with Raghav Jindal, Managing Director, Jindal Drilling & Industries Ltd.
You were recently promoted to Managing Director of Jindal Drilling, which is one of India’s major Oil & Gas companies. What were the main challenges you faced in establishing yourself as MD at such a young age, and in running the business according to your beliefs?
I have been associated with the company for the past 10 years—so I was looking into various activities that were going on at Jindal Drilling for quite some time. Hence, it was not much of a challenge to be promoted to Managing Director. It was quite easy. I knew everybody in the organization, and was familiar with our way of working, and the business.
Now that you are MD, what are the main changes that you want to facilitate in the company?
We want to increase the number of jack-up rigs that we have running—we currently have five, and would like to increase our capacity there. We want to go ahead with directional drilling in a more focused manner.
And down the line, we will also look at E&P—bid for some blocks. That would be a major change in the business.
We see an impressive growth at Jindal Drilling in past two years. What would you say are the main drivers that have facilitated such growth?
4Q2008 and 1Q2009 have been milestone in Jindal Drilling when Two newly built jackup rigs, owned by Jindal Drilling’s JV companies, started operations in India. Both these rigs started well before the scheduled date and are doing quite well, the contracts were at very good rates. Jindal Drilling is the FIRST Indian company having deployed New Generation, Premium design rigs into service in India. During this period, our operations jumped from two jackup rigs to five jackup rigs.
Since the foundation of Jindal Drilling, we see that you have expanded your activities in the offshore sector. What are the most important frontiers in offshore for the company?
The upstream sector, plus more jack-ups, and maybe deepwater.
You are now running at full capacity. You have five rigs employed, and you have 22 directional drilling projects. How flexible are you in accepting new undertakings? How can you attend to new demands for your services?
We look for acquisitions of more assets, or maybe joint ventures with other companies (partnerships like the kind that we have with Noble at the moment). We are open to participating with various other companies around the world to bid for ONGC projects.
We are also looking into going international. We are focusing on Middle Eastern and South East Asian markets.
You highlighted a very important client of yours: ONGC. ONGC by itself constitutes a large share of the drilling market in India. But as the Indian Oil & Gas sector is diversifying, there are new players that are coming in, who are also potential clients for Jindal Drilling. Are you targeting these new companies?
Our recent focus has been on ONGC, but with the broadening of the market, we will be looking at partnering with various new entrants.
We are also bidding for tenders with some of the other already-established companies in the market: for example, British Gas, Cairn, and Reliance. We did a drilling project for Cairn in the past.
Do you see a challenge in attracting new partners, when your client list is in large part limited to ONGC?
We do not see any challenge. We understand the drilling requirements of other customers, and are ready to meet those requirements. Operationally, ONGC is as difficult customer as others; we are confident of handling their projects with ease as well.
You have said that you are looking to internationalize—for now, in Middle Eastern and South East Asian markets. What is your strategy to enter these markets, where the established competition is much stronger than in India?
In these markets, you have to come in through joint ventures. We are already established in India and we are doing very well here—so our reputation holds internationally. Our joint venture with Noble is also very well spoken about. In going abroad, we will use our reputation to gain partners.
What are the main guidelines of your partnership with Noble?
It is a win-win situation. We both participate in the operation and management of the rigs. At the end of the day, in this competitive environment, you have to have your costs down, while maintaining optimum utilization of the organization’s rigs. Fortunately, we have always enjoyed 100% utilization. In fact, none of our rigs have waited even a single day for a contract.
The Noble rig (first rig for Jindal Drilling’s venture in this hi-tech field and also it is the first rig for Noble also to operate internation ally) has been here since 1989, and has not waited a single day for a contract either. That speaks volumes.
When Focus Reports interviewed other Indian companies—not only PSUs like Gail and IOCL, but also private organizations like Jindal Saw and Shiv-vani—they have highlighted that even though international markets are now very welcoming to the Indian brand, there is still some level of prejudice towards anything “made in India:” a mentality of Indian products being more likely to have lower quality. What is your assessment of this statement?
It is very different in our case, because the rigs that the group own are the top-end rigs you will find anywhere in the world. So the product that we have is the best. And both these rigs are actually constructed in Singapore (at Keppel FELS shipyard – one of the world’s best) —so it is not Indian, but rather international.
What is the added value that you bring to these products?
The services that the company is providing. Our track record shows that we are number one, and that we do not waste time, energy, or money. There are various figures that show the safety factors, the way the rigs are deployed on time, the nature of staff training, etc., that can objectively back up these statements.
The quality of service that we give speaks for itself. The product is internationally accepted, and is the best in the country.
As a matter of fact, we have never dealt with any misperception, when going international, that our products are inferior.
The industry is very careful to avoid accidents now, especially after the disaster in the Gulf of Mexico. What kinds of investments is Jindal making to assure clients that their rigs will be free of any problems?
We have lot of safety aspects in-built, and a lot of monitoring through ERP, which is directly connected with various agencies who are monitoring the progress of the rig.
Our rigs, again, are top-end in terms of quality and design. They have all of the necessary safety features built in from the ground up—electronically, mechanically, and otherwise. We are more than equipped, I would say.
When you look towards the future, what would you say are your main ambitions and expectations for Jindal Drilling—especially, as you highlighted, now that the company is targeting new markets, while looking for new clients in the local market?
We will definitely be looking at increasing our jack-up rig capacity. We will look at land-rigs as well. E&P would be a major shift, and something we definitely target.
E&P is a long-term investment. We see a lot of potential in that sector—not only in Indian E&P, but also internationally. We are looking forward to some good acquisitions.
We are working one step at a time. E&P is, again, our long-term plan; but increasing our fleet in offshore drilling (mid-water and deepwater), assets on jack-up rigs, and going into onshore rigs, is more near-future. We have been in the drilling business for over two decades, so it is not new to us. We would like to diversify in the area where we already have expertise.
Do you have a final message to the international readers of Oil & Gas Financial Journal?
The market looks very attractive, and I am sure we are getting out of the slump. Prices are also potentially going to be very attractive quite soon. Jindal Drilling will target the international market, and look into acquisitions from abroad, while participating in quality partnerships. It looks like a bright future.
We just got an award from Forbes Asia, rating us as one of the top 200 companies on the continent that are under a billion in market capitalization. That was a great achievement for the company. The ratings criteria is not specifically provided, but some of the noted areas are growth opportunities in the future, services, profit margins, turnover, and etc. There were only 37 companies selected from India, and just two from the Oil & Gas sector.