Design and competency should get more weightage in award of big E&P projects: Bhaskar Patel
Jul 07: Tanzania-born Bhaskar Patel, managing director of TechnipFMC in India, has been steering the Indian operations of this global engineering and EPC giant, since 2015. A chemical engineer who graduated from London, Bhaskar has 30 years of international experience. He has been able to push the company from being largely a support centre for its global operations into becoming more India centric. Since he took over in 2015, the India Operating Centre has been able to win some significant contracts, and today as much as 15-20% of the new order intake of the Group in Offshore Business segment is expected from India. Internally Indian operations have been elevated to a global hub for TechnipFMC, with the other hubs in Rome and Paris.. The worst is hopefully over now for oil & gas based EPC companies, but even when the crisis was at its height, Patel was able to hold on to its 2700 strong workforce as other companies shed employees to cope with the downturn. Patel has been aggressively pushing for projects in India. One feather on the cap was the recent winning of two Rs 6000 crore each ammonia-urea projects in consortium with L&T. TechnipFMC also won HPCL's $300 million Hydrogen Generation Unit contract, and it is the PMC for IOC's Mathura and Gujarat Revamp and expansion projects as well as several other smaller projects. In a Q&A with this website, Patel answered questions on his Indian operations. Question: How do you think the Indian market has evolved ever since you have been in India? Unlike what may be the view from outside, I was thoroughly surprised to find that the Indian contracting system is not only entirely transparent but also very quick by global standards. We anticipate a rapid growth of the market and there are vast opportunities. In the next three years, our focus is on India and to acquire more business here. In the oil & gas sector itself, we see opportunities across the value chain. All oil marketing companies have expansion plans beyond the Euro-VI paradigm. There will be new downstream petrochemical and bio-ethanol capacities coming up as well as a couple of grassroots refineries in the pipeline. The Rajasthan refinery, HMEL's expansions, the West Coast refinery, the East Coast petrochemical complex, the CPCL refinery and also new fertilizer projects and some more prospects and expansions from private players. On the upstream side, new ultra shallow water finds in Kutch and Cluster 1 & 3 developments in KG-DWN-98/2 and exploration beyond Mumbai High will be areas of high interest. ONGC's collaborations with Chevron and ExxonMobil can see traction so will be further plans by the RIL-BP combine, all, eventually, leading to new contracts. The Indian market is growing rapidly and we see ample opportunity for us in India. Question: Is the Indian market competitive enough? My view is that Indian companies have the expertise now to take on the competition. And where they can't they tie up to fill up the gap. The level of competition is high even among global majors for a slice of the Indian business and the prices that are obtained from the bidding process are indeed very competitive by global standards. Question: How big are the Indian operations for you? India is very much our focus. We are targeting around $0.5 billion worth of business annually for now. Our Indian offices did 80% of the global group work earlier but this has turned. Our workforce of 2700 people now does 40% Indian centric work. In the next 3 to 4 years, I see India becoming more relevant. Question: What level of work are you looking at in India? Are you planning to go for smaller projects as well? We can go for smaller jobs, but only if there is a differentiator. A Rs 50 crore contract can be interesting for us, for example, only if there is a technology or a process differentiator in it, otherwise we are looking for bigger ticket sizes. Question: On the offshore front, where are you involved as of now? We are involved with the BP-RIL contracting process. We have been supplying umbilicals though not working as EPIC so far. Group company, Genesis, has been more involved. In KG-DWN-98/2, we have bid for the onshore part of the development. There are other opportunities coming up. Question: Do you see a difference in the contracting processes of RIL-BP and ONGC in the offshore KG developments? Every company has its own unique style of design and contracting. And every approach has its advantages and disadvantages. RIL has awarded its project, ONGC has not. Globally now, companies are allowing more competition at the design stage and then selecting the best design and contracting subsequently. However ONGC followed a different route. We trust design and technology competency should also have a significant weightage rather than awarding projects purely on lowest price. The concept of FEED competition common overseas can help. Question: Do you think Indian E&P companies have been able to take advantage of low equipment and service rates? Yes, some of the offshore projects could have benefited from it. Contracting needs to be hurried up whereever pending or some of the offshore developments may miss the low price envelope. Actually business is picking up now and that will reflect on quotes going ahead.