The initiative set by the Government of India to attract global
players in oil exploration, production and refining, to fulfill
India’s large scale present and forecasted demand requirement
seems to receive further momentum. Major global upstream and down
stream (exploration and refining) heavyweights along with the service
providers are evincing increasing interest to enter into the country.
Thanks, to the new exploration and licensing policy of the Government
Entry of newer entrants holds significance, as many of the players
and project service providers, willing to source business opportunities
in the sector, are showing interest in setting up green field projects
and also enter into technical collaborations with Indian counterparts,
through technology transfer agreements for business promotion. This
could entail larger foreign direct investment running into billions
of dollars into the sector. Not the least, in plugging the country’s
energy requirement deficit.
This perception was evident in the recently held Pertrotech- 6th
International Petroleum Conference and Exhibition in New Delhi.
The event, saw major presence of large number of Indian and foreign
Oil and gas companies, consisting the likes of ONGC- as the major
organiser of the event, LNG Petronet, Shell, Zarubezheneft of Russia,
Ras gas of Iran among many others looking for sourcing opportunities
into the hydrocarbon and gas sector .
'With deregulation set by the Government in the sector, pertinently
ending the monopoly of ONGC in exploration, added with factor of
crude prices ruling at $ 45 to $50 explorers and producers are finding
it much commercially viable to set up newer facilities in India
since this would enable them to attain a better breakeven in their
operations'- says Mahendra Aswani, Marketing Manager of the oil
and gas division of Technical Parts Company, a United Arab Emirates
based major concern involved in undertaking service contracts for
both upstream and down stream industries. Similar views are endorsed
by officials from the country based Engineers India Limited. EIL
offers project services in pipelines, oil and gas processing etc.
With exploration and production getting further commercially viable
and going by the assorted nature of customised demand requirements
from the upstream segment, service providers to the same are increasingly
vying to have a sizeable market share, while meeting the demand
of the concerned segment in the new scenario. Not the least, in
consolidating their position.
This is endeavored to be done by companies through providing advanced
knowledge data base inputs and cutting edge technology solutions
at their disposal, to the explorers and producers. A case in this
point is made by Randal Mc Corvey, General Manager- Far East of
Dutch based company Furgo Jason, involved in gas reservoir characterization
both in river and sea beds. According to Mc Corvey, this has to
be done by providing information (geological data base) in his case
to the explorers much with value added content and precision, so
as to enable the users to go in for accurate degree of exploration
and in turn enable the service providers to maintain credibility.
The company claims to have an expertise in having a diverse data
base created through convergence of inputs and years of experience
in the field. Prominent Indian clients of Furgo-Jason consists of
Reliance and ONGC. For the former the concern has done studies on
Krishna Godavari basin.
Similar views are echoed by concerned officials of Russian giant,
Zarubezhneft. The company has been working in India since 1983 with
ONGC and has interest in exploration, designing and construction
of oil fields. In concurrence with providing advanced technology
and inputs, companies are also increasingly making their best efforts
in making their products and services competitive through better
economics of scale in their operation to make their presence felt
Though there are many opportunities in exploration and production,
companies are also looking forward for undertaking projects in the
refining sector. Because much newer development is set to take place
in India’s refining arena. As per this, the country would
be witnessing large scale refining capacity additions in the immediate
future. This would be from the Essar group which would be commissioning
10 million tones refining capacity within a span of two to three
years. Besides, Nagarjuna would also be adding 6 million tones refining
capacity shortly. Other prominent capacity additions would be taking
by Indian Oil Corporation in Panipat and that also in Paradeep.
All these leaves much scope for newer and existing entrants to cash
on the development.
Moreover, there is further much scope to be harnessed by operators
and service providers in refining owing to possibilities of retro
fitment and capacity addition through de bottlenecking. This is
owing to the reason, India’s refining capacity leaves much
to be desired in terms of better capacity utilization and integration
of operation. Capacity addition is significant not only in face
of larger oil demand in the domestic market but also to maintain
a steady trend in exports of petroleum and lubricants in the export