Mumbai, Dec. 21
LARSEN & Toubro is scouting for acquisitions or joint ventures through which it can obtain deep-water expertise to complete its capabilities in the hydrocarbons engineering sector.
Two recent mega contracts (each over Rs 1,000 crore) from Oil and Natural Gas Corporation as well its prequalification for various projects in West Asia have set it well on the hydrocarbon trail; the company expects that over the next five years 70 per cent of the revenues of its Engineering and Construction division will come from this sector, said Mr K. Venkataramanan, Member of the Board and President (Engineering and Construction Projects).
A lot of domestic action is expected on the hydrocarbon front with British Gas and Cairn Energy doing exploration, and with the Kakinada area rich with possibilities, perhaps even a future Gulf of Mexico equivalent for India, he said.
"But the Kakinada area means deep-water engineering and we are already building a team for it," he said.
In West Asia, L&T's Abu Dhabi office will start operations on January 15, when a senior executive vice-president will be relocated there.
Over the next two years, L&T is likely to land large contracts, with the company having prequalified for several projects in Qatar, Abu Dhabi and the Emirates.
Between 25 per cent and 35 per cent of the company's hydrocarbon revenues are expected to come from international projects, chiefly from West Asia.
It is also exploring options in Africa (where it is looking at World Bank-aided projects), Iran and Kazakhstan (where it has a presence) and neighbouring regions, assessing opportunities and risks.
"We expect things to happen in a big way over the next one-and-a-half years," said Mr Venkatarmanan. The L&T group vertical of hydrocarbons is an important arm, serving the upstream, midstream and downstream sectors.
To take care of the additional work, L&T recently acquired 100 acres at Hazira where it has a 200-acre complex.
The company is also augmenting talent. The E&C division has over 2,000 people whose skills are multidimensional and who are "horizontally transferable". Expansion is also taking place at the company's engineering centre in Bangalore and Delhi.
In Delhi, where the company will move to a new location in Faridabad by March, over 750 people will be hired over the next three years for hydrocarbons alone with some to be taken on for deep-water projects.
"Currently we don't have our own strength in marine installation and pipe laying; we outsource it. We are actively looking at acquisitions or partnerships in these areas."