Mercator Lines pays hefty bonus for early rig delivery

Mercator Lines pays hefty bonus for early rig delivery
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First Published: Mon, Mar 16 2009. 11 11 PM IST
Updated: Mon, Mar 16 2009. 11 11 PM IST
Mumbai: India’s second largest private shipping company Mercator Lines Ltd’s Singapore subsidiary Mercator Offshore Ltd has paid a hefty bonus to Singapore shipyard Keppel FELS Ltd for delivering a new offshore rig on 11 March, 20 days ahead of schedule.
“The bonus amount was as per agreement. We have paid Keppel FELS $625,000 for delivering three weeks ahead of schedule,” said Harish Kumar Mittal, executive chairman of Mercator Lines. “The earlier we take the delivery, the more money we will make.”
Keppel FELS is a wholly-owned subsidiary of Singapore-based Keppel Corp. Ltd, a maker of offshore rigs that also repairs and converts specialized ships.
Mittal said the jack-up rig, worth about $203 million and named Greatdrill Chetna, has been rented out to state-owned Oil and Natural Gas Corp. Ltd for three years through Great Eastern Shipping Co. Ltd.
“Through this deal, we earn an operating profit of $33.83 million per year. It makes sense to pay a bonus to the shipyard as it is also working hard to delivery early at these troubled times,” Mittal said.
This rig, Mercator’s second, can operate in depths of 350ft of water and has a drilling capability of 30,000ft.
Indian drilling contractors have ordered nine jack-up rigs in the past five years with a contract value of at least $1.5 billion, Keppel said in a statement.
Shares of Mercator Lines closed at Rs23.25, up 4.24%, on the Bombay Stock Exchange, on a day its benchmark Sensex index gained 2.13%.
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First Published: Mon, Mar 16 2009. 11 11 PM IST