
As the industry is booming, foreign companies are "ow-ing in to set a direct base in the country. But what is the best entry strategy in a country as wide and dispersed
as India, that counts so many hotspots for the oil and gas industry? We asked Hydratight, the boltied joint solutions specialist, that is currently setting up the Indian operations.
“The question is how to organise for ourselves the stron-gest possible base here. We need a better understanding of the needs of our local customers (…). The market here isn’t as formal and organised as in the US or in Europe, but we stick to our plan: develop a profound knowledge of the market and establish strong relationships with customers”, explains Alain Wald, EMEA area leader, when we met him in the occasion of the Offshore India and Unconventional Oil & Gas India confer-ence and exhibition in Mumbai.
Murali Narasimhan, country leader India, adds that, despite Bangalore being the hub for the Indian operations, “no single place can realistically handle the entire country’s needs, wher-ever it is based. Bangalore will be the hub, but we intend to develop satellite bases across the country. Our initial focus will be the western part of India, which is where the key O&G play-ers are located. Progressively, we will work on developing the
northern and eastern sides of the market. There is also a lot of development taking place at Kakinada in the south.”
Hydratight sets international standards in joint integrity on a
global scale. Operating from 35 locations, Hydratight offers
fast, accurate solutions to your bolting and machining needs.
Using state-of-the-art equipment, our qualified on-site
technicians offer monitoring, bolting, machining and training
services to maximize safety, reduce plant down-time and
extend facility life.
To find out more visit
www.hydratight.comor email [email protected]
ENGINEERING MAINTENANCE TRAINING SERVICE
CarHyd_OGFJ_1112 1 11/8/11 4:58 PM
Murali Narasimhan, country leader India, and Alain Wald, EMEA business leader, Hydratight
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www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 15
ization, India’s PSUs are dominat-
ing the industry both upstream
and downstream. Given their size,
entering into agreements with them
is a must for any company wanting
to be present in the Indian oil and
gas industry. Contracts are often
long-term and, given the state
backing of these companies, safe.
In their attitude to new tech-
nologies, there are major differences between India’s National Oil
Companies (NOCs) and International Oil Companies (IOCs), Olivier
Konig, country manager India of Weatherford found. “NOCs and
IOCs in India have a very different approach to technologies. The
IOCs are very forthcoming and open to trying new technologies
while NOCs often have stringent procurement,” he continues.
“Besides, with NOCs, there is not enough "exibility to allow the
addition of new products and
services, when these are not part of
the scope of work that was decided
initially, even if they are brilliant
products that could meet their
objectives and more.”
Indeed, the procurement system
is very strict, as the selection of
suppliers, either service companies
or equipment providers, is based
exclusively on price, what is called the L1, or lowest bid.
Clearly, this process has changed the landscape of the industry,
in"uencing not only the local industry but also the international
companies, which have been progressively reducing their prices
in order to secure contracts with the PSUs. As Dolphin Offshore’s
managing director and CEO Satpal Singh explains, “the worldwide
economic situation and more particularly the reduction in offshore
CarEnd_OGFJ_1112 1 11/8/11 4:16 PM
Shishir Joshipura, managing director and country manager, SKF India
Sajiv Nath, managing director, Endress + Hauser
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16 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
dollars a day. It has been very dif!cult for
Indian companies to pick up work.”
The same issue is faced by the equip-
ment suppliers. “The concept of L1 is
hurting the industry,” said Javed A Hawa,
managing director of Hawa Valves, speak-
ing on the valve industry. “There is an
evaluation done by engineers; however,
those engineers are not valve engineers.
They will look at any company and their
products against some parameters that
have been set by their management but
they do not have the in-depth knowledge
to understand what differentiates one valve company from the
next. In fact they are carrying out an evaluation, which is prior to
the bid opening, but that evaluation is skewed from the beginning.
The process is "awed.” In order not to compromise with the qual-
ity standards, the company decided to focus on the global market,
rather than the Indian one. “We realized that the values that we
were bringing to the investor in terms of HSE were better recog-
nized by the global end users in the hydrocarbon sector, rather
than the PSUs.”
However, for international companies that are setting their
foothold in India, PSUs remain the !rst target, and one of the chal-
lenges is increasing the acceptance of new technologies. “Given
the importance of the public sector within the Indian market, the
idea !rst needs to be sold to them,” said Sulzer’s India President
B. Balaji. “At the same time, as markets are developing, customers
also are willing to try new technologies. This has opened up doors
for us, as we are able to bring a lot of world class technology in
India through the Sulzer Chemtech channel.”
Luckily, interest in advanced technology is increasing and the
international players are capitalizing on these nascent opportuni-
ties. Endress+Hauser’s managing director Sajiv Nath has seen
landslide changes in the way in which the country deals with new
technology. “The market has predominantly consisted of PSUs but
has evolved over time. I still remember the phase during the 1980s,
when talking about new technologies and software was not well
CarHawa_OGFJ_1112 1 11/8/11 4:57 PM
Sulzer facilities, Pune
oil and gas development projects forced international companies
to come to India and bid competitively. They started to dump
prices to get work in India, just to keep their assets deployed. As
a consequence, in the last two years, the rates of construction
barges have gone down from 455,000 dollars a day to 175,000
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CarTem_OGFJ_1112 1 11/9/11 1:43 PMwww.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 17
accepted, he explained. Today it
is the innovative technical “geeks”
who drive the Indian market. In fact,
Indian technologies are more driven
by the end users than by EPCs.
Endress+Hauser has been success-
fully able to identify certain “geeks”
amongst these end users who have
been receptive to technological
change.”
This aspect has been con!rmed by Konig from Weatherford,
who is currently at his second stint in India. “Over the years the
country’s O&G business has evolved and the country is today much
more open to new technologies, which supports Weatherford’s
growth strategy,” he said. “The opening up of the market has been
supported by the entry of international companies There have been
several new private Indian companies that have secured blocks in
the latest NELP rounds”.
From price to quality: the Indian re-evolutionAs historically many of the local manufacturers have been focusing
on lower prices in order to guarantee an access to a very price-
conscious market, for many years the image of India as a cost killer
country impacted the reputation
of Indian manufactured products,
fairly or not.
“Up until 1990, there was not
much of a market scope for the
Indian industry, especially as far as
valves were concerned, Jagdish
Prajapati, managing director of
valve manufacturer Panam Engi-
neers recalls. “Indeed, the purchas-
ing mentality abroad was laden with a few prejudices in terms of
region, business ethics, etc. But once they came to the realization
that products from countries like India can be of high quality, they
began wanting to trade with us more.
While the situation has changed for the better and Indian prod-
ucts are sold on foreign markets, Indian companies still have a gap
to close,” Prajapati said. “There is still a little gap [between Indian
and international quality], as far the industry world is concerned.”
