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Interview

with Parmjit Singh Nayyar, Country Manager, Oceaneering India

17.06.2011 / Energyboardroom

Oceaneering is recognized within the Oil and Gas (O&G) industry as an international company with a global reach, where locations are strategically chosen to develop specific divisions as center of excellences according to the country’s main comparatives advantages – e.g. Aberdeen for inspections services. What does India have to offer?

Just like you said, we have always gone for strategic locations, and in fact India is a standalone location. The country has a lot of open future for oil and gas and that is why India was selected. The country currently makes a significant contribution to the growth and Oceaneering is also very keen on India for the future.

The company is such a diverse company with an unbelievable number of product streams. What is the main focus in India?

The Indian affiliate is mainly ROV – remotely operated vehicles – plus a division called Deep water Technological Solutions (DTS). DTS and ROV make a very good combination. Like ROV on its own is good enough for exploration. But it is the tooling and the solutions sub-sea that really enhance our presence here. These are two of the main focus and then we also supply Umbilical and Pipe line repair connectors.

There is a pipeline repair system division, which manufactures sub-sea connectors where if a pipeline is leaking you can join it by simple diver operations and without any cutting or welding That is another very successful venture we have.

When you mention DTS and ROV have been successful here, is it manly due to the size of the market or to the fact that you are a specialized company?

Deepwater Oil Exploration requires ROV. But there are plenty of companies around. You can be an ROV company like Oceaneering with more than 250 ROVs and even a ROV company with three ROVs. But in today’s market, for any professional client – let us say Reliance or ONGC, the deepwater drilling spread will cost you nothing less than $800,000 to $1 million a day. So who will they go for? They will of course go for number one. They might have to pay more but they know that this is the company that will be best suited.

You mentioned your partnership with ONGC, so could you tell our readers a bit more about this collaboration?

When I first took over this division in India, we had two ROVs working in very shallow water for ONGC. They were not direct, we were using Dolphin Off-shore. But when I took over I wanted to work directly with ONGC and so after expiry of those contracts we quoted directly and won the contracts. Since then we have been working continuously with ONGC, one of our major clients. In fact right now they have most of their deepwater rigs operating Oceaneering ROVs. And they are doing completion work in one of their rigs with our ROV and tooling equipment and experts.

Is deepwater the biggest focus of the company?

Wherever there is deep water – Oceaneering comes in. In fact just a couple of months back we broke the deepest industry dive recorded in the world – 3,107 meters. And it was an all Indian team.

You would say that deepwater is your main differentiation factor today within the industry?

Not only deep water; even when it comes to shallow water. Let’s say where divers cannot go we come in. We are the kind of company that can support any type of operation. For any kind of difficulty we come up with a solution.

Generally how do you evaluate the Indian companies in operational waters – Reliance and ONGC – their knowledge on deep water? How good are they technology wise and in applying your own technology?

Both are good in their own sense and in deep water they have to apply the best experts. They go for the best companies. Of course in Reliance there is a bit more play and they do not need to follow very strict rules and regulations. Both have a standard list of suppliers which are top of the market. So when they contract them they know that the job will be done. Both are our esteemed Clients and we provide them with our latest expertise.

How important is it to have a business that stands on different legs or partnerships? How do you choose your partners?

I cannot choose my partners; it is the partner who chooses us. I cannot go to them and say take my ROV. When they need our equipment they call us. But as I was mentioning, initially it was only ONGC which had two shallow water drill ships and we were operating for them.

The breakthrough or the revolution came in 2002 with the arrival of the rig called Discover 534. Two things happened. Number one, the Discover 534 came in India, and number two, in the first well itself, it got the biggest find in Asia. It was a huge gas find which now you know is completed and flowing. So that is what gave a very good flip to the Indian market. After that anyone and everyone who could afford it was drilling. Before that it was quite staid and not so exciting.

To move a bit about the future prospective, in 2011 there will be much more capital spending looking at the overall group. To what extent will the Indian operations benefit from this increase in capital spending?

Of course India is going to benefit from it. Initially we used to have very shallow water ROVs and the systems were not really so state-of-the-art. But right now we are getting the machines which are just coming out of the assembly line and there are very few machines in the industry with the specifications that we have right now on two of our rigs. These are Millennium systems with a 4,000 meters depth capability. So we are taking the lion’s share of the technical development. And we need it. ONGC and Reliance; when they spend a huge amount of money on rigs, they do not want to go with old machinery, but rather with latest machinery best suited for their needs.

