Mumbai: Vijay Kantilal Sheth, who lost control of India’s leading integrated offshore oilfield services provider Great Offshore Ltd to Bharati Shipyard Ltd in May 2009, is attempting a comeback by building a new empire from the ground up.

Strategic move: Vijay Sheth.

The three are Great Energy Pvt. Ltd, Great Drilling Pvt. Ltd and Great Towing Pvt. Ltd.

Sheth intends to own and operate oil rigs and provide other marine infrastructure to offshore operators.

Sheth lost Great Offshore in May when the value of shares he had pledged with financial institutions plunged below the value of the loans he had taken to build his equity stake in the firm. He suffered the absence of financial backing by the extended Sheth family; he had already split from his cousins—Bharat and Ravi Sheth —who own the more profitable Great Eastern Shipping.

On 7 May 2009, India’s second largest ship maker Bharati Shipyard bought the shares pledged by Sheth, equivalent to a 14.89% stake in the company, at a price of Rs315 per share. Sheth resigned as vice-chairman and managing director on 29 May 2009.

Bharati Shipyard currently owns a 49.73% stake in Great Offshore.

“I have nothing to say at this point of time. I will make an announcement on Great Energy at an appropriate time," Sheth said on the sidelines of a roadshow held in Mumbai for the ninth round of auctions of oil and gas blocks by the government under the so-called New Exploration and Licensing Policy (Nelp) on Monday. He added that his companies would not be bidding for Nelp oil blocks.

Sheth will offer services mainly to oil and exploration companies such as Reliance Industries Ltd and Oil and Natural Gas Corp. Ltd. This will include running offshore support vessels, renting out oil rigs, and offering engineering services and logistics support.

According to close associates of Sheth who did not want to be identified, he is in talks with financial institutions and global offshore companies to acquire assets in the offshore services business in which he is considered a veteran.

Sheth, who rarely interacts with the media, declined to answer specific questions on a possible acquisition of an offshore company, induction of international strategic partners, and asset acquisition.

Industry executives who know Sheth closely said on condition of anonymity that he has inducted his son Rishabh into the business.

“I know that he is trying hard to make a major comeback. Though it is an uphill task to recreate India’s biggest offshore services company (Great Offshore), Sheth, with his 35 years of experience," may be able to bring “in some of the key international players into the Indian market as his strategic partners," a close friend of Sheth said.

“Initially, he may not be bidding for oil blocks, but he will shortly be readying marine infrastructure to support (the) entire oil exploration and production process," added this person who did not want to be identified.

“He does not own assets. Hence he will have to acquire a company with assets. Since he has no financial muscle at this point, he will have to team up with an international partner with offshore assets," another close associate said, asking not to be identified.

A consultant to major oil and gas exploration and production companies said Sheth has the “right attributes" to pursue offshore services.

“His mission is to build all offshore services under one umbrella. He is taking technological expertise from an international company. But details are not available at this point of time," the consultant said, also requesting anonymity.

Samir Kanabar, partner (infrastructure practice) at the audit and consultancy firm Ernst and Young, said Sheth is capable of recreating Great Offshore given his knowledge of the industry.

“Sheth can make an easy re-entry into (the) offshore space as there are a lot of second-hand offshore vessels available in the market, owing to recession," Kanabar said. “But the real challenge would be the ability to raise funds and ramp up operations amidst intense competition."