Quippo Oil to invest $600 mn

Quippo Oil & Gas is planning to invest $600 million (around Rs 2,400 crore) over the next two years to buy onshore rigs, offshore supply vessels and offshore pipeline-laying barges to boost its presence in the oil and gas services sector.

The company is a subsidiary of infrastructure equipment rental company Quippo Infrastructure Equipment, promoted by Srei Infrastructure Finance.

Quippo Oil & Gas currently owns two onshore drilling rigs and one offshore pipeline-laying barge. It bought the barge recently for $120 million through its joint venture company with New Delhi-based MDL Energy, an engineering and project management company.

"A major part of the $600 million fund will be invested in our offshore business. We are already in dialogue with various companies for leasing out the pipeline-laying barge," said Sandeep Bedi, CEO of Quippo Oil & Gas.

The shallow water pipeline-laying barge, which also has the ability to install exploration and production platforms, will be deployed first in Malaysia.

The company's first rig had drilled 11 wells in Cairn India's oilfields in Rajasthan's Barmer district in 2005, besides ONGC's coal-bed methane block in Gujarat. The rig is currently being used at the ONGC block near Baroda. The second rig has been deployed at a coal-bed methane block operated by Reliance in Rajasthan.

Of the $600 million investment, the company will invest around $140 million in acquiring eight onshore rigs. "Two onshore rigs are already under operation. The third one will arrive in the next 3-4 weeks and the fourth in another 2-4 weeks from then," Bedi said.

Typically an onshore rig costs around $17-18 million. The company also plans to buy offshore drilling rigs but "we are waiting and watching before we enter that field," Bedi said.

There is a shortage of rigs across the world and its impact is being felt in India as well.

Reliance and ONGC drilling commitments in offshore areas have been delayed due to this shortage. The waiting period for offshore rigs is almost five years compared with just around 8 months for onshore rigs.

Quippo is also planning to buy six to 10 offshore vessels which will work for various exploration and production projects in the country's offshore areas.

"The offshore vessels will be dedicated to India and the south east Asia," Bedi added.

The company plans to move its offshore vessels to southeast Asia during the monsoon period between May and October when offshore work in India comes to a stop. Quippo, however, plans to deploy its onshore drilling rigs in West Asia and South America.