Opportunities for Service Providers in Indian Offshore

8/8/2019 Opportunities for Service Providers in Indian Offshore

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Opportunities for Service Providers in IndianOffshore

Anand V SharmaMantrana Maritime Advisory

2nd Annual Offshore India Oil & Gas Summit,Mumbai, 2010


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Summary of Ongoing activity in the offshore E&P in India

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Companies with large budgets for Offshore E&P - India

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Reliance

Industries36%

Cairn

Energy

22%

GSPC

18%

ONGC

11%

Others

13%

Discoveries by Company

Offshore

MostlyOffshore

Mostly

Onland

Offshore

Reliance Industries has been spending annually more

than US$ 2 billion on Offshore E&P activity

ONGC has budgeted about US$ 16 billion to be spent on

domestic E&P activity between 2007-12

Offshore to have substantial share

GSPC plans to raise close to US$ 1 billion from IPO

Roughly 35% to 40% to fund its KG Basin

About 20% to 25% to fund its other E&P activity

Rest to settle previous debt

Cairn India to invest to redevelop its depleting fields in

Cambay basin and Rava

Investment on E&P translates into revenue for service providers


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Opportunities for Service Providers - India

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Mumbai Offshore

Gulf of Cambay

Proposed development projects and ongoing

redevelopment projects in Offshore Oil & Gas Sector

Redevelopment of MumbaiOffshore by ONGC

Existing fields of Cairn

Source : DGH

Discovery of ONGC,Reliance, GSPC


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Indias E&P companies

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ONGC is the largest Exploration & Production company in India with maximum budget

It is the largest producer of Offshore Oil & Gas in India

Plans to invest US$ 2 bn for redevelopment of Mumbai Offshore

It has maximum number and area for exploration and development

It employs the maximum number of rigs and logistics support for Offshore E&P in India

It mostly hires rigs and vessels on a long term time charter ranging between 3 yrs to 5 yrs

ONGC also awards drilling and construction projects on a turnkey basis, hence service providers

have opportunities to find employment with companies serving ONGC

Reliance Industries would be the 2nd largest E&P company in India

Has discovered one of the largest offshore gas field in East Coast of India

Hires vessels on long term and short term charters

Aker Solutions is developing its deepwater field on the East coast of India, Bechtel has undertaken

project management consultancy


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Indias E&P companies

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Gujarat State Petroleum Corporation (GSPC)

Discovery of 4 TCF gas reserves on East Coast on India

Planning to drill 15 well on the East Coast of India

Initial production estimated to be 400 MMSCFD

Has commissioned 1 Jackup of Aban Offshore for field development

Likely to hire more rigs

CAIRN

It has existing production fields in Offshore India

Looking to hire rigs for drilling 13 wells in 3 fields with option of 4 wells

There are other E&P operators such as Niko Resources, BG, ENI too have presence in India


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Demand for Marine Assets - India

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Statistics & Projections Related to Offshore Drilling - India

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Cumulative drilling depth in Offshore India (000) Number of Wells drilled in Offshore India

0

100

200

300

400

500

600

700

Fy -03 Fy-09 Fy-14

Exploratory Development

CAGR 14%

CAGR 8%

Future Projection

0

2040

60

80

100

120

140

160

180

200

Fy -03 Fy-09 Fy-14

Exploratory Development

CAGR 15%

CAGR 7%

Ideally, the future projection of wells to be drilled should be estimated from the committedMWP by E&P Companies. However, a more simplistic approach is as follows


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Drilling Fleet - India

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Water Depth < 100 m

Discovery Hydrocarbons

Jagson

Precision Drilling

Northern Offshore

Drilling Rigs for Water Depth > 100 m


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Demand for Rigs - India

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Demand for offshore rigs due to contract completion