These are difficult operations and they require the best. And we have to give them the best.

What about adapting your premium resources? How quickly can India go from basic equipment to more sophisticated tools?

This is where we score the best. In fact this has been my strength in keeping us above the average supplier. As I told you my background is from the navy, and we have a branch in the navy called artificers since the days of the British Navy. In Navy artificers are the brains working on different equipments in Electrical, mechanical, aeronautical, engine rooms etc.

When I joined we had all expats. And with expats it was not only a question of qualification – they were quite good but we had a lot of trouble with visas and security clearances and flights. And when you want to mobilize someone at short notice you could not.

So I asked the head of Oceaneering Asia Pacific that why don’t we try the Indians from the Artificer branch of the Indian navy? He agreed. You see it was not somebody he had tried before and he was skeptical but these guys proved a major success. As a result, today we have 116 Indian crew. And they are the ones operating on these state-of-the-art ROVs.

All from the navy?

No. Now we have 75-25 mix. After seeing the success of this we started recruiting graduates engineers from the colleges. And under the guidance of these ex Indian Navy seniors these youngsters are doing extremely well. We also have the only Indian Lady ROV Pilot from all of Asia.

Oceaneering has a very good in-house training program that separates us from the others. Oceaneering ROV personnel are the best trained in the industry Oceaneering International; Inc. opened the world’s first Work-Class ROV Training Center in 1996. Expanding far beyond the original site in Morgan City, Louisiana full training centers with simulators are also located in Norway, Scotland, Brazil, and Indonesia.

The training centers house multimedia-equipped classrooms, electronics and hydraulics laboratories, and a fully functional ROV with a complete control suite. Much of the curriculum focuses on the ROV simulators used for pilot training. Working at the simulator console, trainees learn basic flying skills and experience many of the challenges of offshore operations – before they are ever sent on their first jobs.

Would you say that discipline and technology are the most important factors?

The defense and ex-navy guys do not have to get used to living in the sea, so they have no issues staying off shore. And also they have discipline. They have 15 to 20 years of disciplined service when they step out of the navy. They are the best choice for our industry. Just like fish to water.

Is there a skill shortage?

There is no shortage of skills in India. It is how you train them and how you nurture them. How you look after them and retain them: that is what matters.

How challenging was it to establish your brand and your technology in India? And what is the level of technology you are bringing in?

We are not going to play half hearted here. We have had very good support right from my first boss, Harold Robert, Andy Atkinson and now Martin McDonald. When I asked Andy: I know Harold was keen on India but why you? And he said I could read the numbers and see that India has great potential. Oceaneering management is supporting India in every way. We had visits from CEO, and all the senior Vice Presidents. Kevin McEvoy who will be taking over as President and CEO very soon, is very keen on India and visited us numerous times.

Now we have opened a technology center in Chandigarh employing 185 staff. We have a ROV support Centre there that provides 24 hours, seven days a week point of contact for all ROV systems operating worldwide. They also log and analyze all equipment failures, collect data on ROV specifications as well as track the age and certification of major components. The data they collect is used to generate reports for operation, technical and commercial departments which allows us to provide an improved service to Customers. Chandigarh office also provides engineering analysis, Global IT support and other similar services. So as I said, everyone is very supportive and bullish with India.

What would you like to achieve in the near future? What are the next projects that you are trying to look for?

I like to have every project that comes up in India. I don’t like to let anything go. Our strength lies in technology. The brand name as you mentioned. I did not have to establish it as it was already there. I do not have to go and tell people who and what Oceaneering is. In fact the first time I went to Reliance and introduced myself they already know Oceaneering. So as I said, I did not have to sell the brand but I had to put in a lot of effort to make sure that I keep up the brand name.

The most difficult part here is that the operational areas are extremely remote. If I need a spare and even if I have it handy in Singapore or Louisiana it will still take me at least 10 days to get it on site.

Far away locations were in fact the biggest challenges. So we overcame it by storing enough spares in our warehouse in Kakinada. We also established a guest house for our employees; so they have comfortable living and fine food. And in case of urgent mobilization they are just an hour’s drive from the helicopter base.

Customs and import regulations in India are not at all bad. There are worse countries than India. In fact it is quite good compared to many other countries as customs here have specific procedures to get material into India.

What is your final message?

India is a good place to work. We have been successful here and so can be other companies.

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