India: huge potential energy opportunities for Scottish companies

The Indian energy market has been targeted by both UK Trade & Investment (UKTI) and Scottish Enterprise for trade development during 2006/7. UKTI has led four successful inward and outward trade missions during this period, while Scottish Enterprise has carried out preliminary market research into energy opportunities for Scottish companies.

A few choice statistics confirm the thinking behind these agencies’ determination to make sure that British companies are kept aware of the opportunities looming in what has been to date a relatively low-key market for Scottish companies (India did not figure at all in the top 24 export markets identified by North East businesses in the 2006 North East Export Survey, for example).

India is already the world’s sixth largest consumer of oil and gas, importing around 75% of its requirements. But India is also the second-fastest growing economy in the world, and this is currently pushing up energy consumption by 3.5% per annum.

Accordingly, investment in India’s oil and gas sector over the next 25 years is forecast to run to over $110 billion, with the Indian government keen to attract foreign investment into the country.

One reason for this is that India remains one of the least explored oil and gas regions in the world, with a well density of 20 per 10,000 sq km. Of India’s 26 sedimentary basins, only six have been explored to date.

In recent years, however, the two Indian upstream public sector oil companies - Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) – have started serious surveying of previously unexplored areas, and for the next five years have plans in place to drill 309 onshore wells, 252 shallow water wells and 246 deepwater wells.

The Indian Government is currently trying to attract foreign investment into the country. India's sixth round of New Exploration Licensing Policy (NELP-VI) offered 55 blocks (25 onshore, 6 shallow water and 24 deepwater blocks) which are now underway.

Market visits

To make sure British companies are aware of the opportunities in the Indian oil and gas supply chain, UKTI organised a one-week market visit in August 2006 in August to Delhi, Ahmedabad and Mumbai, with a follow-up trip in February 2007 to coincide with the Petrotech Exhibition and Conference in Delhi.

Among the attendees was Atholl Menzies of Aberdeen Skills and Enterprise Training (ASET), who is bullish about the prospects for energy-related training opportunities in India.

“The people we met during the visit were key decision-makers, who had a keen interest in what ASET had to offer,” he reports. “During the visit and since my return, a number of attractive commercial opportunities have arisen for us as a result of our participation, and I am very optimistic that ASET can do good business in India.”

UKTI has also brought senior representatives from leading Indian oil and gas companies like ONGC, Reliance, Essar Oil and Oil India to the UK to discuss their requirements with likely suppliers.

In addition, specific opportunities for Scottish energy companies in the vast untapped Indian energy market were recently identified by Scottish Enterprise in a market research study.

These include the full range of goods and services from deepwater oil and gas developments, subsea technology and engineering, marginal field developments, training, education and competency assurance, brownfield projects, production optimisation and performance improvement to pipeline heating and insulation for high wax products.

Other areas of potential interest include seismic interpretation and analysis, high pressure/high temperature wells and production, drilling technologies, measurement and logging while drilling, improved visualisation techniques and seismic acquisition using electro-magnetic resistivity technology.

In the power generation field, areas for development include transmission and distribution, advanced super-critical coal technology, including retrofit of existing plant, consultancy support for plant life extension projects, consultancy support for siting of new hydro plants, and environmental impact assessments.

In addition, there are opportunities in areas such as tamper proof/smart electricity meters for domestic and commercial use, safety and disaster management training and reliability improvement techniques and practices.

Renewable energy

Finally, although the renewable energy market is at a fairly early stage, there is significant potential in the following areas: small-scale wind turbines for remote locations, large-scale offshore wind development, and marine energies - wave and tidal stream technologies - with interest having been expressed in demonstration projects underway in Scotland.

The Scottish Enterprise Energy Team is currently analysing these research findings and benchmarking them against Scottish supply capabilities, and a detailed report is under preparation for publication later this year.

UKTI has a number of market reports on India available at www.uktradeinvest.gov.uk. For North East businesses interested in accessing tailored market research, or taking part in future visits to India, support is available through the OMIS (Overseas Market Information Service) for a small charge – contact International Trade Adviser Karen Irving of Business Gateway International Aberdeen City and Shire for details at (tel) 01224 252208, email Karen.irving@scotent.co.uk