The Elephant & the Dragon

Over the last decade, the oil consumption needs of India and China have increased exponentially. However demand outstrips supply in both the countries which has led to energy security emerging as a key focus area. In recent months both countries have been outbidding each other to acquire promising oil& gas reserves across borders, across continents.

China has emerged as the clear leader in this race on the strength of its vast capital reserves and availability of cutting edge oilfield services technology. Also at the macroeconomic level the Chinese government has been more aggressive in development of human potential for oil& gas sector as compared to the Indian government. So in this race for energy, how can India Inc. compete with China?

One word- talent.

India’s pool of technically proficient, English speaking engineers have been well utilized in the Business Process Outsourcing and technology offshoring industry. This very pool could be a potent weapon for Indian corporations in the oil & gas space as well. There are a couple of models for this:
• Indian IOCs (a rare bird, India based international oil companies, but I think we’ll start seeing more of these in the coming years) can use in-house talent to help drive and deliver on their international expansions. What would set them apart for other IOCs? Access to cost effective people and processes that they have perfected in their home country. Host countries and governments are looking for knowledge transfer, and this could be a vehicle for that.
• India based services companies can leverage the knowledge base and cost model to compete with other services organization, particularly in SE Asia and the Middle East. Schlumberger has already been sourcing top Indian field engineers for international deployment very effectively over the last decade
• International services companies could build centers of excellence within India. A good model to follow could be IT companies like IBM and Accenture who have built practice hubs in India to support worldwide service delivery. The growth in digitization of services to the energy industry is a trend that can lift a lot of boats in India.

Some forward leaning organizations have already started down this path. If the stars align over the next couple of years in terms of regulatory regimes, hydrocarbon prices and the broad demographic shifts in India, then India Inc. could be a force to reckon with in the global energy industry.