Few of us revisit institutions- academic or others- once we have graduated from them or left them for greener pastures. Most of us visit our old institutions of learning rather infrequently-- once to receive some award they may have deemed to give you and other times when you take your children and grandchildren to show them the corridors of education that shaped you. Other institutions, where you may have worked for some time, are not also usually on the beaten path. They tend to forget you as soon as you have left them.
So it was a particular pleasure when I was invited to visit Engineers India Limited (EIL) -- an organization I had left in 1979 after almost ten years. It was the first and the largest consulting company in Asia at that time and I had had some modest role in its development. So, if nothing else, it was good to be remembered.
I had just completed my book on "Pioneers of offshore technology in India" where EIL had played such a key role and the history of those days was still fresh in my mind. After the obligatory introductions by the chairman of the company, the assembled fifty or so managers and directors were keen to learn about the birth of offshore technology and how it had grown to be such an important part of the company in such a short period of time.
The fact was that starting from scratch in 1970, India had put together a committed group of young professionals, working with the best expertise the international industry to achieve its long-term objective - mastering offshore technology. By 1985- in just fifteen years, India had over 50 offshore platform off the coast of Bombay. It had discovered its largest oil and gas fields offshore and able to develop them within a short space of a decade. It had designed and built not only offshore well platforms, but also the most complicated and complex of process platforms that were able to separate oil and gas offshore and to transmit them to the shore. It had built a large number of major and minor submarine pipelines. It had developed an indigenous capability to design all offshore installations, which by 1985 was responsible for almost 80% of all offshore work. India had been able to convert three shipyards to build the latest offshore platforms and pipelines. It had over 20 offshore drilling rigs operating offshore, many of them owned and operated by Indians. These structures, most designed, fabricated and constructed indigenously enabled oil and gas production of over half a million barrels of oil and by the mid eighties and set the country towards self sufficiency. So it was a story worth telling...
I recounted the four turning points in the development of the offshore technology in EIL. The first one was how EIL started its journey into the offshore industry. In 1970, having just returned from the US with a doctorate in design of offshore systems, I was keen to engage in the creation of the industry in India. But I was met with cynicism and hostility. The chairman of ONGC advised me that “We are a nation of beggars and we shall remain a nation of beggars. We will never be able to do anything so complicated ourselves. Don’t waste your life here. Go back to America.” These words hurt to the quick and young as I was - I was but 32 years- I was determined to prove the cynical chairman wrong and build India's offshore industry from scratch. And I did, but it took me ten years.
Our first breakthrough came when Indian Oil Corporation decided to build an offshore oil terminal at Salaya, on the west coast of India. This would be the first major offshore installation in the country for the import of oil, and I was determined that OED should participate in its design and installation. In a meeting in the Planning Commission, its managing director, C.R Dasgupta, proposed building the Single Buoy Mooring (SBM) terminal. I raised an objection stating that other alternatives – and I reeled out at least six other kinds of terminals --needed to be considered as well as plans made for appropriate transfer of technology to India before a decision could be made. Over Dasgupta’s objections, the planning minister entrusted EIL with evaluating the various options prior to a decision being made. From that concept report grew the idea that EIL should act as the consultants to IOC and other oil companies in the selection, design, fabrication and installation of offshore systems, and thereby also ensure that the closely held technology in this area could be transferred to India. This was our first major offshore job and its success presaged a bright future for the team that I was building. But not all worked out well and even in the first year we encountered a failure that almost wiped out the team.
The "Sagar Samrat" incident could have easily sunk the EIL's fledgeling program before it had even fully taken off. The ONGC offshore jack up unit, Sagar Samrat, which was delivered in 1973, was to jack up at a location in offshore Bombay. To determine whether it was safe to do so, ONGC had appointed a French soil consulting company, TLM, to calculate the penetration that Sagar Samrat would have in the seabed. EIL had subcontracted with TLM to assist them in this project and to learn in the process. This was one of our first assignments with ONGC. TLM was using a measuring tool of their own-patented design and after field tests, had certified that the spot chosen by ONGC was safe. But when Sagar Samrat started lowering its legs at that location, the penetration was considerably greater than what was predicted. ONGC staff, who had never really liked the idea of EIL meddling in their affairs, let out a howl saying, “We told you so, that EIL does not have the competence in offshore area and should be kept out.” I argued that the work was done by TLM and EIL was only their subcontractor and if ONGC had any beef regarding technical competence, it should be with TLM and not EIL. Fortunately, Sagar Samrat had been moved a few thousand meters away and jacked up successfully by then and the furor died down. And when a few months later, the first exploration well turned out to be a discovery, perhaps the shift in location was a heaven sent gift, for this well led to the beginning of the Bombay High discovery and to the development of the OED team in EIL.