“The acceptance of Indian products is much more prominent
now as compared to 10 years ago”, admits Nath of Swiss-based
Endress+Hauser. To him the ability of Indian engineers to learn and
integrate new technologies has much to do with this success: “The
Indian workforce has tremendous technical skills. Thanks to the
B. Balaji, president, Sulzer IndiaJaved A. Hawa, managing director, Hawa Valves
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18 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
technical knowledge the employees have, they can now be trained
easily.”
The fact that Indian companies did overcome many of the
prejudices that haunted them earlier has been con!rmed also by
V.P. Ramachandran, secretary of the Process Plant and Machinery
Association India (PPMAI). “Ten years back, Indian engineering
companies used to go and visit ACHEMA [an international exhibi-
tion congress on Chemical Engineering, Environmental Protection
and Biotechnology, held yearly in Frankfurt, Germany] to under-
stand the latest foreign technologies, learn from them, and perhaps
buy them,” says Ramachandran. “The situation has now changed;
the technology transfer goes the other way around. Now, Indian
companies go there to sell their equipment and technology. They
are looking for buyers for the technologies they are able to manu-
facture from India.”
Overcoming the misconceptions, many Indian manufacturers
look abroad to sell their products. So does H.K. Sippy, chairman
and managing director of Tema India, whose company belongs to
a small group on the globe able to
manufacture high quality, high pres-
sure heat exchangers.
“Foreign operations are de!-
nitely a central focus, due to the oil
sands in South America, Canada,
and Russia. We are ready to com-
pete with players overseas,” Sippy
said. “We are concentrating on
our Screw Plug heat exchangers in
O&G, for which we have a patented
design. The idea is to increase our
global market share to at least
40%.” Tema is one of the Indian
companies that has been strongly
investing in high quality and latest
technology. As Sippy highlights,
“There are several companies
that work with heat exchangers,
although it is true that very few of
them have the design capabilities
that we possess. We have been
able to elevate the standards of our
company to its current standing.
Apart from that, there are com-
panies who have not been able to
bring to the fore the combination
of design and an intricate manu-
facturing process. They may be
!nancially stronger and larger as an
establishment, but technically, they have not been able to bring this
kind of engineering excellence.”
With equipment installed on the !ve continents, GEI Industrial
Systems, specializing in heat transfer technology, is another Indian
manufacturer that has found a way to bring Indian equipment to
international markets. “Almost every week, somebody visits us from
abroad to establish a JV or some kind of manufacturing arrange-
ment with GEI. Foreign visitors have a good opinion of Indian
CarPan_OGFJ_1112 1 11/9/11 1:23 PM
VP Ramachandran, secretary, PPMAI
H.K. Sippy, chairman and managing director, Tema India
Jagdish Prajapati, managing director, Panam Engineer
CarFur_OGFJ_1112 1 11/8/11 4:19 PM
www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 19
capabilities,” said
C.E. Fernandes,
chairman and
managing direc-
tor of GEI. “There
was a time when
Indian qual-
ity was neither
appreciated nor
accepted in most
countries; however, in the last decade or so a lot has changed.
There has been a shift in perception in recent years and many are
now con!dent of the quality and technology of Indian products,
which are at par with European vendors”, he continues.
With JVs in Oman, Brazil, Singapore, and plans to enter South
Africa, Fernandes has a word of advice on how the international
O&G industry should deal with companies like his. “The O&G
Panam Engineers manufacturing facility
community should look global and
accept companies which are com-
ing up aggressively to meet the
demand in these areas, especially
large multinationals such as Chev-
ron, Shell, ExxonMobil. They should
open up in such a way that compa-
nies from the developing countries,
like GEI, can get a good participa-
tion to join in their progress.”
Re!ning, the future of India?Even though India has been undoubtedly developing its offshore
sector, as well as a vibrant manufacturing industry, the most promis-
ing sector in the O&G industry still seems to be re!ning. India already
contributes to 4% of the world re!ning, with an installed capacity
of almost 200 million tons per annum in 2011, and showcase the
C.E. Fernandes, chairman & managing director, GEI Industrial Systems
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20 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
largest single-complex re!nery in the world, the Jamnagar complex
by Reliance Industries. Notwithstanding these impressive !gures, the
country is continuously adding new capacity and is expected to reach
300 million tons per annum by 2017.
Most of the state owned players are adding capacity. The PSU
Indian Oil has recently completed the expansion of its Panipat re!nery
to 300,000 barrels a day, from 240,000. State-owned BPCL, based
in Mumbai, with a re!ning capacity of 30 million tons per annum, in
addition to expanding capacity at
its Kochi re!nery, has commissioned
the Bina re!nery, which will have
a capacity of 120,000 barrels per
day with the potential to raise it to
300,000 barrels.
The other Mumbai-based state-
owned re!nery, HPCL, plans to
expand capacity of its Visakh Re!n-
ery by 9 million tons as well as a relo-
cation of the Mumbai re!nery, which currently re!nes 6.5 million tons,
to the west coast of India. The company furthermore commissioned
its !rst re!nery in the north of the country, in Bathinda in the state of
Punjab, through a joint venture with Mittal Energy. The HPCL Mittal
Energy Limited (HMEL) grass root re!nery will be commissioned by
March 2012 and is expected to produce 9 million tons per year.
The expansions in the country’s major re!neries have also allowed
the service industry to increase its capacities. Swiss manufacturer Sul-
zer for instance has been expanding its capacity in order to support
the boom in the re!nery industry. “In fact, Sulzer India has carried out
a signi!cant portion of the mega projects in re!neries in 2006 and
petrochemical in 2007 & 2008. Considering we expanded our plant’s
capacity in 2005 and 2006, so before the booming really started, the
timing was excellent. Successful execution of large projects has given
a lot of con!dence to our customer for future collaborations also”,
Sulzer’s president of Indian operations B. Balaji said.
The new projects have also created a shift in the structure of the
industry, as “there has been a shift from a PSU dominated market to
a number of private partnerships.
For instance, the biggest re!neries in
India are not PSUs but Reliance and
HMEL, which is a partnership with
the Mittal Group”, ITT’s managing
director Burman pointed out.
Indeed, these major expansion
projects have created a number of
opportunities for the service industry
and Burman believes that the extra
CarSul_OGFJ_1112 1 11/16/11 1:56 PM
Hydrocracker project, Haldia refinery, Courtesy of Punj LloydRabindranath Burman, director and country head, ITT Corporation India
A. Basheeruddin, managing director and co-founder, Furnace Fabrica
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www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 21
capacity in these re!neries “will de!nitely be a driving force
in both the top and the bottom line of the pro!t and losses
(P&L)” of the company.
