L&T plans to bid for more ONGC work after Daman win

Larsen & Toubro (L&T) expects state-run ONGC to finalise 3-4 projects worth around Rs 5,000 crore before March and would be bidding for them, the hydrocarbon head of the $17-billion engineering major said.

On Wednesday, L&T announced that its arm L&T Hydrocarbon Engineering has bagged an order worth Rs 1,150 crore for ONGC's Daman Development Project. The order will be executed by April and most of the revenue will be booked this year itself, a top company official said.

L&T's hydrocarbon order book is worth over Rs 20,000 crore of which 65 per cent is from international market, primarily the Middle East. "We always want to play an active role in the domestic market because it helps us to build our capability. ONGC has 3-4 tenders on the West coast, which are a combination of greenfield and brownfield projects. We are working on those tenders and the outcome will be out by the end of FY18," Subramanian Sar ma, managing director, L&T Hydrocarbon Engineering, told ET.

L&T would do the engineering, procurement and construction for the project, which is a part of ONGC's strategy to extract gas from Daman Field, situated in the south-western part of Tapti Daman block in Mumbai Offshore.

The decline in crude oil prices led to global energy majors slashing their capex, hurting order flows to companies like L&T. However, the company now believes that the industry has accepted a price range of $45-$60 for crude oil and is revising and reviving investment plans.

L&T has shifted its focus back to the domestic market where public sector units continue to invest on expansion even as things remain sluggish in the Middle East. ONGC alone has a capex plan of `30,000 crore for 2017-18. But some orders in the domestic markets are facing delays.

"There are some delays in ONGC's deep water projects. We hope we would conclude the tendering by the end of the second or third quarter, but now it looks like it will spill over beyond the fourth quarter. But it will go through even though it's technically a challenging project," Sarma said.

ONGC plans to invest $5 billion on developing deep-water oil and gas blocks in the Krishna-Godavari basin. The project was initially planned to start production by June 2019, but the schedule is now likely to get delayed.