India’s largest private shipping firm by fleet size and revenues, Great Eastern Shipping Co. Ltd, will invest an additional Rs450 crore to buy two new multi-purpose support vessels (MSVs) to cater to the rising demand for such ships to provide logistics support for offshore oil exploration activities.

An MSV currently fetches day rates ranging from $25,000 to $125,000, depending on the specification and age of the vessel‘

MSVs are designed to undertake a range of work such as offshore pipe-laying, diving support, oil well intervention, fire-fighting assistance, oil spill removal and as a standby and accommodation vessel.

The MSVs will be built at the shipbuilding yard of state-owned Mazagon Dock Ltd, for which a contract was signed by the two parties recently, a person familiar with the deal told Mint. The vessels have been ordered by Greatship Global Offshore Services Pte Ltd, the Singapore-based subsidiary of Great Eastern’s wholly owned offshore subsidiary Greatship (India) Ltd.

When contacted, G. Shivakumar, chief financial officer and head, services, Greatship India, declined to comment.

An MSV currently fetches day rates ranging from $25,000 to $125,000 (about Rs10-50 lakh) depending on the specification and age of the vessel.

State-run oil exploration and production firm ONGC Ltd had recently hired one MSV each from Great Offshore Ltd and Seamec Ltd at a day rate of $56,000 each for five years.

To establish itself in the offshore services sector, Greatship India has ordered two platform supply vessels, four multi-purpose platform supply and support vessels, eight anchor handling tug-cum-supply vessels and a jack-up rig. It already owns three platform supply vessels. The Bombay Stock Exchange-listed firm is spending close to Rs2,000 crore to buy these vessels to meet the rising demand from oil exploration and productions firms, both in India and abroad.

Greatship India has ordered six vessels (out of the 15 on order) through its Singapore-based subsidiary where the tax and fiscal regime are more conducive for shipping firms.

“We aim to build one of the most modern and technologically advanced fleet in order to capture the fast growing offshore market," K.M. Sheth, executive chairman of Great Eastern Shipping, told shareholders during the firm’s annual general meeting held on 26 July.

The four multi-purpose platform supply and support vessels that Greatship is building at the yard of Singapore’s Keppel Singmarine Pte Ltd has operational features that helps in easily upgrading them to MSVs.

India’s growing offshore oil industry is attracting shipowners to enter the sector as oil explorers such as ONGC, Reliance Energy Ltd, British Gas, Cairn Energy Plc., Hardy Oil & Gas Plc. and Gujarat State Petroleum Corp. pump in millions of dollars to prospect for oil and gas under the ocean floor. “MSVs have lot of demand in the market," said R.K. Ray, general manager, offshore services, at state-run Shipping Corp. of India Ltd.