Furnace Fabrica, an Indian EPC player with a strong focus
on the downstream, has been taking advantage of these
new projects as well. As managing director A. Basheeruddin
explained, “We successfully completed expansion projects
for Hindustan Petroleum Corporation Limited (HPCL). Now
we are executing a sulphur recovery unit for the same client.
We expect to get a major chunk of the business from [the
expansion of the Bombay re!nery]. We completed the expansion plans of the Haldia re!nery
as well. In fact, we were the !rst company to build the second hydrogen reformer at the Indian
Oil Corporation re!nery, with a capacity of 94.62 mmkCal/hr”. Currently, the company is work-
ing on three acid coolers with anodic protection design for Indian Oil Corporation’s Paradip
re!nery. “Many companies will !nd it dif!cult to meet the stringent requirements,” Basheer-
uddin said on this last project. “There were only two bidders. One was from America and we
were the second. We beat them out on the price, which is often one of the main criteria in
India, considering it is a highly price-sensitive market.
“In addition to this, we are one of the few international companies with experience in
dismantling re!neries for reconstruction, not for scrapping. We are able to dismantle, rebuild,
and also expand re!neries. Our capacity is unique in that respect”, continues Basheeruddin.
G. Sathiamoorthy, managing director of Tecnimont ICB (TICB), part of the Italian engineer-
ing, procurement and construction company, Maire Tecnimont Group, con!rms the number of
opportunities available, not only downstream: “India is currently buzzing with new opportuni-
ties for gas treatment, re!nery and fertilizer units. TICB has the references and the capabilities
to undertake these projects. There is a lot potential in the O&G industry, some LNG terminals
are under discussion. The company is eyeing few prospects in the re!ning segment. We do
foresee the re!ning sector to gain momentum next year with new expansion projects getting
!nalized.”
And with all the projects coming up, from upstream offshore to the re!ning sector, this
revolution happening in the Indian oil and gas industry is becoming less and less silent.
G. Sathiamoorthy, managing director, Tecnimont ICB
Correction: Country Report: India, the silent revolution - Part 1, Oil & Gas Finan-cial Journal, July 2011: on page 72 the photograph on top is of Dr. A. K. Balyan, CEO & managing director, Petronet LNG Limited, and not as wrongly state of B. C. Tripathi, chairman and managing director, GAIL.
CarGail_OGFJ_1112 1 11/8/11 4:14 PM
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•India Pt.2
In its search to solve the question of India’s energy security, the Indian state government has been pushing to promote exploration activities in the country, and efforts of both public and private sector enterprises have recently been concentrating on the offshore exploration. With shallow
water expertise steady in place, India’s shores are witnessing a new round of development as deep-water explorations attract high levels of both domestic and foreign engineering and manufacturing.
Nonetheless, the dominance of state-owned players, strong price awareness, and modest foreign investment might throw grit in the machine of India’s offshore oil and gas sector.
Focus Reports presents you with an insight look from Mumbai, India’s offshore epicenter.
The Silent Revolution
Project Director: Federica Torgneur. Editorial Coordinator: Nicolas Carayon. Project Assistants: Mathilde Paquet & Fleur Richard. Editorial Con-tributor: Herbert Mosmuller. Report Publisher: Ines Nandin. For exclusive interviews and more info, please log onto energy.focusreports.net or write to [email protected]
Kedarnath jack-up rig, drilling depth 20,000 feet, courtesy of Great Offshore Limited
www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 3
advertisement
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4 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
New Horizons OffshoreThe story of India’s offshore started with the discovery of the
Bombay High oil!eld 160 kilometers off the coast of Mumbai. “The
Oil and Gas (O&G) discovery in Bombay High took the country
by surprise,” explained Satpal Singh, managing director and
CEO of Dolphin Offshore, one of the !rst Indian offshore support
companies. “There was no expectation that India had offshore oil
resources. We had historic !ndings in Assam and Gujarat, which
had been found during the days of the British presence in India.
The entire production was oil - hardly any gas was restricted to that
source. There was no development of O&G technology; there was
no trading institution over here, although after a period of time,
Oil & Natural Gas Corporation (ONGC) started to develop certain
institutions.”
“It actually all started with a lot of foreign companies, consider-
ing there was no Indian company that had suf!cient expertise,”
Amit Biswas, CEO of Ambico, explained the initial development
of India’s offshore industry. Biswas’ company is a service bound
offshore agency with Joint Ventures (JV) with Malaysian offshore
engineer IEV, British Found Ocean and a partnership with the Aus-
tralian offshore project contractor Tamboritha. “Over the last !fteen
years, a lot of Indian companies have come in, for exploration and
production (E&P) of offshore oil and gas,” Biswas continued.
“The crews of the vessels, along with the companies mastering
the supply vessels, were foreigners,” Biswas continues. “It took us
some time to train local people and qualify them (…) My partner
was, in fact, the !rst ever Indian master to handle an offshore ves-
sel. Slowly, Indian companies came in. Now we see some JV or full-
"edged Indian companies taking lump sum turnkey jobs. Before,
only foreign companies were doing it, and Indian companies were
providing a bit of support.”
“The country’s offshore sector”, said Singh, “possesses such
levels of homegrown expertise nowadays that it could do without
foreign expertise. The growth and development of the Bombay
High !eld provided tremendous opportunities for Indian companies
to start new ventures and over the next 2 decades the country grew
towards self reliance in being able to meet the requirements of the
Oil & Gas industry.”
Beyond Bombay HighWhile the output of the Bombay High !eld run by state-owned
ONGC decreased from a 20 million ton peak in 1989 to 9 million
tons now, India’s offshore industry received a next boost in 2002,
when Reliance Industries, India’s largest private player in the petro-
leum sector, discovered the biggest natural gas reserves in India.
This was in the D6 block in Krishna Godavari (KG) basin, 37 miles
off the Indian east coast in the Bay of Bengal. The !eld has proven
plus probable reserves of 11.3 Tcf. Similar to what happened in the
Bombay High !eld, the development of the operations at the east
coast has seen India’s domestic industry, with the support of foreign
companies, working hard to close the knowledge gap .
Reliance Industries’ operations in the KG basin were quickly
recognized as India’s most important offshore activity and even one
of the most important in the world; the !eld was the world’s largest
gas discovery in 2001. Indeed, as P.M.S. Prasad, Reliance Industries’
executive director, told Focus Reports, “our drilling partner, Trans-
ocean, says that our operations at a water depth of 10,194 feet are
the deepest that have ever been done [worldwide]”; this project
has also seen the participation of the Houston-based oil!eld service
company, Oceaneering, with an all Indian team.
