Greatship struggles to make a beginning

Greatship struggles to make a beginning
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First Published: Mon, Jul 09 2007. 12 10 AM IST
Updated: Mon, Jul 09 2007. 12 10 AM IST
Mumbai: Greatship (India) Ltd, the fully-owned offshore oilfield service subsidiary of Great Eastern Shipping Co. Ltd, is struggling to make a begining in the lucrative jack-up drilling rig business.
After making an unsuccessful attempt to land a contract from the Oil and Natural Gas Corp. Ltd (ONGC) for two new jack-up rigs last month, the offshore service arm of India’s largest private shipping firm applied for another contract of the state-run oil exploration and production company. However, this attempt too has not succeeded.
Jack-up rigs are required for deep-water drilling.
Soaring international oil prices are attracting oil firms to invest huge money in prospecting for oil. This has boosted demand for jack-up drilling rigs. A jack-up rig fetches anywhere between $170,000 (Rs69 lakh) and $200,000 a day for the owner of the rig.
ONGC had invited bids for five rigs to replace an existing contract involving six rigs that will end between December 2006 and January 2007. The oil company has received offers for 10 rigs from five firms including Greatship.
Aban Offshore Ltd, Asia’s largest drilling service provider, has offered four rigs for the deal. The world’s largest offshore drilling company, Transocean Inc., and Greatship have offered two rigs each, while Jindal Drilling and Industries Ltd and Unitrade Gesellschaft offered one rig each.
Greatship has offered two rigs currently being built for the Norwegian-controlled Cayman Islands registered Mosvold Jackup Ltd. These rigs, named Mosvold 104 and Mosvold 105, are under construction at the rig-building facility of Maritime Industrial Services Co. Ltd in Sharjah, United Arab Emirates. The rigs, capable of drilling in 300-ft deep water, are slated to be delivered in August and December 2008, respectively. Greatship had a non-exclusive agreement with Mosvold Jackup to market the two rigs and, possibly, buy them if it landed the ONGC deal.
But a few days after Greatship submitted the bid along with four other firms, a recently formed Nigerian drilling service provider, SeaWolf Oilfield Services Ltd, offered to buy Mosvold Jackup for 1,164.2 million Norwegian kroners, or 31.75 kroners per share, which was later raised to 33 kroners per share.
The deal is likely to go through with SeaWolf securing a minimum ownership in Mosvold Jackup of approximately 77%. In the offer documents, SeaWolf has stated that it was buying Mosvold (also a start-up formed in April 2006) basically for the two jack-up rigs which it intend to own and operate in the shallow waters off Nigeria for Nigerian National Petroleum Corporation.
“Greatship has lost its opportunity on these rigs,” said an offshore rig analyst at Oslo, Norway-based DnB NOR, one of the top global banks that fund shipping and offshore firms. He did not wish to be named. A spokesperson for Great Eastern Shipping said he was “not aware” of the development.
Great Eastern Shipping had earlier said it would invest around Rs590 crore towards equity contribution in Greatship for pursuing business opportunities in the offshore oilfield services business. Out of this, around Rs305 crore has already been infused towards equity in Greatship.
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First Published: Mon, Jul 09 2007. 12 10 AM IST