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Shell to open largest offshore delivery centre globally in Bengaluru

Economic Times:  June, 2015

Bengaluru: Global energy giant Shell is setting up its largest captive unit or offshore delivery centre globally in Bengaluru that will lead to creation of more than 5,000 jobs in the city.

"The company has a large IT set-up in Malaysia, US and UK and will be moving all its global IT jobs to Bengaluru," said two people with direct knowledge of the development.

In an email response Shell confirmed the development and said, "We believe that India's significant IT talent will improve our ability to provide top-quality IT project delivery and selected operations support around the world," the company said.

It further added, "We anticipate no direct impact to Shell staff in 2015 as a result of this proposed change. Beyond then, given our strategic intent, it is expected that some impact on staff is likely as a result of this activity. We do not yet know the extent of this impact." Shell has signed a 3, 50,000 sq. ft. space in RMZ Eco World in the first phase and is expected to occupy it by April 2016. Eventually, the company plans take up 8, 00,000 sq. ft by 2018 to provide IT support to all its business verticals.

The new in-house global information technology centre will be called The Shell IT Centre Bengaluru.

The company chose Bengaluru due to competitiveness and the availability of a skilled, diverse IT talent pool covering the broad range of skills and disciplines that Shell needs worldwide. "The deal between RMZ and Shell was closed on Thursday, real estate services firm, CBRE, was running the transaction. The proposed special economic zone building is currently under construction," said one of the persons. RMZ Eco World, located on Bengaluru's Sarjapur outer ring road, multinational companies like KPMG, SAP, Morgan Stanley, ANZ and Honeywell, among others.

The new centre will form an integral part of the Royal Dutch Shell global IT project delivery and support network. "The center will be used to provide IT services to entire Shell's businesses including upstream oil and gas production, marketing and projects," he added.

Global captives or offshore delivery centers of multinational companies (MNCs) act as technology and business process centers for their global operations. In the past many MNC have avoided setting up their own captive centers in India instead opting to work with outsourcing majors like Infosys, Wipro, IBM and Accenture.

Shell, that recently acquired oil major BG Group for £47bn, currently operates Projects and Technology Centre in Bengaluru, set up in 2006, across two locations. "The company will move the entire R&D centre to a new 50-acre built to suit, dedicated campus in Devanahalli on the outskirts of the city by 2016," said another person quoted above.

The largest oil & gas company in the world also operates a Business Operations Centre in Chennai that provide financial and business support to Shell companies worldwide. It employees over 2,000 people in Chennai.

According to property consultants, Bengaluru has become the favourable center for global in-house centres (GIC) or captive centers for brands like Victoria's Secret lingerie, Lowe and Baxter International. The city recorded highest increase in absorption of office space at 3.2 million sft, a 510% y-o-y for January to March quarter of 2015. The total absorption for Grade A properties in office spaces across top eight cities was recorded at 7.97 million sq. ft. during the quarter ended March, said Cushman & Wakefield in South Asia, an international property consultancy firm