“We had to start from scratch, so having created an organiza-
tion, trained a lot of people and acquired some competencies and
infrastructure, we are now looking at opportunities outside India,”
continues Prasad. “We have a very good safety, exploration, devel-
opment and project management record, and now we are looking
to capitalize on these competencies outside the country.”
Oil demand & supply
Source: University of Petroleum & Energy Studies (UPES), IORS 2011
400350300250200150100500
Demand
2001-02
99.7
32.03
2002-03
114.3
33.05
2005-06
140
33.98
2011-12
199.6
33.47
2024-25
376.5
61.4Supply
InMMT
CarBha_OGFJ_1112 1 11/9/11 2:59 PM
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CarAmb_OGFJ_1112 1 11/22/11 10:58 AM6 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
Full of achievements, including
125 deepwater wells drilled and a
strong track record, Reliance Indus-
tries signed another milestone in its
international strategy by signing a
joint venture with BP last Febru-
ary through which the American
supermajor committed to invest 7.2
billion USD (30 per cent stake) in 21
of Reliance’s oil and gas blocks.
In a press conference following the signing of the deal, Reliance
Industries chairman Mukesh Ambani said that “These guys are the
best (in exploration). If you want to climb the Mount Everest, make
sure you have the best Sherpa with you.”
Reliance’s successful deal was followed last August by news
that ONGC was holding talks with international oil companies
already present in India including Shell, Eni and BG to sell stakes
in its deepwater wells off the country’s resource-rich eastern shore.
At the same time, ONGC has also been carrying out a Rs. 9,000
crore (approximately 2 billion USD) redevelopment investment to
increase oil and gas output of its Bombay High !eld.
Indeed: “In India we are endowed with around 138 billion
barrels of oil and oil equivalent, but most of them lie in frontier
locations/deep water and ultra deep water. In order to search for
these resources our country needs advanced technology,” explains
Ashley Jerome D'sa, CEO of Oil Field Instrumentations (OFI), a
company delivering mud logging services.
D’sa praises the New Exploration Licensing Policy (NELP) intro-
duced in the early 1990’s to further liberalize participation at E&P
tenders, as: “the general impact of such policies is the increasing
entry of foreign investment and private companies in the Indian
upstream market. Obviously, this has also given more opportuni-
ties for growth in the sector that we are in. We have been working
on almost every project; with ONGC for instance, we have been
working with them in all the assets and basins – onshore as well as
offshore. We have also been working with private and MNC’s like
Cairn, Reliance, GSPC, British Gas, Shell, Gazprom, NIKO, Hardy
Petroleum and many others. If the exploration industry continues to
grow we hope to see growth in OFI’s business as well.”
The growth should be supported by the upcoming Open Acre-
age Licensing Policies (OALP), which will replace the old NELP,
and could play an important role in bringing in the necessary
technologies.
“It will de!nitely attract further investment. Under the NELP,
Satpal Singh, managing director & CEO, Dolphin Offshore Enterprises
Amit Biswas, CEO, Ambico Ashley Jerome D'sa, CEO, Oil Field Instrumentation (OFI)
••
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www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 7
companies have to follow a !xed format and process and must
participate in the tenders. With the new Open Acreage Licensing
Policy, whether it happens in 2012 or 2013, there should be more
opportunities for new players to come in. This would also give easy
access of geological data to E&P operators,” hopes D’Sa.
As the government is working on more investor-friendly policies,
India is quickly becoming a strategic location for global players.
Parmjit Singh Nayyar, Oceaneering country manager India, is one of
those who clearly spots India as key for business: “Wherever there
is deep water, Oceaneering comes in,” he told Focus Reports.
“We have always gone for strategic locations, and in fact India is a
standalone location. The country has a lot of open future for oil and
gas and that is why India was selected. The country currently makes
a signi!cant contribution to the growth and Oceaneering is also
very keen on India for the future.”
The company can also provide a solution not only in deep
waters but even when it comes to shallow water. “Let’s say where
divers cannot go, we come in. We are the kind of company that can
support any type of operation. For any kind of dif!culty we come
up with a solution,” clari!es Nayyar.
“India is a strategic location to establish operations,” agrees
K.G. Remesh director of Swiber Offshore, a Singaporean com-
pany that controls a "eet of offshore support service vessels and
construction vessels, when asked what made his company come to
India.“We believe India to be one of the most dynamic and fastest
growing markets for offshore oil and gas activities, with a big and
CarDol_OGFJ_1112 1 11/8/11 4:55 PM
Kedarnath being towed by Great Offshore'sanchor handling tug supply vesselsCourtesy of Great Offshore
••
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•
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CarOce_OGFJ_1112 1 11/9/11 4:16 PM
8 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
growing demand for offshore marine support services in India. India
has a signi!cant pool of engineers and is a strategic location for
market expansion.”
Another deepwater specialist, Weatherford, has been active
in India since 1996, when it opened an of!ce in Mumbai. Olivier
Konig, country manager India of Weatherford Oil & Tools, sees
an important role for the deepwater sector in modernizing India’s
O&G industry. “Deep offshore operations require top class technol-
ogies,” Konig said. “This sector has been driving the trend for India
to accept, bring in and adopt new technologies, being pushed by
service companies as well, consider-
ing we have the knowledge, the
understanding and the experience
in this sector.
“Weatherford has pioneered the
drilling of deep hot wells on the
east coast of India, Konig contin-
ued. “These are some of the tough-
est deepwater environments in
which we have deployed our tools
BPCL: Moving upstream and offshore For the full interview with R.K. Singh, chairman and managing director of Bharat Petroleum Corporation (BPCL), log onto energy.focusreports.net
FR: Since you became chairman & managing director in December 2010, what have been your biggest priorities?
R.K. Singh: The !rst priority was deciding where we want the company to be in !ve years from now. Having decided on our aspirations and vision for Bharat Petroleum, we needed to work out how to attain them. (…)
Predominantly, BPCL is a downstream company dealing with re!ning and marketing of petroleum products, but we have also looked at other available opportunities and have entered the upstream sector and have been fortunate to make some discoveries along with other consor-tium members. This has certainly encouraged us and we now want to consolidate this upstream business and work towards monetization of the discoveries.
R.K.Singh, chairman & managingdirector, BPCL
FR: All your moves upstream have been in quite high-risk ventures so far – deepwater in Brazil, a wildcat well in Mozam-bique and shale gas in Australia. These are all areas where even experienced players are quite wary about entering. What was the rationale behind such moves?
R.K. Singh: Two things played in our mind. As far as Bra-zil is concerned for example, we bought assets owned by Encana Canada. A lot of data was available for us, and we knew that the prospectivity was very good (…).
