Whither Enterprising Young Exploration and Production Professionals?
Insight into India's oil and gas history, entrepreneurship, and his own success from Raj Kanwar, founder of SK Oilfield Company.
The United States’ first driller, “Colonel” Edwin L. Drake, was not a petroleum engineering graduate. Not only were such studies unheard of then, but the petroleum industry as we know it today did not exist. He had no oil well drilling qualifications because he was to become one of the first individuals to undertake what was then an unknown venture.
Drake was picked up in 1857 by a group of American investors in their newly formed Pennsylvania Rock Oil Co. partly because, as a retired railway conductor, he had free access to the railways. Drake was not even a colonel; his employers gave him the title to make him sound impressive. He was at best a jack-of-all-trades, though he apparently had an uncanny gift of the gab, and could probably even sell ice to Eskimos.
In India, too, as early as the 1850s the dispatches of some British Army officers, such as Lieutenant R. Wilcox, Major A. White, and Captain P.S. Hannay in the Brahmaputra Valley’s rainforests in Assam, spoke of oil exuding from river banks and traces of bubbly gas.
The actual discovery of oil seeps in Assam was made in 1869 by a company not even remotely connected to oil—the Assam Railways & Trading Company—and in 1889, it was this very trading company that drilled its first oil well, which discovered India’s oldest still-producing oil field.
Nonpetroleum ONGC Pioneers
With a few exceptions, the pioneers who were the nucleus of India’s Oil and Natural Gas Corporation (ONGC) when it was formed in August 1956 were largely from nonpetroleum backgrounds.
The first chairman, K.D. Malaviya, possessed a degree in oil technology but this actually referred to vegetable oil.
Almost all the early stalwarts were on deputation from the Geological Survey of India with expertise in geology and geophysics. The first eight drillers were all engineering graduates. Likewise, the first 130-odd young pioneers, recruited by ONGC through India’s Union Public Service Commission, by and large comprised postgraduates in geology and physics. Most of them later rose to occupy senior positions in the organization.
The fact that oil men in those days came from nonpetroleum backgrounds was not a matter of choice but necessity. Undoubtedly, it was very creditable for those pioneers to have adapted so well to their rough-and-tumble environment. Those ordinary men worked hard and learned quickly as if born to the job. It is no wonder that many of them later became legendary, with tales of their daredevilry and quick wit told and retold in oil fields all over the country.
Today’s Petroleum Job Market
Today, several universities and institutes in India have programs teaching petroleum engineering and its related subjects. Examples include the Indian Institute of Technology Madras, the Indian School of Mines, the Maharashtra Institute of Technology, Pandit Deendayal Petroleum University, and the University of Petroleum and Energy Studies. Such programs exist all over the world.
There are studies tracking the annual number of US petroleum engineering graduates and postgraduates. However, there is no reliable information of this nature available on a worldwide basis.
While the annual number of US petroleum engineering graduates and postgraduates is somewhere between 1,000 and 2,000, it would appear that worldwide the number is many times higher.
Petroleum job opportunities worldwide have grown enormously. For example, in India in 1956 there were only two exploration and production (E&P) companies operating in India—Oil India Limited and ONGC. Today, there are nearly 30 E&P companies in India, along with several multinational and overseas contractors working offshore. Therefore, there are now many opportunities available in existing companies in India for petroleum universities’ and institutes’ young graduates and postgraduates.
The question now is, What are the prospects in India’s growing oil and gas industry for YP entrepreneurs? Entrepreneurial skills are not picked up at university; these are mostly ingrained or acquired later.
By definition, an entrepreneur is an individual who takes initiative to organize a business in order to benefit from or take advantage of an opportunity. In other words, he or she starts a business, invests money, assumes all the risk, and then reaps the resulting reward if everything goes well.
There are of course many examples of first-generation entrepreneurs making it to the top of the business charts in India and elsewhere. But then there may be 10 failures per solo success amongst the new entrepreneurs.
