L&T Aims $50-60 Billion Opportunity in Middle East Expansion, Focuses on Oil-to-Chemicals Business: Report

Larsen & Toubro (L&T) is planning significant investments of $50-60 billion in projects converting oil into chemicals (O2C) and petrochemicals in the Middle East starting from the financial year 2025, according to a report by Moneycontrol. Subramanian Sarma, L&T’s whole-time director and president of energy, highlighted this potential.

“We see a $50 to $60 billion opportunity in O2C projects, likely beginning execution by FY25 or soon after,” Sarma stated.

He noted that while traditional projects will continue until March, there’s anticipation for new developments in oil-to-chemicals, petrochemicals, and new plants beyond the next fiscal year. L&T aims to seize these opportunities independently and is also open to joint ventures with other major engineering firms for larger projects.

Sarma mentioned that while conventional projects are strong currently, there’s a growing focus on green energy projects. L&T is eyeing opportunities in blue ammonia and carbon capture in the Middle East, with green hydrogen projects gaining traction in Europe.

In addition to its core engineering business, L&T is expanding into green hydrogen projects, focusing on electrolyser manufacturing, EPC (engineering, procurement, construction) projects, and manufacturing for export from India.

L&T, India’s largest construction and engineering company, currently holds a market cap of $60.11 billion. As of the fourth quarter of FY2024, its consolidated total order book stands at ₹4.75 trillion. The company’s exposure in the Middle East has grown from 20% in Q1 2022 to nearly 40% by Q4 2024.

Analysts have raised concerns about L&T’s heavy reliance on Middle East projects, citing geopolitical risks and fluctuations in commodity prices that could impact earnings, given the fixed rates of these projects.

L&T’s shares closed slightly up at ₹3,650.45 on Monday, July 15, compared to ₹3,648 at the previous week’s close. The company is scheduled to announce its April-June quarter results in a board meeting on July 24, as per its Bombay Stock Exchange filing.