Mercator to foray into offshore business

The Mumbai-based Mercator Lines (MLL) is exploring options to foray into offshore business. "Mercator Lines will be primarily looking into oil rig business. The cost of an oil rig is estimated at $150 to $200 million. It will also look into opportunities including construction of barges," said highly placed sources.

Sources added it would not be enter into offshore supply vessels (OSV) services. "The focus will mainly be on capital intensive oil rigs. We believe there is enough market as the crude oil prices are sky rocketing and offshore business is growing multifold every year," they said.

Recently, GE Shipping had de-merged its offshore division to a separate company Great Offshore Ltd (GOL). According to sources, GOL would be the largest offshore company in India and there are no other serious competition in offshore business from India.

Mercator Lines Joint managing director Atul J Agarwal confirmed that the company was conducting feasibility study on the prospects of offshore business. "It is too premature to comment at this stage as it is at very conceptual stage. Though we are looking into the possibilities, nothing has been finalised yet," said Agarwal.

Agarwal said it had not earmarked any capital outlay for its offshore foray as they were studying various technicalities in this segment.

Meanwhile, the company has invested over Rs 1,000 crore in current fiscal for fleet expansion and there are no immediate plans to acquire vessels.

"Currently, the vessel prices are high compared to the prevailing freight rates. We will acquire vessels at comfortable price level in future," Agarwal said.

Earlier, the shipping line had signed a memorandum of agreement with a Norwegian firm for rights of operating nine geared Panamax vessels of total 644,069 dead weight tonne (DWT) carrying capacity on charter with an option of purchasing some of these geared vessels in future.

"There are only 45 Geared and Grabbed Panamax vessels in the world and we own ten of them. These vessels are more efficient to operate in any port conditions," Agarwal said.

Asked about the port development programme, he said the idea to develop two minor ports in Gujarat was shelved off for the time being.

BETTING BIG

The company is bullish on the future prospects of the offshore business

Lack of competiton in India and skyrocketing crude oil prices a tremendous positive

The company has invested over Rs 1,000 cr this fiscal in fleet expansion

It plans to stay away from offshore supply vehicles (OSV) services