Mumbai-based Oil Field Warehouse & Services (OWS) and European company Aberdeen Supply Company (Asco) are forming an equal joint venture (JV) to set up an oil and gas logistics company.
The new venture, Owasco Offshore, will provide services in logistics, shore base and other support services in the oil and gas domain in the country. Asco, a '2,800-crore company, is present in Scotland, Norway, Holland, Alberta, USA, Singapore, Trinidad and Tobago.
“Our aim is to bring logistics services in the oil and gas sector at par with international standards. This JV will help us achieve the same. At present, the sector is not very organised and a lot of efficiency can be brought in the sector by introducing services of international standards,” said Vinay R Sharma, managing director, OWS.
OWS uses its warehousing facilities at special economic zones (SEZs) at Vizag and Mundra to prevent repeated imports of equipment for oil and gas exploration industry. While its Vizag facility caters to exploration and production (E&P) activities on the east coast, particularly in the Krishan-Godavari basin, Mundra facility caters to the west coast.
Generally, oil companies need permits for importing equipment needed for oil and gas E&P activities. These permits are valid for a certain period and hence, importing companies have to send the equipment back. If the equipment are needed again, those have to be re-imported.
“This leads to multiple imports and re-exports, thereby increasing the risk of loss or damage in transit, besides the loss of time and drop in productivity, along with rising costs involved in arranging and executing the logistics movement. This is where our company comes in picture and provide services to E&P companies,” said Sharma.
In the oil and gas sector, logistics amounts to 5-15 per cent of the total exploration costs. For instance, based on the drilling (shallow or deep waters) per well, cost between 30 days and 60 days can vary between $30 million and $70 million.
Sharma said compared to European companies, logistics cost for exploration and production companies in India was 40 per cent higher, as Indian companies did not plan their activities. ‘By bringing in organised way of working, we can help oil and gas companies reduce the cost to a great extent,” said Sharma.
Owasco Offshore will also venture into the Middle East, Africa, South East Asia and Common Wealth of Independent States, among others.
