We want to shore up global presence

Written by Mona Mehta | Updated: Aug 4 2009, 07:29am hrs
After winning two major offshore platform contracts from the Oil & Natural Gas Corporation (ONGC) aggregating Rs 5,300 crore, Larsen & Toubros (L&T) K Venkataramanan, the companys president operations, engineering and construction (E&C) projects, engaged in a discussion with FEs Mona Mehta on the future outlook for the E&C arm and the corporate strategy for the L&T group, including its plans in the oil and gas sector. Venkataraman, whos also on the board of L&T, said the company is gearing up to foray into development of offshore platforms. Excerpts:

With improved market conditions, is L&T focusing on bagging major offshore platform contracts in this financial year

There is $2 billion worth of tenders to come from ONGC in the next nine months in the upstream hydrocarbons sector alone. In fact, certain expected oil & gas upstream tenders from ONGC are backlogs from last year. This year, the line of tender prospects is also expected from outside of ONGC as well. India is not active in the availability of gas for fertilizer in downstream. But, in the recent past, L&T has been active in the oil and gas downstream. There are new tenders expected in this category in Mumbai, Vizag and Paradeep.

Is L&T looking at any distressed offshore platform acquisition of a small and medium sized oil & gas company

There is no plan to acquire any distressed offshore platform. In fact, L&T E&C division has already built up offshore platform in Oman which is ready for operations. The division is also building up greenfield and modern facilities in fabrication and installation in Oman, Hazira and Ennore.

Where does L&T see itself in the next five years from now with respect to its E&C business, specifically in terms of position and revenues in offshore platform business

By 2015, L&T E&C division plans to set up additional greenfield modern facility for offshore platform at Ennore in South India. This will be based next to our already set-up defence shipyard. The future plan is to build up capacities to execute $ 4 to 5 billion worth of orders a year.

How is L&T planning to broad base its E&C business in the near future

The E&C division is focusing on increasing its global presence. The division has secured orders from international clients in Malaysia, USA, UK, Brazil, Saudi Arabia, UAE, Qatar, Bangladesh, Sri Lanka. In Africa, Libya, L&T E&C division has a set up of its own people to do the groundwork to be able to handle offshore platform operations. L&T plays a critical role in the core sectors of industry and infrastructure. It provides services from the earliest stages of pre-project development through to start-up. The division brings expertise to the industries that it serves, while applying core competencies and skills to all its work. The export earnings of the division have been increasing steadily. The customer profile includes leading names such as Samsung, Chevron, Bechtel, Kvaerner, Pirelli, Siam Michelin, Goodyear, among others.

What are the major challenges L&T's (E&C) division is facing in the development of offshore platforms and in turnkey projects in the oil & gas business

Expanding our offshore platform development business in North America with a base of our own employees to handle the operations is both a challenge and an opportunity.