Petronas Wants a Big­ger En­ergy Pie in In­dia

Malaysian govt-owned co to sign more long-term LNG sup­ply con­tracts & scale up lubri­cants busi­ness, to set up coun­try HQ in Delhi

The Economic Times - - Companies: Pursuit Of Profit - Ra­chita.Prasad@ times­group.com

Mum­bai: Malaysian gov­ern­men­towned Petro­liam Na­sional Ber­had, bet­ter known as Petronas, is look­ing to ex­pand its op­er­a­tions in In­dia by en­ter­ing into more longterm con­tracts for sup­ply of liq­ue­fied nat­u­ral gas (LNG) and scal­ing up its lubri­cants busi­ness. The com­pany, which has been in busi­ness with In­dian com­pa­nies for over two decades, is for the first time set­ting up its In­dia head­quar­ters for lo­cal busi­nesses in Delhi, and has ap­pointed a gen­eral man­ager to head it. Thus far, it only had dif­fer­ent se­nior ex­ec­u­tives deal­ing in spe­cific busi­nesses in the coun­try.

“In­dia is a very ex­cit­ing mar­ket for us, given its growth rate of 7% and that it is en­ergy deficit. It is our largest mar­ket for crude and that re­la­tion­ship will con­tinue. We are very bullish on petro­chem­i­cals, LNG and lu­bri­cant busi­ness in the coun­try,” Petronas pres­i­dent Wan Zulk­i­flee told re­porters dur­ing a visit to meet In­dian clients.

In­dia cur­rently ac­counts for around 3% of the com­pany’s global sales of $50 bil­lion, but the share is ex­pected to in­crease soon. Al­most 80% of its In­dia rev­enue is from the sale of crude oil. The bal­ance comes from LNG, petro­chem­i­cals and lubri­cants busi­nesses.

“Our lu­bri­cant busi­ness in In­dia is very small, growth and mar­ket share are both in sin­gle dig­its, but we want to tre­ble the busi­ness in the next five years,” Zulk­i­flee said. The com­pany has com­mit­ted $150-mil­lion in­vest­ment on ex­pand­ing its lu­bri­cant busi­ness, of which $50 mil­lion is be­ing in­vested in a man­u­fac­tur­ing plant to be com­mis­sioned by the first quar­ter of 2018. The rest would be in­vested on build­ing a dis­tri­bu­tion net­work and mar­ket­ing.

“The LNG mar­ket in In­dia is fast grow­ing and we have so far sold 15 car­gos in spot mar­ket. We want to sell more on a long-term ba­sis. The big­gest bot­tle­neck for LNG sup­ply in the coun­try is in­fra­struc­ture and we are look­ing at op­por­tu­ni­ties to build it to con­nect un­ser­viced mar­kets,” Zulk­i­flee said. The com­pany said it is scout­ing for op­por­tu­ni­ties to de­velop projects or ac­quire eq­uity stakes in re-gas­si­fi­ca­tion units and pipe­lines.

Zulk­i­flee said the en­ergy ma­jor’s global ex­ec­u­tive team vis­ited In­dia to meet non-en­ergy com­pa­nies in a first of its kind ini­tia­tive. He said in­ter­ac­tions with com­pa­nies like In­fosys, Bharti Air­tel and star­tups such as Paytm were en­cour­ag­ing, given their thrust in digi­ti­sa­tion.

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