Primary Objective

Executive Summary

Primary objective of this study is to understand the business prospects of having L&T Upstream Division's Own Marine and Transportation & Logistic Unit, for Offshore Structures.

Initially the focus will be starting off as Import substitution for existing upstream vertical and then expanding the Barge and Tug vendor in domestic and foreign market.

L&T Upstream is in to EPIC industry in offshore Oil and Gas platforms, having a project life cycle of typically 18 months, where complete engineering , procurement, fabrication , offshore transportation and installation of offshore modules is executed.

The Value chain and the in-house capacities of L&T Upstream are explained:

* Detail Engineering -

o Carried out in L&T Valdel, Fully Owned Engineering Subsidiary.

* Procurement -

o Done by L&T Powai , Separate unit catering to all projects Jointly

* Fabrication -

o L&T had three Fabrication yards to cater to the requirement of offshore projects (1) L&T Hazira , Gujarat (2) L&T Katupalli, Tamil Nadu (3) L&T Sohar , OMAN

* Load out -

o This aspect is usually in Yard Scope

* Transportation

o No In-house capability ( Barges and Tugs owned by L&T)

* Offshore Installation-

o L&T has an Offshore vessel, LTS 3000, in JV with Sapura Acergy.

This need of having Own marine and transportation & Logistic Unit is chose based on its dire need to cut costs in L&T upstream business and later this business has an excellent capability to grow in domestic as well foreign markets as it can ass steady stream of revenues for the initial years by catering to Upstream divisions steady requirement and ten establishing by capturing the domestic market where it has practically no completion. For the expansion phase if the business it can then expand their service to the Middle East and the Australian markets where there is boom in oil and gas industry and is likely to grow over the decade.

The study also reveals that the whole industries growth will be increased due to investments in oil and gas, petrochemical, power etchant the companies are perfoming well due to facet of increasing technological improvements around the globe.