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IOC set to ink fresh deals with 7 shipping cos

P. Manoj

NEW DELHI, Nov. 12

INDIAN Oil Corporation (IOC) has finalised fresh contracts with seven domestic shipping companies for 19 vessels for the movement of petroleum products along the coast.

As against an initial requirement of 25 vessels (the same numbers as last year) by the oil industry (IOC, HPCL, BPCL), the contract was eventually concluded for 19 vessels, officials said.

With the charter rates looking up this year for all categories of ships, the domestic industry has been able to secure an increase of 8 to 18 per cent in dollar terms and 12 to 22 per cent in rupee terms on an average depending upon the technical specifi cations of vessels over the time charter rates in last years deal.

The new contract will come into force with retrospective effect from October 1. It will initially be for a period of six months with provisions for two extensions of three months each.

Having decided to reduce the requirement of vessels to 19, IOC has re-delivered the excess vessels (out of the 25 vessels from the previous contract) to the ship owners.

The surplus vessels which have been re-delivered includes one vessel each of Essar Shipping and Century Shipping in the 6,000 to 10,000 dead weight tonne (DWT) range.

These two smaller vessels were deployed to ferry naphtha to the Jageshwar jetty of Indian Petrochemical Corporation Ltd (IPCL). With the commissioning of a new jetty at Dahej which is capable of attracting bigger vessels, the smaller vessels had become r edundant and hence were re-delivered.

IOC also decided to do away with four vessels in the DWT range of 40,000-55,000.

In the fresh contract, IOC has taken three vessels for the 18,000 to 21,000 DWT category - two from Essar and one from Shipping Corporation of India (SCI).

The maximum number of vessels have been taken in the DWT range of 21,000 to 30,000 totalling 12. Out of this, Great Eastern Shipping (Gesco) has bagged the contract for 5 vessels, SCI for 3 vessels, Varun Shipping for 2 vessels and one each by Pratibha S hipping and Century Shipping.

The contract for the 30,000 to 40,000 DWT range has been given to two vessels of SCI.

A last minute change of plan saw IOC revising the requirement of vessels in the 40,000 to 55,000 DWT range from 7 to 2. Finally, one vessel each of SCI and Sanmar Shipping were taken in this range. While one vessel each of SCI, Gesco and Sanmar were re-d elivered due to the revised plan.

The contract for coastal transportation of petro products is now being awarded on the basis of open tenders after the Centre scrapped the cost plus formula of moving crude oil from April 1, 1998 as part of the phased dismantling of the administered price mechanism in the oil sector. The last contract expired on September 30 this year.

Earlier, the coastal shipping contracts were awarded on the basis of time charter rates negotiated between IOC/OCC and the shipping companies.