The second aspect of this is that Brazil is now having a lot of discoveries in deep water. It is a big success story. The operator of the blocks is Anardarko, a very estab-lished player, and Petrobras also has a stake. They are known to be experts in deep water drilling, and have all the necessary rigs and the equipment that are required for deepwater drilling. So the operator’s image, their capabilities and data meant that we took the decision that this would be the place to grow our upstream busi-ness. I hope that by 2015, oil will start "owing in Brazil for BPCL. Despite the high risk, I believe that the upstream
business is more pro!table.
Parmjit Singh Nayyar, country manag-er - India, Oceaneering International
••
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•
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CarOFI_OGFJ_1112 1 11/9/11 1:48 PMwww.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 9
in and have been immensely suc-
cessful in helping clients meet their
exploration objectives. It has been
more than 5 years since we started
out on the east coast and are cur-
rently involved in the development
drilling in that area.”
Going deeper: the next step for the shipping industry?The deepwater developments are also attracting the Indian ship-
ping industry. As the sector is going through a global downturn,
shipping companies have found a new potential area in servicing
the booming offshore industry.
“Offshore today means going deeper and deeper into the sea,
and because of the technological improvement, the maritime com-
ponent of the offshore segment is increasing. Obviously if you go
deeper, you require more engage-
ment of the maritime assets,”
explains S. Hajara, chairman and
managing director of the Shipping
Corporation of India (SCI), the
largest and most diversi!ed public
sector undertaking (PSU) under the
ministry of shipping. “Therefore I
believe offshore has a huge poten-
tial and we are trying to increase
our presence there, but we have not been able to break into the
higher segment of rig platforms as of yet. That is very much in our
minds and we have had discussions with a couple of players but
nothing concrete has happened yet,” he continued.
The support industry as well is looking at the offshore industry
with more interest. Bharati Shipyard for instance, one of India’s
leading private shipyards, is targeting the deepwater offshore
sector. “There is a new trend in the industry where companies
Olivier Konig, country manager India, Weatherford Oil & Tools
S. Hajara, chairman and managing di-rector, Shipping Corporation of India
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10 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
require vessels with high speci!ca-
tions, especially for deeper water
interventions,” P.C. Kapoor, the
company’s managing director, said.
“For instance, operations on the
east coast of India and in Brazil
require larger vessels. Bharati
Shipyard has decided to go on and
build these vessels. We see a lot of
growth opportunities in this area,
both in the east coast of India and
in Brazil.”
Bharati Shipyard acquired an integrated offshore oil!eld services
provider, Great Offshore, in June 2010 from the family-owned
Great Eastern Shipping Company, capitalizing on the synergies
existing between the two companies. Kapoor continued. “Bharati
has been constructing ships for Great Eastern as well as for Great
Offshore for the last twenty years. A major portion of Great
Offshore’s "eet that is currently
operating has been constructed by
us. There were a lot of interactions
between the two companies before
the acquisition, even before we had
a single share.”
Since the acquisition, Bharati has
been actively growing and renew-
ing Great Offshore’s "eet, phasing
out the older ships to adapt it to
deep water operations. Kapoor explains that, “since we took over,
we have already purchased six vessels for !ve or six years, available
in very attractive places. This purchase brings the total size of our
"eet to 47 vessels, out of which 10 or 12 are to be phased out. We
will double the "eet in the next !ve years, not in terms of number
of vessels, but in terms of operating capacity.”
Christopher Phillips, director of Seatech, a ship broker and char-
terer founded in 2008, has been making good use of the oppor-
tunities generated by the development of the offshore industry,
especially by the discovery in the KG-D6 basin. “There is a lot of
potential in the shipping industry in India, especially on the east
coast belt which is really rich in minerals,” said Phillips. “In the light
of a few power companies increasing their activities in the region,
there are a lot of project movements on this belt. Even Mumbai
has specialized in project cargoes. Simultaneously, in the West,
the states - especially Gujarat - have converted a lot of industrial
growth over the last decade.”
Given that India imports two thirds of its energy needs and
exports about 40% of its re!ning products, additional opportunities
arise for the shipping industry to support the oil and gas sector.
This is the approach that has been taken also by Seatech: as “we
are a young establishment; we have to be aggressive with our
approach and look into every opportunity that comes our way,”
explains Phillips.
Foreign investment in restraintsWhile India’s O&G sector has received a good deal of foreign
investment in past years, many feel it’s not close to what it should
CarSea_OGFJ_1112 1 11/8/11 5:16 PM
P.C. Kapoor, managing director, Bharati Shipyard Limited, and execu-tive director, Great Offshore Limited
Christopher Phillips, director, Seatech
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CarGEI_OGFJ_1112 1 11/9/11 1:51 PM
www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 11
be yet. India’s regulatory environment and
the high complexity of the market are often
mentioned as holding off foreign players. In
fact, major international companies are said
to be waiting for the country to be ‘mature
enough’.
Aboveground, India’s reputation is
good due to its stable democracy, clear
regulations and policies, especially in
the upstream sector, and widely praised
production sharing contract (PSC) systems
in place.
Gas Thirsty!
In looking to secure its ever-growing hunger for energy, Indian demand for LNG is growing.
Domestically produced gas saw a lower output, making imported gas more crucial. Growth projections for natural gas demand are 4.7 percent annually, which would mean it would reach about 600 million standard cubic meters per day (mscmd) by 2030.
GAIL, India’s principal gas trans-mission and marketing company, is preparing its Dabhol, Hazira and Kochi LNG terminals for 100-120 mscmd of R-LNG, and is establishing an LNG plant in Maharashtra from where it is planning to progressively bring more LNG to India.
Already, under a memorandum signed last June, Gazprom agreed to supply 7.5 million tons of LNG over 25 years to Gujarat State Petroleum Company, Petronet LNG Limited, and GAIL. In this !scal year, eight LNG deliveries have been sourced, and the company expects another !ve or six in the remainder of the year. In the next couple of years, its spot gas portfolio will increase four- to !ve-fold.
B.C. Tripathi chairman and managing director of GAIL told Focus Reports about current and future plans in LNG. He states, “The company has already sourced half a million tons of LNG, for the !rst time doing it indepen-dently, and we are now discussing various other major supply projects. GAIL intends to import !ve million tons of LNG in the next two to three years. That is why we are gearing up GAIL’s infrastructure so the receiving terminals get ready and the pipeline infrastructure is in place in due time.
B.C. Tripathi, chairman & managing director, GAIL
“GAIL is looking not only to grow in the domestic market but internationally. Hence, we would like to have partner-ships with companies that are ready to work with us in the international arena, to source more LNG, for instance. It could be either an upstream investment for producing or near-producing blocks, or it could be LNG and petrochemical plants. What GAIL can bring in is its unique 25 years of experi-ence and expertise in one of the world’s most challeng-
ing, but most promising, energy markets,” Tripathi concluded.
