Shipping Corporation of India (SCI), India’s largest shipping company by fleet size, hopes to increase the number of offshore vessels available for charter by almost 50 per cent to 20 by March 2012.
Nine new offshore vessels are expected to be delivered over the next six to seven months, out of which six will be delivered by Cochin Shipyard, and three by Bharati Shipyard, AK Gupta, director offshore at Shipping Corporation, told Financial Chronicle. He said the country’s largest shipping line expects a return of at least 12 to 13 per cent on the investment made for the new fleet. For the quarter ending June 30, the offshore segment contributed Rs 12 crore to the company’s profit.
“The total value of the vessels on order is around Rs 1,025 crore and this will be funded through external commercial borrowings,” Gupta said. SCI recently concluded an ECB, in which State Bank of India syndicated the foreign currency loans through six banks. Amit Agarwal, a senior analyst with Kotak Securities, said in a report that as crude rules above $100 a barrel, the market for deep-water drilling has become very lucrative. The offshore segment has abstained itself from serious complications of the shipping sector, which has suffered due to oversupply pressures and lower demand across Europe and the US apart from falling freight rates.
The six vessels on order from Cochin Shipyard are 120 tonnes offshore supply vessels and platform supply vessels, while the three ships on order from Bharati are 80 tonnes anchor handlers. The company also intends to get into the high-end offshore market, such as jack-up rigs, drill ships and submersible vessels. Agarwal said SCI would emulate GE Shipping, which hived off its offshore business unit into a separate 100 per cent subsidiary. However, Gupta denied any such plan.
On the whole, SCI now has a fleet of 81 vessels with total capacity of more than 5.7 million dead weight tonnage (DWT). Another 31 ships are on order. A part of this is expected in this financial year, while the remaining part would be delivered in 2012-13. The company’s capacity is expected to cross 6 million DWT in FY13.