"THE BOTTOMLINE IS...
INDIA PROMISES TO PROVIDE UNPRECEDENTED OPPORTUNITIES THAT HOLD THE POTENTIAL TOSUSTAIN OUR GROWTH ASPIRATION OVER THE MEDIUM TERM."
I take great pleasure in penning down this statement as your Company stands at thethreshold of interesting opportunities which are unfolding in the geophysical space. Butbefore I delve into the opportunities our country provides I take this opportunity toprovide a brief synopsis of the financial year gone by.
Our performance in 2018-19 was not as good as we would have liked it to be especiallyon the backdrop of robust growth in revenue and profits in the preceding year. Our subduednumbers were primarily owing to an elongated monsoon which resulted in lesser operationaldays. This meant that our crews were idle our work was halted for a longer time durationand our billables reduced - which means our revenue is only postponed its not shrunk.
But I am not particularly disappointed because 2018-19 was an interesting year in termsof emerging opportunities. And this is increasingly relevant because it holds thepotential to enhance our growth momentum on a sustained basis over the medium term.
Oil & gas space
India which has set itself a target to cut its dependence on foreign oil to 67% fromthe current over 80% by 2022 has been keen on monetising its hydrocarbon reserves andbring in private players and foreign partners in the exploration and production space.This is evidenced in the policy announcements - first NELP followed by HELP (HydrocarbonExploration Licensing Policy) to Open Acerage Licencing Policy which holds the promise toattract players from across the globe.
Through these policies the area offered for exploration has more
than trebled - the acreage which stood at approximately 90000 sq. km. in 2017 wasenhanced to 150000 sq. km. after OALP I and would touch 210000 sq. km after OALP RoundII and III bidding exercises by May 2019.
What is interesting is that the private sector has taken a deep dive in India's oilexploration opportunity. Vedanta has won 41 out of the 55 blocks in OALP-1 bid round andanother 10 areas in the latest licensing round. They has committed about C3000 croreinvestment in seismic survey of these assets in the next 24-36 months. This is a hugeopportunity for the seismic survey business space.
Besides tenders from ONGC and OIL are also increasing owing to thier intensifiedefforts in the search for crude oil.
Currently work is happening at
14 basins in India simultaneously - this is the first time in the last -decade thatsuch intense survey is happening in the nation's basins. This trend could continue owingto the Government's unwavering focus on meeting its goals. Moreover if there is adiscovery in any one basin seismic survey work will intensify even more. Sector expertssuggest that if a discovery happens the volume of seismic survey done in the past coupleof decades will need to be done in the next 4-5 years.
At Alphageo we are at a unique position. From a position of doing whatever orders cameour way today we are hard-pressed to cherry pick the tenders to bid for.
Interestingly this is only one part of our excitement. There is more in store.
Search below the surface
India is a huge landmass. It is the seventh-largest country in the world with a totalarea of 3287263 square kilometres. And we are scarcely aware of what lies beneath thesurface - a miniscule patch of this expansive asset has been searched and that too forspecific resources. And when we ask the overarching question 'What lies beneath?'(in termsof all possible resources) we do
-''not have an answer - in reality we have not even scratched the surface.
-"The Central Government is cognizant of this reality and is workingaggressively to alter this situation. It is keen to know what lies beneath (resourcesminerals
etc.) every sq. inch of India's surface.
In keeping with this vision the Government is focused on undertaking a geophysicalmapping of the entire nation to get an understanding of every resource buried deep underthe surface of the nation. While the herculean task was being spearheaded by the somegovernment agencies not much headway has been made in India's underground search forwealth.
Now the Government has decided to replicate the model used for the exploring the oiland gas sector.
It started with a pilot project in the areas of minerals. Alphageo is spearheadingIndia's search for minerals with three orders in hand.
Interestingly the operating model for these new projects is quite similar to that ofseismic survey projects done by us the difference is the equipment and slightly alteredskill sets.
What this means for Alphageo?
One the successful implementation of these projects will open a new revenue verticalfor the Company which has the potential to sustain our growth momentum over the long-term.
Two Alphageo will feature among the few companies globally who will possess seismicand mineral exploration competencies - this could open global opportunities over themedium term.
Stepping into 2019-20
There is considerable excitement
among the team. While we will focus on completing the projects at hand on time wewill continue to capitalise on the growing opportunities emerging out of the Indianlandscape. Our combined efforts should help in improving our performance and deliveringvalue to our shareholders.
In closing I would like to thank our esteemed shareholders partners and otherstakeholders for believing in our story and reposing their confidence in our capabilityand extending their support in our long journey of endurance.
|Warm regards |
|Dinesh Alla |
|Chairman & Managing Director |