India’s Shipping Companies Look to Offshore Investments

With the boom in the oil and gas exploration sector, fueled by the recent awarding of new blocks under NELP VI, Indian shipping companies are tanking up to sharpen their focus on the offshore segment. Only last month, Oil and Natural Gas Corporation (ONGC) came out with a tender for chartering of around 26 offshore supply vessels, with mobilization requirement up to the third week of November. Shipping companies such as Great Eastern Shipping, Varun Shipping and Mercator Lines have lined up significant investments in this sector in the current fiscal. In fact, the boom in the offshore sector is one of the reasons that prompted GE Shipping to de-merge its offshore division into a separate company, Great Offshore Ltd, to get higher valuations from this business. The company, which has a fleet of 33 offshore supply vessels, has on order six new offshore supply vessels involving a cost of $86m in the current fiscal. Varun Shipping, which is primarily in the LPG transportation business, also has plans to invest between $80m-$100m for acquiring offshore assets, including platform supply vessels and specialized vessels. Mercator Lines has forayed into offshore business by placing an order for construction of a premium offshore jack-up oil rig with Keppel FELS. Scheduled to be delivered by March 2009, the rig will meet operations requirements in water depths of up to 350 feet. In the last four years, ONGC and Oil India Ltd made 25 significant hydrocarbon discoveries, including 10 offshore, while the private sector has made 32 significant discoveries, both in NELP and pre-NELP blocks. These discoveries were made in five major areas — Mahanadi-NEC offshore, Krishna-Godavari offshore, Gulf of Cambay, on-land Rajasthan and Cambay basin. (Source: Hindu Business Line)