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Tuesday, Dec 19, 2006

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Essar Oilfields to invest $400 m to acquire rigs

Our Bureau

Mumbai , Dec. 18

Essar Oilfields Services Ltd (EOSL), a wholly owned subsidiary of Cyprus-registered Essar Shipping and Logistics Limited, will be investing $400 million for acquisition of onshore and offshore oil drilling rigs. EOSL has been formed to focus on international and Indian onshore and offshore oil and gas drilling businesses.

EOSL's investment plan includes acquisition of a diversified fleet of rigs, for inland and offshore drilling.

Essar sees significant opportunities in this segment, as oil exploration and production activity around the world, including in India, has seen rig utilisation rates in excess of 98 per cent. This demand for drilling rigs is likely to sustain over the next three to five years.

EOSL, whose operations are run out of its office in Dubai, will be employing the rigs for Essar's E&P activity and contract drilling for third parties.

Mr Sanjay Mehta, CEO, Essar Shipping and Logistics Ltd, told Business Line that the rigs, which would be delivered within a month, would be employed in India and in the overseas markets. He said while the offshore rigs commanded a price of $3,00,000 per day, the onshore variant fetched a daily hire rate of about $60,000 per day.

Essar Shipping and Logistics Ltd has four operating companies under its umbrella — Vadinar Oil Terminal Ltd, which set up a 32-million-tonne terminal at Vadinar, Essar Logistics Ltd, Essar Shipping Ltd and EOSL.

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