2nd Annual Offshore India Oil & Gas Summit,

Mumbai, 2010

Opportunities for Service Providers in Indian

Offshore

Anand V Sharma
Mantrana Maritime Advisory
Summary of Ongoing activity in the offshore E&P in India

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 Companies with large budgets for Offshore E&P - India

• Reliance Industries has been spending annually more

Discoveries by Company than US$ 2 billion on Offshore E&P activity
• ONGC has budgeted about US$ 16 billion to be spent on
Others Offshore
Mostly
13% domestic E&P activity between 2007-12
Offshore Reliance • Offshore to have substantial share
ONGC Industries
11% 36% • GSPC plans to raise close to US$ 1 billion from IPO
Offshore • Roughly 35% to 40% to fund its KG Basin
GSPC
• About 20% to 25% to fund its other E&P activity
18%
Cairn • Rest to settle previous debt
Energy Mostly
22% Onland • 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

Proposed development projects and ongoing

redevelopment projects in Offshore Oil & Gas Sector
Gulf of Cambay

Existing fields of Cairn

Mumbai Offshore

Discovery of ONGC,
Reliance, GSPC

Redevelopment of Mumbai
Offshore by ONGC
Source : DGH

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 India’s E&P companies

• 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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 India’s E&P companies

• 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

Ideally, the future projection of wells to be drilled should be estimated from the committed
MWP by E&P Companies. However, a more simplistic approach is as follows

Cumulative drilling depth in Offshore India (‘000) Number of Wells drilled in Offshore India
700 Future Projection
200
600 180

500 160
140
400 CAGR 14%
120
300 100
CAGR 15%
80
200
60
100
40
CAGR 8%
0 20
CAGR 7%
Fy -03 Fy-09 Fy-14 0
Fy -03 Fy-09 Fy-14
Exploratory Development
Exploratory Development
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 Drilling Fleet - India

Water Depth < 100 m

Drilling Rigs for Water Depth > 100 m
Discovery Hydrocarbons
Jagson
Precision Drilling
Northern Offshore

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 Demand for Rigs - India

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 1
Noble Drilling 1 1
Northern Offshore
Precision Drilling 1
Transocean 1 2 2 3 1

Aban Offshore 1 2 2 1
GreatShip 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

• 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

•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

Calendar Years 2010 2011 2012 Total

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Garware Offshore MSV 1 1 1
Great Offshore MSV 1 1
GreatShip (India) AHTS 1 1 2
MSV 1 1 1 1 4
PSV 1 1 1 3
ONGC AHTS 1 1 1 1 2 2 2 2 12
Samson Maritime PSV 1 1 1 3
TAG Offshore AHTS 1 1
Shipping Corporation AHTS 1 1 1 1 1 1 6
Total 2 3 5 5 3 3 3 3 2 2 2 33

•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 India’s largest shipping company in private sector
•Proposed IPO to fund future expansion
•Samson Maritime has 3 ships on orderbook
•ONGC 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

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 Conclusion

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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 About Mantrana

•Undertakes research & consultancy on the Indian Maritime Sector

•Undertakes economic advisory on the following maritime segments
√ Offshore Drilling & Logistics Sector
√ Shipbuilding
√ Shipping
√ Ports & Logistics

•Following are key services provided by Mantrana Team

√ Market Study
√ Project Feasibility Study
√ Business Plan
√ Bid Advisory
√ Due Diligence for investment

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 Thank you for your Attention

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