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Oil major Exxon to set up $500 million centre in Bengaluru

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Exxon Mobil, one of the world’s biggest companies, is making a $400 million-$500 million (Rs 2,500-crore-Rs 3,150-crore) investment in Bengaluru to establish a technical and business support services centre, multiple sources informed TOI.

A source told TOI that Exxon Mobil’s president of global services, Bryan Milton, is in Bengaluru for the formal launch of the centre. The move comes at a time when international oil prices have plunged, putting enormous pressure on oil majors to cut costs.

The sources told TOI that an additional multi-million investment is being considered to establish a technology and R&D centre in India. The oil & gas major, with a turnover of $412 billion last year, is the second biggest US company by revenue, after Walmart. It’s variously estimated to be the fifth or sixth biggest company in the world. exxonmobil-6-638

The Bengaluru centre will initially have about 1,000 employees. One source said this number is expected to grow to 5,000-6,000 employees when the centre is fully operational. When contacted, an Exxon Mobil spokesman declined to comment on the investment figure, but confirmed that the company is “establishing a new affiliate to develop a business support centre in Bengaluru later this year to provide a range of technical and business support services for the company globally”.

Operations, the company said, are expected to begin in late 2015. “Exxon Mobil designed its global business support centre network to improve efficiency and effectiveness by centralizing and integrating business processes. The network provides services to operations in 120 countries around the world. A multi-million-dollar investment, the business support centre in Bengaluru will be similar in size to others in the Exxon Mobil global network and is expected to provide more than 1,000 positions,” the spokesperson said. Karnataka IT secretary Srivatsa Krishna confirmed the company is investing in Bengaluru, but declined to comment further. The company is said to have chosen Bengaluru as the location after also considering Delhi/NCR, Chennai and Hyderabad.

“The Karnataka government was aggressive in its bid for the project. The company may also have been influenced by the fact that rival Shell has a massive centre in Bengaluru,” a source said.

Netherlands-based Royal Dutch Shell established an R&D centre in Bengaluru in 2006 that currently has an estimated 1,500 researchers and engineers. It is in the process of establishing a custom-built 40-acre campus near BIAL airport, that is expected to become operational this year. The centre is one of only three such in the world. The others are in Amsterdam in Netherlands and Houston in the US. The Bengaluru centre could be today Shell’s biggest. It’s the lead centre for bitumen research, creating different kinds of asphalt applications for roads. It is a major centre of computational science, which involves gathering massive amounts of data generated to construct mathematical and software models to analyze and solve problems.

“The centre is modelling, for instance, the surface of our giant oilfield in Majnoon, Iraq. It will tell us where to drill the wells, where to locate what,” Bichsel said. For Exxon Mobil, an India centre may be becoming urgent following the dramatic drop in oil prices. Crude oil prices are down over 40% from the high it touched in June last year. A number of small oil producers have gone bankrupt, and everybody’s margins have been massively squeezed. The Bengaluru centre could help address this issue for the company.

Source : TOI, 28th May



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