However, this is not to say there are no prospects for a determined YP entrepreneur. A few opportunities exist in numerous oilfield services but then one has to possess the requisite staying power and deep pockets. It is rare for YPs straight out of university to start an enterprise on their own unless they are savvy enough to put together a group of experienced and dedicated professionals to join the venture. That is easier said than done.
If you have a burning desire to become your own boss, I recommend that you first join a good company to learn the business, and then venture out on your own when you feel you have acquired enough rudimentary know-how to perform successfully.
One warning, though: You must be careful not to go against a former employer by directly competing with it, as this is a small industry and it could cause issues down the line. It will be fair and square if you seek the blessing of an erstwhile employer, or still better, become its subcontractor. The latter option is the best and a win-win situation.
Working as Agents
Today, a fairly large number of overseas manufacturers and service providers appoint agents in India in order to promote and market their products and services. This is a fairly well organized segment and occupies a niche position in the E&P industry.
I set up my business, SK Oilfield, in this sector in 1970 as the accredited representative in India of reputable overseas companies manufacturing equipment for the oil and gas E&P industry. There were two or three major corporate entities then that had set up separate agency divisions to cater to the needs of this uncharted market. But mine was the first privately owned company to enter into this new, exciting territory.
I was both sole worker and proprietor of SK Oilfield. With no funds and no engineering or even science background, it was a foolhardy venture.
But then it was my only option, something akin to a drowning man grasping at straws. My newspaper, Witness, which I had started in Dehra Dun in August 1964 with hope in my heart and prayers on my lips, was on its last legs. I had exhausted both my patience and the savings I had set aside over the years in my jobs with ONGC and a private company.
On top of this, I married in January 1965 and by 1970 had two children.
The First US-Dollar Check
Starting the company was hard going as I had expected. However, with technical guidance from a couple of friends in ONGC and backed by my fluent English writing skills and perseverance, I sent letters to a few American companies and was soon able to get nonexclusive representations from two. The next step of getting an order was even harder; it then took me 2 years to see my first US-dollar check.
Gradually, year by year, more and more foreign companies came into my stable until the company’s count of overseas principals reached a baker’s dozen. Thus, over the first 10 years, I was able to establish a name for myself in the young and growing ONGC.
In February 1980, SK Oilfield Equipment Co. Pvt. Ltd. was formally incorporated. I employed a few professionally qualified staffers and also appointed my own representatives in Duliajan and other work centers in ONGC’s widening oil patch. Flushed with discoveries in Gujarat and Assam, ONGC became more enterprising and decided to go offshore; it set up its own offices in Bombay (now Mumbai). I followed suit and opened an office there to cater to ONGC’s growing requirements.
With the opening of oil and gas blocks to private Indian and multinational companies under the New Exploration Licensing Policy, which became effective in 1999, several Indian and foreign companies set up shop in India. This vastly expanded the number of customers that came SK Oilfield’s way; as a result, the number of clients SK Oilfield caters to now has increased to over 25.
What the Future Might Hold
Today, however, this particular segment is virtually saturated with Indian agents of all kinds. Further, some of the major service companies, offering a wide range of products and services, as a rule do not work through agents.
The entry of Chinese manufacturers in this once Western-dominated segment has also made the situation more challenging; these companies invariably quote the lowest prices. Thus it would be a brave entrepreneur—professional or otherwise—who would enter this segment.
I do not wish to dishearten a young professional who has exceptional entrepreneurial skills and some innovative ideas. There is certainly plenty of room for innovation in every industry and there are also many angel investors ready and willing to help fund a worthwhile enterprise. Just remember: Startups do emerge off and on and some of them do hit the jackpot, given enough of wits, guts, and luck.
My son, Manav Kanwar, has been the driving spirit behind the ongoing expansion of SK Oilfield during the past few years. Now it ranks among the top companies in this niche segment—with new offices in Gurgaon for the National Capital Region and in Mumbai, and an expanded Dehra Dun office.
In 2000 when I reached 70, I turned in my papers, saying, “Enough is enough.” Since then, I have been devoting my time to reading and writing, which I really love and enjoy doing.