2010 2011 2012 2013 2014

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Hercules Offshore 1 1

Jagson 1Noble Drilling 1 1

Northern Offshore

Precision Drilling 1

Transocean 1 2 2 3 1

Aban Offshore 1 2 2 1GreatShip 1 1

Jindal Drilling 1 1

Total 2 0 1 3 3 3 2 2 1 1 0 1 3 1 1 0 1 0 0

The above rigs could be rehired on nomination basis

ONGC planning to hire 6 rigs in the year 2011

ONGC has two ultra deepwater rigs scheduled to join in Dec, 2010, independent of the above table

> 100 m water depth

< 100 m water depth


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Demand for Offshore Logistics - India

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Long Term Demand (Results in Long Term Charter)

Every cluster of rig or production platforms should be supported by 2 vessels at least

1 for supply and 1 as standby to handle all emergency response

E&P company look for long term charters

Drilling companies such as Transocean, which undertake turnkey contracts for drilling wells

charter Supply vessels for longer term

Short Term Demand (Spot Charter)

Every Year there is demand for AHT/AHTS for offshore towage prior to monsoon

Roughly 25 to 30 Anchor Handlers are chartered every year between March to May 15

There is demand of Supply vessels, construction barges, heavy lift vessels, etc by PMC for short

term


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Supply of Marine Assets for Marine Assets - India

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Future Supply of Drilling Rigs in India

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3 Rigs on the building berths

Self propelled Jackup by Great Offshore at Bharati Shipyard

2 x Jackup rigs by Essar Oil Field services at ABG Shipyard

All 3 rigs are built at Greenfield Shipyards

Both the Shipyards namely ABG Shipyard and Bharati Shipyard do not have prior rig building

experience

Great Offshore rig at Bharati Shipyard is running more than a year behind schedule, may get delivered

by end of 2011 Essar rigs at ABG Shipyard could get delivered in 2012


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Future Supply of Supply Vessels in India

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Above list excludes ships built by shipyards for themselves

Greatship (India) limited has committed a Capital investment of US$ 365 for ongoing fleet expansion

A new company with young fleet, subsidiary of Indias largest shipping company in private sector

Proposed IPO to fund future expansion

Samson Maritime has 3 ships on orderbookONGC ships are managed by Shipping Corporation, would be deployed in India for ONGC project

ONGC has ordered 12 ships to Pipavav Shipyard (A Greenfield Shipyard), delayed delivery likely

Shipping Corporation would deploy all its ships in India, most likely on ONGC projects

Calendar Years 2010 2011 2012 TotalQ2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Garware Offshore MSV 1 1 1Great Offshore MSV 1 1GreatShip (India) AHTS 1 1 2

MSV 1 1 1 1 4

PSV 1 1 1 3ONGC AHTS 1 1 1 1 2 2 2 2 12Samson Maritime PSV 1 1 1 3TAG Offshore AHTS 1 1Shipping Corporation AHTS 1 1 1 1 1 1 6Total 2 3 5 5 3 3 3 3 2 2 2 33


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Conclusion

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Offshore E&P

India is a lucrative market for service providers to Offshore oil & gas segment

ONGC should be the target client followed by Reliance, GSPC, CAIRN and others Firm investments in E&P is planned till 2012, post 2012 investments are likely to increase

Offshore Drilling

Demand for rigs to remain robust in India, especially above 100 m water depth

Very few local supply is in pipeline Rigs are mostly hired for 3 to 5 years by ONGC and Reliance

Companies such as (GSPC, CAIRN, ENI, etc) with smaller blocks (by number) hire it for short term on

per well basis

Offshore Logistics Demand for Offshore logistics is robust Demand supply gap is high A substantial number of supply vessels on building berth are likely to face delayed delivery


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Thank you for your Attention

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Mantrana Maritime Advisory Pvt. Ltd.A-207, Sai Chambers, Plot No. 44Sector -11 CBD BealpurNavi Mumbai - 400 614.Maharashtra, IndiaLandmark : Near CBD Station, Opp IDBI Bank Bldg.

Tel : +91-22-6609 8010Fax : +91-22-6609 8013Email : [email protected] : www.mantrana.in

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Opportunities for Service Providers in Indian Offshore