SCI may form JV with ONGC

Proposes to supply and manage vessels for oil production and exploration.

National flag carrier Shipping Corporation of India (SCI) is exploring options of forging a joint venture with Oil and Natural Gas Corporation (ONGC) for supplying and managing offshore vessels for assisting their oil production and exploration activities.

A senior SCI executive said that the company is seriously pursuing the JV proposal for supplying and managing the offshore shipping division of ONGC.

However, no decision has been taken in this regard as yet, he said.ONGC has drawn up a Rs 4,000 crore investment plan for replacing its ageing offshore vessels in two phases to facilitate oil production and exploration activities by 2009. The oil company would maintain a 60:40 ratio in owning and chartering the fleet.

Currently, ONGC has a fleet of 61 offshore supply vessels (OSVs) and anchor handling tugs (ATHs), of which 31 are owned and 30 chartered. It owns two multi-support vessel (MSVs) with one under charter. It also have a fleet of 24 jack-up rigs (16 under charter) and six drill ships (four under charter).

ONGC offshore head PSV Rao confirmed that the company has inquired into acquisition plans of various domestic shipping companies in the wake of increasing demand for offshore shipping services.

"We have asked for detailed acquisition plans of members of Indian National Shipowners' Association (INSA) though nothing has been finalised yet," Rao said.

In addition to SCI, domestic shipping companies such as Great Eastern Shipping Company, Varun Shipping Company, Essar Shipping and Garware Shipping Corporation are also keen on providing OSVs to ONGC.

Private companies, including Tide Water (India), South East Asia Marine Engineering & Construction Ltd (Seamec) and Dolphin Offshore Enterprises (India) are also in the fray.

According to industry sources, ONGC is likely to extend the contract duration for offshore shipping services to 5 years from the current 2 years.

"Moreover, shipping companies like Garware Shipping and ABG Shipping have renewed or taken membership with Insa. This is in the backdrop of ONGC inviting tenders from Insa members," industry sources said.

Meanwhile, ONGC is planning to acquire one MSV, 17 OSVs and AHTs and 2 jack-up drills by 2009. It would also acquire 19 OSVs and AHTs by 2010. It further plans to buy other special vessels used for exploration assistance and seismic surveys.