Clough in India for long haul

WHEN the Department of Foreign Affairs and Trade Economic Analytical Unit released its “India: new economy old economy” report in Perth last week, Clough Offshore was happy to speak of the company’s experience in India.

Clough’s three-year history in India began with a data collection and fact-finding mission, and has continued with the awarding of three major construction contracts for gas well-head platforms, pipelines from field to shore and onshore processing facilities.

The first of these, Clough Offshore project resources group manager Phil Stewart described as a baptism of fire. The project, on behalf of Indian public company Oil and Natural Gas Corporation, was disrupted by the early onset of the monsoon season, with significant cost and schedulling consequences.

However Mr Stewart said the outlook for the energy industry in India was a good one, with all oil production consumed by demand, Indian Government talk of storage facilities for a six months buffer supply of oil and of liberalising retail fuel outlets.

Clough Offshore has faced some significant challenges in its short time in India. Insufficient infrastructure - particularly to support projects outside of city areas and in remote locations – a slow bureaucracy, currency repatriation issues, restrictions on importing refurbished materials and difficulties obtaining export certificates to get project equipment back out are just some of these.

But with a population of one billion and a growing economy, India offers a burgeoning market - in particular a large resource market - and Clough is keen to continue to do business in the region.

Gross revenue from Clough Offshore’s first three Indian contracts, the first completed, the second at commissioning stage and the third commencing just last month, is estimated at US$120 million, with gross profits up to 18 per cent on that amount.

Worldwide, the offshore oil and gas industry is moving into deeper water and Clough Offshore is already well-positioned in this market gaining significant contracts in the past 18 months, including some in hot-spot, the Gulf of Mexico.

India is considered a comparatively aggressive part of this deepwater market, which Clough believes will grow considerably in the next five years.

The Clough group is, however, not limiting its outlook in this context to the development of long-term relationships between Clough Offshore and major energy groups ONGC, Cairn Energy and Reliance. Through Clough Engineering, the group is hoping to be involved in major Indian infrastructure projects also.

Hence Clough has recently appointed a national manager in India, to support all Clough’s projects, develop a long-term business strategy and look at establishing a regional office there.

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