DG Shipping recalls 27 ONGC supply vessels

The Directorate General of Shipping (DG, Shipping) has asked India's biggest oil explorer Oil and Natural Gas Corporation (ONGC) to recall 27 of its 46 supply ships for undergoing safety audits immediately.

The DG Shipping directive, which could lead to the disruption in oil production, has come within days after an ONGC-chartered ship, Samudrika-10, sunk off the Mumbai coast, killing five people on board.

In a notice dated July 11 to ONGC, the DG Shipping ordered around 27 OSVs (offshore supply vessels) to be recalled to the base for undergoing safety management tests before resuming duty at Bombay High.

Kiran Dhingra, director general of shipping, said, "I cannot offer any comment as the preliminary investigation about the ONGC incident is progressing. But we have asked ONGC to get the necessary security compliance for all the ships."

ONGC operates 46 offshore supply vessels which help in production and maintenance of India's largest oil field, Bombay High, situated 160 kilometers north west of Mumbai.

ONGC Chairman and Managing Director R S Sharma said the company was working out a contingency plan of giving the shipping contract to Shipping Corporation of India, as the ships of Sical, the company which operates its ships on an ONGC contract in the Bombay High area, were under scrutiny.

When contacted, an ONGC spokesperson said the company has not faced any production losses till now. "Production from Bombay High is currently 2,51,000 barrels of oil per day (bopd). However, the production, in general, cannot remain steady during the monsoon. ONGC is continuously coordinating with DG Shipping for the process of safety audit of vessels to ensure that it is completed at the earliest."

The ONGC spokesperson has said that 16 ships of ONGC operated by Sical and another 11 operated by a company called HAL have been asked to undergo the safety audits.

This will mean that the ships will have to get their certificates renewed.

The contingency plan being worked out by ONGC will only come into force if any of the ships fail the safety audit and are not allowed to operate.

The ONGC spokesperson said that the production was unlikely to be affected as all the ships were OSVs, which carry supplies, and not tankers which carry crude oil from the field. In case any of the ships failed to pass the audit, then the ships in operation would be asked to make more trips, he added.

However, since the entire process of recalling the ships from offshore sites would take at least three months, some ONGC executives fear that production could suffer.

In the last one week, 16 ships of Singapore-based Sical, which owned the ill-fated Samudrika-10, have returned to ONGC's Nhava base and the safety audits are expected to be completed in the next few days. If any ship fails the safety test, ONGC will have to hire new ships to maintain production.

"Even if ONGC floats a tender to source more OSVs, it is highly unlikely to get sufficient vessels as the shipping industry is currently facing a shortage of such ships," a senior executive from a leading private shipping company said.

The DG Shipping is also evaluating the possibility of filing a first information report against Sical for deploying a non-seaworthy ship in the Indian waters. The DG Shipping sources said Sical had given the manning contract of ONGC vessels to an unregistered company with no experience.

The multi-purpose OSVs are considered a lifeline for Bombay High rigs as they transport heavy equipment from the coast to the rigs, carry fire-fighting equipment, water, food and help to maintain the rigs. Depending on the facilities on board, the OSVs command a daily rent of $14,000 to $100,000 a day.