Bangalore: Sical Logistics Ltd has sold its only platform supply vessel (PSV) to Norwegian shipping firm Farstad Shipping ASA, effectively turning its back on a three-year-old strategy to expand into the lucrative global offshore logistics market.
Farstad Shipping, a supplier of offshore support vessels, said in a statement it has purchased the PSV, named ‘Sical Torino’, for 150 million Norwegian kroner (around $24.8 million or Rs110 crore).
A PSV provides offshore logistics such as supplies and cargo transport for deepwater oil and gas drilling.
Sical chairman Ashwin Muthiah was not immediately available for comment.
“The market for such vessels has gone down in the North Sea where the PSV was servicing deepwater oil rigs. Before it could go down further, it was sold,” an executive at Sical said on condition of anonymity.
The firm’s offshore logistics fleet now only has a dredger that has been rented out to infrastructure firm Marg Ltd for deepening its port at Karaikal in Puducherry. Sical bought the dredger in 2007 for $24.92 million when the global market was at its peak due to rising sea trade and the reconstruction of marine and port infrastructure.
Dredgers are specialized ships used to deepen and maintain the channels of ports and harbours.
Sical has no plans to buy PSVs or more dredgers, the executive mentioned earlier said.
Sical’s plan to enter the business began in September 2006 with the acquisition of Singapore-based Bergen Offshore Logistics Pte Ltd, a provider of specialized logistics for offshore oil and gas exploration, for about $42 million. The acquisition gave Sical access to the PSV, which Bergen Offshore had purchased for $31.3 million.
The Mumbai-listed Sical is the logistics unit of Chennai-based MA Chidambaram Group.
The acquisition clearly indicated that offshore logistics was a top strategic priority at Sical, Muthiah had said at the time. “With Bergen’s acquisition, Sical Logistics has taken its first firm step towards achieving a global presence in offshore logistics,” he said in a statement.
In 2007, Sical lost a contract for operating and managing 15 offshore supply vessels of Oil and Natural Gas Corp. Ltd after one of the ships sank near Mumbai, killing eight of the 17 crew members on board.