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ONGC gives cos a year to upgrade offshore fleet

Amit Mitra

Vessels must be fitted with Diagonal Positioning system and modern fire-fighting equipment.

Mumbai , Oct 5

Providing a significant relief to the shipping industry, ONGC has given a year's time for shipping companies to modernise their offshore supply vessels.

This will enable the companies to participate in the ONGC tender for the chartering of 30 offshore vessels to meet the latter's increased requirement for offshore oil exploration.

ONGC had floated a tender in March this year for vessels fitted with Diagonal Positioning (DP) system and modern fire-fighting equipment. ONGC decided to deploy vessels with DP facility following a recommendation by the committee that inquired into last year's accident involving an ONGC platform. The on-board, satellite-linked DP facility enables offshore vessels to automatically change positions in accordance with the swell conditions in the sea.

The 30 offshore vessels that have hitherto serviced ONGC do not have DP facility.

Grace period

The industry took up the issue with the Petroleum Ministry, seeking either some relaxation in the tender norms or adequate time to allow the companies to equip the vessels with DP facility.

"One year may not be adequate to modernise the entire fleet of the industry, especially with shipyards brimming with orders. But it is still a significant relief for shipping companies," an industry source said.

While some companies are looking for shipyard space overseas, others feel that the job could be done in India. It is estimated that the out-fitting of the new facilities would take at least nine to ten months, with the investment varying from vessel to vessel.

Significant investments

Shipping companies are however prepared to make the investments. In fact, in the wake of the boom in offshore exploration and production, shipping companies have lined up significant investment programmes to augment their fleets.

The GE Shipping group, for example, has on order 13 offshore assets, including vessels fitted with DP facility, while Varun Shipping, which is primarily in the LPG transportation business, plans to invest $80-100 million to acquire offshore assets, including platform supply vessels and specialised vessels.

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