Essar Shipp buys rig for Rs 1000 crore

Marking its re-entry in offshore drilling business, Essar Shipping and Logistics (ESOL), through its subsidiary Essar Oilfields Services, has acquired a semi-submersible rig for $ 220 million (nearly Rs 1000 crore).

The acquisition is in line with Essar Shipping's plan to gain a significant presence in contract drilling sector. Essar Shipping has drawn up plans to invest over $ 400 million (nearly Rs 1,800 crore) for acquisition of a diversified fleet of on-land and offshore drilling rigs.

The company took the delivery of the rig in the UK. The rig, which will be christened as Essar Wildcat, is an anchor-moored, self-propelled system that is suitable for deployment in water depths of 1,350 feet and can be upgraded for deeper waters.

The rig has a drilling depth capacity of 25,000 feet and is equipped with top drive, automatic pipe handling systems and rough weather BOP launch system. Industry analysts pointed out the rates for rig had doubled in last six months and companies were scouting for brand new rigs.

"The shipyards building drilling rigs are overbooked and there are no second hand quality rigs available in the market. Great Offshore, Mercator Lines, Jindal and Aban Offshore are the leading players in the industry," they said.

Essar has experience and track record in contract drilling services. It was the first Indian company to offer contract drilling services in 1985 both for onshore as well as offshore exploration and production (E&P) activity.

Essar Shipping, which is a part of Essar Global, has four operating companies under its umbrella, including Essar Oilfields, Vadinar Oil Terminal and Essar Logistics.