‘India is fast emerging as the next global refinery hub’

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: You could say oil and gas run through his veins. After being part of the top management at Indian Oil Corporation, one of the country’s largest oil refining and marketing firms, he moved to head ONGC Mittal Energy Ltd, the energy joint venture of the steel czar LN Mittal and ONGC, in London, Naresh K Nayyar is currently CEO at Essar Energy Holdings Ltd, a subsidiary of Essar Global Ltd and managing director of Essar Oil Ltd. In an exclusive interview with FE’s Anupama Airy, Nayyar shares his vision for Essar’s oil and gas businesses and elaborates on diversification plans into petrochemicals, oil & gas exploration, refining and marketing in both domestic and global markets. Excerpts:

What are Essar’s plans in oil and gas exploration & production (E&P)?

We are an integrated energy company and are expanding our presence in related sectors as part of the forward and backward integration plans. Essar already has a strong global presence and we already have a 63% participating interest in offshore block OPL 226 in Nigeria and 100% interest in offshore block 114 in Vietnam. Besides, we have 100% interests in three exploration blocks in Madagascar.

In India, we have a 70% stake in the Mehsana block in Gujarat, where we are also the operator of the block, which has certified 2P reserves of 2.7 million barrel of oil in one discovery alone. Then there are two blocks in Assam, where Essar has 100% stake. In West Bengal, we again hold a 100% stake in the RG (East) CBM-2001/1 block in Durgapur.

Our Ratna and R-series blocks are pending before the government for execution of the production sharing contract and we expect this to take place shortly. We have tied up with Nobel Energy of the US and had bid jointly for the Nelp-VII round. We are also exploring further opportunities in international markets along with Nobel Energy as also on our own.

How do you see the country’s refining sector emerging in the years ahead?

In the refining sector, the strong economic growth of Bric nations is fuelling energy demand. Global demand is expected to grow from 83 million barrels per day in 2005 to 117 mmbpd in 2020. There will be a huge demand for lighter distillates and cleaner fuels.