Over the next few years we continued to make progress in developing our capabilities in the offshore area in EIL. But the fact was that our team had little practical experience in actually designing new offshore installations required us to develop a new strategy. It was then that I came face to face with another facet of working in a developing country – no domestic company and certainly not the government owned public sector companies wanted to hire domestic consulting companies.
" It was Ezra Vogel who said"I wanted to understand the success of the Japanese in dealing with practical questions. My first inclination was to examine how such Japanese virtues like hard work, patience, self discipline, culture etc contributed to their success. But the more I examined the Japanese approach to modern organization, the business community and the bureaucracy, the more I became convinced that Japanese success had little to do with traditional character traits than with specific organizational structure, policy program and conscious planning, that successful management organizations and style are not the result of some cultural pattern or historical inevitability but are the result of good corporate planning, proper management structure and the most effective leadership."
So it was a particular pleasure when I was invited to visit Engineers India Limited (EIL) -- an organization I had left in 1979 after almost ten years. It was the first and the largest consulting company in Asia at that time and I had had some modest role in its development. So, if nothing else, it was good to be remembered.
I had just completed my book on "Pioneers of offshore technology in India" where EIL had played such a key role and the history of those days was still fresh in my mind. After the obligatory introductions by the chairman of the company, the assembled fifty or so managers and directors were keen to learn about the birth of offshore technology and how it had grown to be such an important part of the company in such a short period of time.
The fact was that starting from scratch in 1970, India had put together a committed group of young professionals, working with the best expertise the international industry to achieve its long-term objective - mastering offshore technology. By 1985- in just fifteen years, India had over 50 offshore platform off the coast of Bombay. It had discovered its largest oil and gas fields offshore and able to develop them within a short space of a decade. It had designed and built not only offshore well platforms, but also the most complicated and complex of process platforms that were able to separate oil and gas offshore and to transmit them to the shore. It had built a large number of major and minor submarine pipelines. It had developed an indigenous capability to design all offshore installations, which by 1985 was responsible for almost 80% of all offshore work. India had been able to convert three shipyards to build the latest offshore platforms and pipelines. It had over 20 offshore drilling rigs operating offshore, many of them owned and operated by Indians. These structures, most designed, fabricated and constructed indigenously enabled oil and gas production of over half a million barrels of oil and by the mid eighties and set the country towards self sufficiency. So it was a story worth telling...
I recounted the four turning points in the development of the offshore technology in EIL. The first one was how EIL started its journey into the offshore industry. In 1970, having just returned from the US with a doctorate in design of offshore systems, I was keen to engage in the creation of the industry in India. But I was met with cynicism and hostility. The chairman of ONGC advised me that “We are a nation of beggars and we shall remain a nation of beggars. We will never be able to do anything so complicated ourselves. Don’t waste your life here. Go back to America.” These words hurt to the quick and young as I was - I was but 32 years- I was determined to prove the cynical chairman wrong and build India's offshore industry from scratch. And I did, but it took me ten years.
Our first breakthrough came when Indian Oil Corporation decided to build an offshore oil terminal at Salaya, on the west coast of India. This would be the first major offshore installation in the country for the import of oil, and I was determined that OED should participate in its design and installation. In a meeting in the Planning Commission, its managing director, C.R Dasgupta, proposed building the Single Buoy Mooring (SBM) terminal. I raised an objection stating that other alternatives – and I reeled out at least six other kinds of terminals --needed to be considered as well as plans made for appropriate transfer of technology to India before a decision could be made. Over Dasgupta’s objections, the planning minister entrusted EIL with evaluating the various options prior to a decision being made. From that concept report grew the idea that EIL should act as the consultants to IOC and other oil companies in the selection, design, fabrication and installation of offshore systems, and thereby also ensure that the closely held technology in this area could be transferred to India. This was our first major offshore job and its success presaged a bright future for the team that I was building. But not all worked out well and even in the first year we encountered a failure that almost wiped out the team.
The "Sagar Samrat" incident could have easily sunk the EIL's fledgeling program before it had even fully taken off. The ONGC offshore jack up unit, Sagar Samrat, which was delivered in 1973, was to jack up at a location in offshore Bombay. To determine whether it was safe to do so, ONGC had appointed a French soil consulting company, TLM, to calculate the penetration that Sagar Samrat would have in the seabed. EIL had subcontracted with TLM to assist them in this project and to learn in the process. This was one of our first assignments with ONGC. TLM was using a measuring tool of their own-patented design and after field tests, had certified that the spot chosen by ONGC was safe. But when Sagar Samrat started lowering its legs at that location, the penetration was considerably greater than what was predicted. ONGC staff, who had never really liked the idea of EIL meddling in their affairs, let out a howl saying, “We told you so, that EIL does not have the competence in offshore area and should be kept out.” I argued that the work was done by TLM and EIL was only their subcontractor and if ONGC had any beef regarding technical competence, it should be with TLM and not EIL. Fortunately, Sagar Samrat had been moved a few thousand meters away and jacked up successfully by then and the furor died down. And when a few months later, the first exploration well turned out to be a discovery, perhaps the shift in location was a heaven sent gift, for this well led to the beginning of the Bombay High discovery and to the development of the OED team in EIL.
