ONGC Hunts for Partners

Flagship explorer Oil and Natural Gas Corporation (ONGC) could be looking at roping in other shipping companies for a joint venture to manage offshore support operations as its talks with state-owned Shipping Corporation of India (SCI) has hit choppy waters over valuation of its vessels for the purpose of transferring them to the proposed joint venture. Public sector company ONGC has been discussing the formation of a joint venture, proposed to be christened ONShip, with Shipping Corporation of India for forming a joint venture to help it outsource peripheral support services that require operating various kinds of vessels for its operations. Though executives from both companies deny any deadlock, saying talks are going on, sources say, differences remain on the valuation issue. At present, ONGC, which is India’s largest company, owns about 30 vessels and contracts nearly two dozen others from private operators to keep its offshore oilpumping installations supplied with required manpower and material. The public sector oil firm does not want to transfer to the joint venture its own ships at book value and would rather prefer a premium on them. Offshore support operations have been an issue, both on account of safety and cost, for ONGC. The joint venture with a shipping company is aimed at bringing in better operational efficiency, safety and cost-effectiveness. The company has seen a number of accidents involving offshore support vessels in recent times, triggering talks of poor maintenance and health of the ships. A joint venture will help the explorer outsource these non-core operations but retain direct say on crucial safety issues. [Source: http://timesofindia.indiatimes.com]