L&T Hydrocarbon eyes $1 billion worth projects in offshore business

L&T Hydrocarbon Engineering CEO Subramanian Sarma says most of investments are likely to come from the public sector as it has a higher ability to spend

Photo: Priyanka Parashar/Mint
Photo: Priyanka Parashar/Mint

Mumbai: Larsen and Toubro Ltd (L&T) expects the domestic offshore oil and gas industry to attract nearly $5 billion investments over the next four-five years, and is hopeful of bagging contracts worth $1 billion in the segment, a senior company official said.

The company’s wholly-owned subsidiary L&T Hydrocarbon Engineering Ltd, which provides complete engineering solutions for the offshore oil and gas industry, is eyeing to win at least $1 billion worth contracts in the next 2-3 years.

“Hydrocarbon industry is currently going through a difficult period. At $40-50 a barrel, capital expenditure has reduced across the globe though there is lesser impact on gas development,” L&T Hydrocarbon Engineering chief executive and managing director Subramanian Sarma told PTI.

It gets even more difficult for deep-water players as the development cost is higher, he added.

“However, with domestic market poised to improve, especially on the back of the Make In India initiative of the government and other programmes, we hope the sector will attract nearly $5 billion investments in the next 4-5 years. Given our capabilities, we hope to bag nearly $1 billion worth contracts in the next 2-3 years,” he said.

Sarma said most of investments are likely to come from the public sector as it has higher ability to spend. “There are very few private players who may also embark on new development and between private and public investments, we should be able to capture a reasonable size of market,” he said.

In the offshore oil and gas industry, the company provides turnkey solutions, combining customised engineering, procurement, fast-track project management and world-class fabrication and installation capabilities.

LTHE has also tied up with international firms like GE and McDermott for deep-water projects on the east coast of India. With McDermott, L&T is executing a Rs.2,450 crore order for the Vashishta deep-water greenfield development.

It has partnered with GE for manufacturing sub-sea manifolds to be used in deep-water projects in the Krishna-Godavari basin.

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