Essar Oilfield Services eyes 20% rise in revenues at Rs 3.6 bn in FY19

Public and private sector firms are stepping on gas to explore and produce more oil and gas as they look to meet PM Modi's target of cutting import dependence by 10% by 2022

Essar Oilfield Services Ltd is eyeing a 20 per cent jump in revenues next fiscal as the country's focus on raising domestic output propels a stagnant rig hire market.

The company, which owns 16 rigs used for drilling of oil and gas, is expected to end the current fiscal with a revenue of Rs 3 billion, up from Rs 1.05 billion in the previous year, its CEO Rajeev Nayyer said.

"In the next fiscal, we are expecting a 20 per cent rise in revenues to Rs 3.6 billion" as more of the company's rigs are hired by explorers, he told PTI.

Of the 16 rigs it holds, 15 are on-land drilling rig and one is submersible rig. Three of the on-land rigs are in Dubai and out of the remaining 12, the company expects at least eight to be hired by explorers, the CEO said.

The company's offshore semi-submersible rig, the Essar Wildcat, is already deployed on a three-year contract with state-owned Oil and Natural Gas Corp (ONGC) since May 2017, Nayyer added.

Public and private sector firms are stepping on gas to explore and produce more oil and gas as they look to meet Prime Minister Narendra Modi's target of cutting import dependence by 10 per cent by 2022.

India currently imports over 80 per cent of its oil needs.

Nayyer said three of the land rigs are in operation through contracts with Oil India Ltd (OIL) and Mercator Petroleum, and another five are likely to be placed next fiscal.

"More contracts are under negotiation," he said, adding that the company is benefiting from upswing in the country's upstream sector.

"We are close to signing more contracts with clients, both new and old so FY 2018-19 will also see us growing our revenues further to Rs 3.6 billion," Nayyer said.

The current fiscal, he said, has really been a landmark year for the company with a turnaround in revenues after commencing drilling for contracted clients.

"There is an upswing in exploration activity in India, and we are glad that we have the expertise and resources to support the prime minister's call for increasing domestic crude production, thus ensuring the country's energy security," he said.

Asked about rig hire rates, he said rates have bottomed out and the company's rigs are commanding "decent" price.

He, however, neither disclosed the rig hire rates or the company's profitability.