Since the establishment of GAIL in 1984 the Indian oil and gas industry has experienced major trans-formations, especially related to the market liberalization and modernization of the country’s major PSU’s. How has GAIL adapted to this new environment and helped shape it?
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12 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
The NELP has been a very successful policy in opening up
the industry for private players and liberalizing the market. A.K.
Arora, director general of Petrofed, one of India’s top oil and gas
representatives, emphasizes the changes NELP brought. “You have
to understand that the rate of participation of private players has
considerably increased since the market liberalization took place.
However, in an evolutionary process you have to start somewhere.
The perceived deviations and imperfections are being taken care
of in a gradual and democratic process, unlike other regimes where
the state requiring something to be done acts differently adopting
varying processes.”
“What no one disagrees with is that the system in India has
evolved towards a market-friendly and level-playing !eld environ-
ment where private players are enjoying great scope for action.
One may criticize the speed of these changes, but can’t deny their
existence.”
However, India is still lagging behind in exploring its offshore,
with underground risks keeping international players at bay in the
upstream industry. The country has the reputation to be unex-
plored, and, although it’s the government’s ardent wish to get
exploration going in as many basins as possible, some say the
country has failed to do so suf!ciently, with available data lacking,
making investors hesitant to deploy activity.
The aforementioned BP deal and the ONGC negotiations with
Shell, Eni and BG to sell stakes in its deepwater developments
on the country’s eastern shore are promising signs for foreign
companies looking to enter India. Nonetheless, there are still many
administrative hurdles and questions on the risk/bene!ts ratio.
One aspect many believe should
change, as expressed by major
international energy companies
looking to conduct exploration
activities in India, are restrictions
imposed by the country's defense
and space authorities on explora-
tion activities.
Just over half a year after it
signed the biggest foreign direct
investment in India’s history, BP, in a joint letter with BHP to the
Indian petroleum ministry, expressed its concerns over these restric-
tions as they would block medium and long-term commitments.
“This is also affecting the con!dence of international companies
in undertaking high-cost, high-risk frontier exploration in offshore
India,” the letter read.
A world nucleus for the service industry"While in the upstream segment there is ample room for improve-
ment on the regulatory front, India has been very successful in
attracting international players supporting the oil and gas industry
through new technologies, solutions and equipment. Sajiv Nath,
managing director of Swiss-based instrumentation and process
automation company Endress+Hauser, said “We could have gone
anywhere in Asia, but we went to India because this is where the
bene!t to risk ratio is the best. India is rationally considered the
main investment destination for the group. India is a sustainable
market which also provides IPR (Intellectual Property Rights) to
protect. Looking at the growth market in India, the bene!ts are far
higher than the risks,” he continued.
One of the main bene!ts is undoubtedly provided by the
quali!ed Indian workforce. “The Indian manpower is a young pool
of engineers with high communication skills (…),” Rabindranath
Burman, director of US manufacturer ITT Corporation, summa-
rized. “India is not only a manufacturing hub but also a talent
pool, speci!cally from the engineering side. ITT demands from its
engineers that they support global projects at the R&D level, while
also synergizing new strategies". And they are up for the task: “We Pipelines in Rajasthan, Courtesy of Cairn India
A. K. Arora, director general, PetroFed
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14 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
have extensive training programs, a strong team of people, migrat-
ing from one part of the world to another, and we have the best of
both worlds.”
There are worries, however, that the demand for skilled labor in
India’s oil and gas sector might outstrip supply making it increas-
ingly dif!cult to attract and retain talent, which is critical in a fast
growth economy. “The working environment is very demanding
from a human resources perspective,” Shishir Joshipura, manag-
ing director of SKF, a global supplier of rolling bearings, seals,
mechatronics, services and lubrication systems said. “The rapid
growth will increase the demand for quali!ed resources, thus invit-
ing an increased focus on retention of talent. Innovation, energy
ef!ciency and reliability of operations while managing costs in an
ever improving way are some of the challenges all industries are
faced with,” which, according to Joshipura, could lead to nothing
less than “a war for talent.”
Is India ready to pay the price?Despite a very fast changing environment and the sector’s liberal-
Entering the Indian market
As the industry is booming, foreign companies are "ow-ing in to set a direct base in the country. But what is the best entry strategy in a country as wide and dispersed
as India, that counts so many hotspots for the oil and gas industry? We asked Hydratight, the boltied joint solutions specialist, that is currently setting up the Indian operations.
“The question is how to organise for ourselves the stron-gest possible base here. We need a better understanding of the needs of our local customers (…). The market here isn’t as formal and organised as in the US or in Europe, but we stick to our plan: develop a profound knowledge of the market and establish strong relationships with customers”, explains Alain Wald, EMEA area leader, when we met him in the occasion of the Offshore India and Unconventional Oil & Gas India confer-ence and exhibition in Mumbai.
Murali Narasimhan, country leader India, adds that, despite Bangalore being the hub for the Indian operations, “no single place can realistically handle the entire country’s needs, wher-ever it is based. Bangalore will be the hub, but we intend to develop satellite bases across the country. Our initial focus will be the western part of India, which is where the key O&G play-ers are located. Progressively, we will work on developing the
northern and eastern sides of the market. There is also a lot of development taking place at Kakinada in the south.”
Hydratight sets international standards in joint integrity on a
global scale. Operating from 35 locations, Hydratight offers
fast, accurate solutions to your bolting and machining needs.
Using state-of-the-art equipment, our qualified on-site
technicians offer monitoring, bolting, machining and training
services to maximize safety, reduce plant down-time and
extend facility life.
To find out more visit
www.hydratight.comor email [email protected]
ENGINEERING MAINTENANCE TRAINING SERVICE
CarHyd_OGFJ_1112 1 11/8/11 4:58 PM
Murali Narasimhan, country leader India, and Alain Wald, EMEA business leader, Hydratight
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www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 15
ization, India’s PSUs are dominat-
ing the industry both upstream
and downstream. Given their size,
entering into agreements with them
is a must for any company wanting
to be present in the Indian oil and
gas industry. Contracts are often
long-term and, given the state
backing of these companies, safe.
In their attitude to new tech-
nologies, there are major differences between India’s National Oil
Companies (NOCs) and International Oil Companies (IOCs), Olivier
Konig, country manager India of Weatherford found. “NOCs and
IOCs in India have a very different approach to technologies. The
IOCs are very forthcoming and open to trying new technologies
while NOCs often have stringent procurement,” he continues.
“Besides, with NOCs, there is not enough "exibility to allow the
addition of new products and
services, when these are not part of
the scope of work that was decided
initially, even if they are brilliant
products that could meet their
objectives and more.”
