Essar Shipping to buy rigs, invest $400mn

Essar Shipping and Logistics is planning to invest $400 million for acquiring onshore and offshore oil drilling rigs.

The Cyprus-registered firm has formed Essar Oilfields Services (EOSL) to focus on international and Indian onshore and offshore oil and gas drilling business. "EOSL's investment plan includes acquisition of a diversified fleet of rigs for inland as well as offshore drilling," an official release said today.

Increased exploration & production (E&P) activity has seen rig utilisation rates in excess of 98%. "The demand for drilling rigs is forecast to sustain over the next 3-5 years. The contract drilling rates have nearly doubled in the last three years, and we forecast they will remain robust," the release added.

EOSL, whose operations are run out of Dubai, will employ the rigs for Essar's E&P activity as well as contract drilling for third parties.