Perspectives: Expansion taking shape steadily but strongly
Naresh Kumar, Jindal Drilling & Industries
by Linda Hsieh, assistant managing editor
Jindal Drilling & Industries, part of Jindal Group, one of India’s largest business houses, is brewing and implementing ambitious growth plans – newbuild jackups, deepwater drilling, directional drilling, global expansions, to name a few. But Naresh Kumar, managing director of Jindal Drilling, doesn’t take growth lightly. Along with group chairman DP Jindal, Mr Kumar wants to take their drilling business to new heights – but only with sure-footed steps.
Like many big corporations, Jindal Group had humble beginnings. It was started in the 1950s by five Jindal brothers as a very small pipe manufacturing company in Hissar, Haryana State. Over the years, it went from one mill to two to 10, then expanded into other businesses like steel manufacturing. By 1985, the group was large and respected enough that it was invited by the Indian government to join the drilling business.
At the time, though, the company had no idea what drilling was, or even what a rig looked like. “There was a brochure of a land rig and it said, this is known as a rig, and that’s how we started in 1985,” recalled Mr Kumar, who was able to use his mechanical engineering background to quickly get a handle on the business’ more technical side.
That was more than two decades ago. The company certainly knows drilling now, and has been continuously operating rigs in Indian waters for such long-time partners as Noble Drilling.
And, in late 2008, Jindal Drilling became rig owners themselves, with the delivery of two jackups – Discovery I and Virtue I – owned under joint venture companies. The rigs, which costs a total of approximately $400 million to construct, were built when ONGC ran into an acute shortage of offshore rigs in 2005. Not only that, but ONGC wanted only the best rigs with state-of-the-art technologies, Mr Kumar said. “So we took the lead at that time and immediately searched for the right shipyard and right design.”
They ended up selecting the KFELS MOD VB design and incorporated modifications to make it more suitable for the Indian drilling environment. And because they were supported by great teams, Mr Kumar said, both rigs were operational within hours of reaching their locations offshore Mumbai. There were small teething problems, he acknowledged, but nothing big enough to put the rig down.
With this positive growth experience under their belt, Jindal Drilling is on the alert for additional expansion opportunities. One market they’re aggressively exploring is deepwater “because that is another area that India needs,” he said.
India is believed to have significant untapped hydrocarbon potential offshore, especially in deepwater. And in recent years, New Exploration Licensing Policy (NELP) bidding rounds held by the government have made more and more offshore blocks available for exploration. That’s paved the way for such discoveries as Reliance Industries’ huge gas find in 2002 offshore India.
“We are looking for the right opportunities to collaborate with various international companies in different ways, maybe joint venture, maybe an operational arrangement… There are different options depending on the project,” Mr Kumar said.
Jindal Drilling also began providing directional drilling services in the early 2000s when they detected a trend in deviated and horizontal wells. They became the first Indian company to enter that market, and are working to introduce new technologies to Indian clients whenever possible, according to Mr Kumar.
According to Dr Lee Hunt, IADC president, Mr Kumar has been a longtime supporter of IADC, serving as the first vice chairman of the South Central Asia Chapter when it was created in 1998. This year he’s also serving on the IADC Executive Committee, the first Indian to be nominated for the committee. “IADC is fortunate to have the leadership caliber of Naresh Kumar as we grow into the 21st century,” Dr Hunt said.
Currently he is chairman of the Oil and Gas Services subdivision of India’s Confederation of Indian Industries. He’s also a founding member and current president of Petrotech Society, which holds one of Asia’s largest conferences every two years.