Indeed, the procurement system
is very strict, as the selection of
suppliers, either service companies
or equipment providers, is based
exclusively on price, what is called the L1, or lowest bid.
Clearly, this process has changed the landscape of the industry,
in"uencing not only the local industry but also the international
companies, which have been progressively reducing their prices
in order to secure contracts with the PSUs. As Dolphin Offshore’s
managing director and CEO Satpal Singh explains, “the worldwide
economic situation and more particularly the reduction in offshore
CarEnd_OGFJ_1112 1 11/8/11 4:16 PM
Shishir Joshipura, managing director and country manager, SKF India
Sajiv Nath, managing director, Endress + Hauser
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16 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
dollars a day. It has been very dif!cult for
Indian companies to pick up work.”
The same issue is faced by the equip-
ment suppliers. “The concept of L1 is
hurting the industry,” said Javed A Hawa,
managing director of Hawa Valves, speak-
ing on the valve industry. “There is an
evaluation done by engineers; however,
those engineers are not valve engineers.
They will look at any company and their
products against some parameters that
have been set by their management but
they do not have the in-depth knowledge
to understand what differentiates one valve company from the
next. In fact they are carrying out an evaluation, which is prior to
the bid opening, but that evaluation is skewed from the beginning.
The process is "awed.” In order not to compromise with the qual-
ity standards, the company decided to focus on the global market,
rather than the Indian one. “We realized that the values that we
were bringing to the investor in terms of HSE were better recog-
nized by the global end users in the hydrocarbon sector, rather
than the PSUs.”
However, for international companies that are setting their
foothold in India, PSUs remain the !rst target, and one of the chal-
lenges is increasing the acceptance of new technologies. “Given
the importance of the public sector within the Indian market, the
idea !rst needs to be sold to them,” said Sulzer’s India President
B. Balaji. “At the same time, as markets are developing, customers
also are willing to try new technologies. This has opened up doors
for us, as we are able to bring a lot of world class technology in
India through the Sulzer Chemtech channel.”
Luckily, interest in advanced technology is increasing and the
international players are capitalizing on these nascent opportuni-
ties. Endress+Hauser’s managing director Sajiv Nath has seen
landslide changes in the way in which the country deals with new
technology. “The market has predominantly consisted of PSUs but
has evolved over time. I still remember the phase during the 1980s,
when talking about new technologies and software was not well
CarHawa_OGFJ_1112 1 11/8/11 4:57 PM
Sulzer facilities, Pune
oil and gas development projects forced international companies
to come to India and bid competitively. They started to dump
prices to get work in India, just to keep their assets deployed. As
a consequence, in the last two years, the rates of construction
barges have gone down from 455,000 dollars a day to 175,000
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CarTem_OGFJ_1112 1 11/9/11 1:43 PMwww.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 17
accepted, he explained. Today it
is the innovative technical “geeks”
who drive the Indian market. In fact,
Indian technologies are more driven
by the end users than by EPCs.
Endress+Hauser has been success-
fully able to identify certain “geeks”
amongst these end users who have
been receptive to technological
change.”
This aspect has been con!rmed by Konig from Weatherford,
who is currently at his second stint in India. “Over the years the
country’s O&G business has evolved and the country is today much
more open to new technologies, which supports Weatherford’s
growth strategy,” he said. “The opening up of the market has been
supported by the entry of international companies There have been
several new private Indian companies that have secured blocks in
the latest NELP rounds”.
From price to quality: the Indian re-evolutionAs historically many of the local manufacturers have been focusing
on lower prices in order to guarantee an access to a very price-
conscious market, for many years the image of India as a cost killer
country impacted the reputation
of Indian manufactured products,
fairly or not.
“Up until 1990, there was not
much of a market scope for the
Indian industry, especially as far as
valves were concerned, Jagdish
Prajapati, managing director of
valve manufacturer Panam Engi-
neers recalls. “Indeed, the purchas-
ing mentality abroad was laden with a few prejudices in terms of
region, business ethics, etc. But once they came to the realization
that products from countries like India can be of high quality, they
began wanting to trade with us more.
While the situation has changed for the better and Indian prod-
ucts are sold on foreign markets, Indian companies still have a gap
to close,” Prajapati said. “There is still a little gap [between Indian
and international quality], as far the industry world is concerned.”
“The acceptance of Indian products is much more prominent
now as compared to 10 years ago”, admits Nath of Swiss-based
Endress+Hauser. To him the ability of Indian engineers to learn and
integrate new technologies has much to do with this success: “The
Indian workforce has tremendous technical skills. Thanks to the
B. Balaji, president, Sulzer IndiaJaved A. Hawa, managing director, Hawa Valves
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18 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
technical knowledge the employees have, they can now be trained
easily.”
The fact that Indian companies did overcome many of the
prejudices that haunted them earlier has been con!rmed also by
V.P. Ramachandran, secretary of the Process Plant and Machinery
Association India (PPMAI). “Ten years back, Indian engineering
companies used to go and visit ACHEMA [an international exhibi-
tion congress on Chemical Engineering, Environmental Protection
and Biotechnology, held yearly in Frankfurt, Germany] to under-
stand the latest foreign technologies, learn from them, and perhaps
buy them,” says Ramachandran. “The situation has now changed;
the technology transfer goes the other way around. Now, Indian
companies go there to sell their equipment and technology. They
are looking for buyers for the technologies they are able to manu-
facture from India.”
Overcoming the misconceptions, many Indian manufacturers
look abroad to sell their products. So does H.K. Sippy, chairman
and managing director of Tema India, whose company belongs to
a small group on the globe able to
manufacture high quality, high pres-
sure heat exchangers.
“Foreign operations are de!-
nitely a central focus, due to the oil
sands in South America, Canada,
and Russia. We are ready to com-
pete with players overseas,” Sippy
said. “We are concentrating on
our Screw Plug heat exchangers in
O&G, for which we have a patented
design. The idea is to increase our
global market share to at least
40%.” Tema is one of the Indian
companies that has been strongly
investing in high quality and latest
technology. As Sippy highlights,
“There are several companies
that work with heat exchangers,
although it is true that very few of
them have the design capabilities
that we possess. We have been
able to elevate the standards of our
company to its current standing.
Apart from that, there are com-
panies who have not been able to
bring to the fore the combination
of design and an intricate manu-
facturing process. They may be
!nancially stronger and larger as an
establishment, but technically, they have not been able to bring this
kind of engineering excellence.”