Over the next few years we continued to make progress in developing our capabilities in the offshore area in EIL. But the fact was that our team had little practical experience in actually designing new offshore installations required us to develop a new strategy. It was then that I came face to face with another facet of working in a developing country – no domestic company and certainly not the government owned public sector companies wanted to hire domestic consulting companies.
“Look,” one of the chief executives of an Indian public sector company
explained to me, “I am responsible for quality and cost of all major
investments and design, and engineering costs are generally less than 10% of
the investment. By hiring your company, I may save perhaps 1%, which while
large is really insignificant in terms of the total projected investment. But
if anything should go wrong – a design mistake, an equipment failure due to
your inexperience - the cost to my company would be huge. And worse, the same
self reliance crowd today urging me to develop domestic capability will be
braying for my blood! If I were, however, to hire the best international
consultancy company, I would pay a higher fee but if anything went wrong, at
least I would not be pilloried and investigated by the parliament. So, quite
frankly, there is really no incentive for me in the present system to promote
domestic design or engineering competence.”
Recognizing these limitations, we formulated a different strategy- we would buy this experience and expertise by associating with an international consulting company in the initial stages and gradually take over the entire design effort over time. With a staff of 130, we became involved in designing three to six platforms per year, accounting for a turnover of over $7 million and in the short space of ten years, not only managed to acquire and digest this high technology, it also set up an aggressive R and D program.
Bombay High North process platform was the key component of the offshore system and we were keen to be awarded the contract for designing it. With the help of the chairman of ONGC, we were finally given this assignment if we could find an international consultant to review our designs and provide us technical assistance. We soon ran into problems as the staff of ONGC, hostile from the beginning and with knowledge only of the onshore oil industry started making demands on the specifications of design. The chairman finally put his foot down and we were instructed to provide an international level process platform rather than an onshore hybrid. This led to a development that all installations were to be of international standards in the future- a decision that has served the country well.
By the end of the decade, we had become the chief designer of all offshore installations in the country.
Now came the question and answer session:
"What was the most important decision you made in the creation of the capability?" asked one
" To put together a team of the best Indians in the world"
"How did you deal with difficult clients?"
'By understanding the pressures they were under and formulating strategies that answered their concerns"
" How did you use international consultants?"
" We developed a long term strategy of working with international consultants where our process of learning was gradual and where we only replaced them when our team was fully ready."
"They say that Indian institutions are incapable of successfully managing complex technology. What is your view?"
Recognizing these limitations, we formulated a different strategy- we would buy this experience and expertise by associating with an international consulting company in the initial stages and gradually take over the entire design effort over time. With a staff of 130, we became involved in designing three to six platforms per year, accounting for a turnover of over $7 million and in the short space of ten years, not only managed to acquire and digest this high technology, it also set up an aggressive R and D program.
Bombay High North process platform was the key component of the offshore system and we were keen to be awarded the contract for designing it. With the help of the chairman of ONGC, we were finally given this assignment if we could find an international consultant to review our designs and provide us technical assistance. We soon ran into problems as the staff of ONGC, hostile from the beginning and with knowledge only of the onshore oil industry started making demands on the specifications of design. The chairman finally put his foot down and we were instructed to provide an international level process platform rather than an onshore hybrid. This led to a development that all installations were to be of international standards in the future- a decision that has served the country well.
By the end of the decade, we had become the chief designer of all offshore installations in the country.
Now came the question and answer session:
"What was the most important decision you made in the creation of the capability?" asked one
" To put together a team of the best Indians in the world"
"How did you deal with difficult clients?"
'By understanding the pressures they were under and formulating strategies that answered their concerns"
" How did you use international consultants?"
" We developed a long term strategy of working with international consultants where our process of learning was gradual and where we only replaced them when our team was fully ready."
"They say that Indian institutions are incapable of successfully managing complex technology. What is your view?"
" It was Ezra Vogel who said"I wanted to understand the success of the Japanese in dealing with practical questions. My first inclination was to examine how such Japanese virtues like hard work, patience, self discipline, culture etc contributed to their success. But the more I examined the Japanese approach to modern organization, the business community and the bureaucracy, the more I became convinced that Japanese success had little to do with traditional character traits than with specific organizational structure, policy program and conscious planning, that successful management organizations and style are not the result of some cultural pattern or historical inevitability but are the result of good corporate planning, proper management structure and the most effective leadership."
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