Varun Shipping plans mega offshore binge

Varun Shipping Company, a major LPG carrier, is now planning to invest heavily in the offshore sector.

The company would initially invest Rs 450 crore, by the end of the current calendar year, with an aim at acquiring vessels supporting offshore activities.

The company plans to offer turnkey solutions in the offshore sector and would acquire offshore-related infrastructure.

"Varun Shipping will acquire oil rigs and infrastructure facilities to support the offshore exploration activities.

A oil rig costs anywhere between $150 million and 200 million. However, in the offshore market, at least for the next two years, oil rigs are not available," sources said.

They said the company would use a part of the proceeds from their proposed Singapore Depository Shares (SDSs), which would hit the Singapore Stock Exchange by June, in an offshore project.

They pointed out that the company has already filed a draft prospectus with the Singapore Exchange Securities Trading, for floating SDSs.

"Though the size of SDS has not been finalised, it is likely to be substantial. Currently, the Singapore Exchange authorities are examining the compliance issues regarding the Indian market, as Varun Shipping will be the first listed company on the Singapore Exchange," they said.

Yudhishthir D Khatau, the managing director of Varun Shipping Company said that the company is planning further investment in offshore sector to strengthen its presence in this sector.

However, Khatau declined to comment on plans to acquire oil rigs but said, "at this point of time, we have no such plans".

Currently, the company has two anchor handling, towing and supply (AHTS) vessels to support the offshore related activities.

"The company will acquire second hand offshore supply vessels (OSVs), platform supply vessels (PSVs) and multi-support vessels (MSVs) for Rs 450 crore. This acquisition of vessels will also coincide the soon-to-be floated tenders of Oil and Natural Gas Company (ONGC)," sources said.

Sources said that the company is not just targeting ONGC, but vessels would be deployed with other players as well, which include British Gas, Reliance Industries, etc.

They added that the company is also planning to acquire very large crude carriers (VLCCs) based on the market conditions. Varun group, now owns 19 vessels, including 11 LPG carriers.