With equipment installed on the !ve continents, GEI Industrial
Systems, specializing in heat transfer technology, is another Indian
manufacturer that has found a way to bring Indian equipment to
international markets. “Almost every week, somebody visits us from
abroad to establish a JV or some kind of manufacturing arrange-
ment with GEI. Foreign visitors have a good opinion of Indian
CarPan_OGFJ_1112 1 11/9/11 1:23 PM
VP Ramachandran, secretary, PPMAI
H.K. Sippy, chairman and managing director, Tema India
Jagdish Prajapati, managing director, Panam Engineer
CarFur_OGFJ_1112 1 11/8/11 4:19 PM
www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 19
capabilities,” said
C.E. Fernandes,
chairman and
managing direc-
tor of GEI. “There
was a time when
Indian qual-
ity was neither
appreciated nor
accepted in most
countries; however, in the last decade or so a lot has changed.
There has been a shift in perception in recent years and many are
now con!dent of the quality and technology of Indian products,
which are at par with European vendors”, he continues.
With JVs in Oman, Brazil, Singapore, and plans to enter South
Africa, Fernandes has a word of advice on how the international
O&G industry should deal with companies like his. “The O&G
Panam Engineers manufacturing facility
community should look global and
accept companies which are com-
ing up aggressively to meet the
demand in these areas, especially
large multinationals such as Chev-
ron, Shell, ExxonMobil. They should
open up in such a way that compa-
nies from the developing countries,
like GEI, can get a good participa-
tion to join in their progress.”
Re!ning, the future of India?Even though India has been undoubtedly developing its offshore
sector, as well as a vibrant manufacturing industry, the most promis-
ing sector in the O&G industry still seems to be re!ning. India already
contributes to 4% of the world re!ning, with an installed capacity
of almost 200 million tons per annum in 2011, and showcase the
C.E. Fernandes, chairman & managing director, GEI Industrial Systems
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20 energy.focusreports.net December 2011 Oil & Gas Financial Journal www.ogfj.com
largest single-complex re!nery in the world, the Jamnagar complex
by Reliance Industries. Notwithstanding these impressive !gures, the
country is continuously adding new capacity and is expected to reach
300 million tons per annum by 2017.
Most of the state owned players are adding capacity. The PSU
Indian Oil has recently completed the expansion of its Panipat re!nery
to 300,000 barrels a day, from 240,000. State-owned BPCL, based
in Mumbai, with a re!ning capacity of 30 million tons per annum, in
addition to expanding capacity at
its Kochi re!nery, has commissioned
the Bina re!nery, which will have
a capacity of 120,000 barrels per
day with the potential to raise it to
300,000 barrels.
The other Mumbai-based state-
owned re!nery, HPCL, plans to
expand capacity of its Visakh Re!n-
ery by 9 million tons as well as a relo-
cation of the Mumbai re!nery, which currently re!nes 6.5 million tons,
to the west coast of India. The company furthermore commissioned
its !rst re!nery in the north of the country, in Bathinda in the state of
Punjab, through a joint venture with Mittal Energy. The HPCL Mittal
Energy Limited (HMEL) grass root re!nery will be commissioned by
March 2012 and is expected to produce 9 million tons per year.
The expansions in the country’s major re!neries have also allowed
the service industry to increase its capacities. Swiss manufacturer Sul-
zer for instance has been expanding its capacity in order to support
the boom in the re!nery industry. “In fact, Sulzer India has carried out
a signi!cant portion of the mega projects in re!neries in 2006 and
petrochemical in 2007 & 2008. Considering we expanded our plant’s
capacity in 2005 and 2006, so before the booming really started, the
timing was excellent. Successful execution of large projects has given
a lot of con!dence to our customer for future collaborations also”,
Sulzer’s president of Indian operations B. Balaji said.
The new projects have also created a shift in the structure of the
industry, as “there has been a shift from a PSU dominated market to
a number of private partnerships.
For instance, the biggest re!neries in
India are not PSUs but Reliance and
HMEL, which is a partnership with
the Mittal Group”, ITT’s managing
director Burman pointed out.
Indeed, these major expansion
projects have created a number of
opportunities for the service industry
and Burman believes that the extra
CarSul_OGFJ_1112 1 11/16/11 1:56 PM
Hydrocracker project, Haldia refinery, Courtesy of Punj LloydRabindranath Burman, director and country head, ITT Corporation India
A. Basheeruddin, managing director and co-founder, Furnace Fabrica
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CarITT_OGFJ_1112 1 11/10/11 2:48 PM
www.ogfj.com Oil & Gas Financial Journal December 2011 energy.focusreports.net 21
capacity in these re!neries “will de!nitely be a driving force
in both the top and the bottom line of the pro!t and losses
(P&L)” of the company.
Furnace Fabrica, an Indian EPC player with a strong focus
on the downstream, has been taking advantage of these
new projects as well. As managing director A. Basheeruddin
explained, “We successfully completed expansion projects
for Hindustan Petroleum Corporation Limited (HPCL). Now
we are executing a sulphur recovery unit for the same client.
We expect to get a major chunk of the business from [the
expansion of the Bombay re!nery]. We completed the expansion plans of the Haldia re!nery
as well. In fact, we were the !rst company to build the second hydrogen reformer at the Indian
Oil Corporation re!nery, with a capacity of 94.62 mmkCal/hr”. Currently, the company is work-
ing on three acid coolers with anodic protection design for Indian Oil Corporation’s Paradip
re!nery. “Many companies will !nd it dif!cult to meet the stringent requirements,” Basheer-
uddin said on this last project. “There were only two bidders. One was from America and we
were the second. We beat them out on the price, which is often one of the main criteria in
India, considering it is a highly price-sensitive market.
“In addition to this, we are one of the few international companies with experience in
dismantling re!neries for reconstruction, not for scrapping. We are able to dismantle, rebuild,
and also expand re!neries. Our capacity is unique in that respect”, continues Basheeruddin.
G. Sathiamoorthy, managing director of Tecnimont ICB (TICB), part of the Italian engineer-
ing, procurement and construction company, Maire Tecnimont Group, con!rms the number of
opportunities available, not only downstream: “India is currently buzzing with new opportuni-
ties for gas treatment, re!nery and fertilizer units. TICB has the references and the capabilities
to undertake these projects. There is a lot potential in the O&G industry, some LNG terminals
are under discussion. The company is eyeing few prospects in the re!ning segment. We do
foresee the re!ning sector to gain momentum next year with new expansion projects getting
!nalized.”
And with all the projects coming up, from upstream offshore to the re!ning sector, this
revolution happening in the Indian oil and gas industry is becoming less and less silent.
G. Sathiamoorthy, managing director, Tecnimont ICB
Correction: Country Report: India, the silent revolution - Part 1, Oil & Gas Finan-cial Journal, July 2011: on page 72 the photograph on top is of Dr. A. K. Balyan, CEO & managing director, Petronet LNG Limited, and not as wrongly state of B. C. Tripathi, chairman and managing director, GAIL.