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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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