India's ONGC gets shipping relief on $8b offshore investment plan
The shipping ministry has granted relief to state-owned Oil and Natural Gas Corporation on the issue of the age of vessels it hires, saving the flagship explorer's $8 billion investments planned to bring new offshore fields in the west and east coasts into production during the 11th five-year plan.
The shipping ministry had recently issued guidelines for hiring of vessels and barred ships over 25 years from sailing in Indian waters. This threatened to ground ONGC's offshore activities as most of the 200 vessels deployed annually by the company are over 25 years old but certified fit and seaworthy.
Oil companies use different types of ships for carrying equipment, men and materials to mid-sea drilling or pumping facilities. There are also specialised barges used for construction of platforms on the sea and to lay pipelines etc.
With September approaching, when the post-monsoon season calms the sea and allows resumption of offshore work, ONGC chairman R S Sharma had sent an SOS to the shipping ministry seeking relaxation for the company.
Sharma wrote that ONGC had already started work on its $8 billion offshore plan and "the next 3-4 years shall see intense activity at both the coasts. I am sure you would well appreciate the significance of these operations to enhance oil and production in the country at a time when oil prices have reached unprecedented levels in the global markets".
He had pointed out that in previous discussions between the oil and shipping ministries, it was "agreed that if the vessel is well maintained and meeting statutory requirements of seaworthiness, then the age (of the vessel) becomes immaterial".
"The availability of vessels is precarious due to increased demand which is triggered by spurt in oil prices. Therefore, it will not be possible to engage new vessels even at higher prices. This shall seriously hamper the offshore construction works and will adversely affect oil and gas production," Sharma said in his letter.
The shipping ministry had recently issued guidelines for hiring of vessels and barred ships over 25 years from sailing in Indian waters. This threatened to ground ONGC's offshore activities as most of the 200 vessels deployed annually by the company are over 25 years old but certified fit and seaworthy.
Oil companies use different types of ships for carrying equipment, men and materials to mid-sea drilling or pumping facilities. There are also specialised barges used for construction of platforms on the sea and to lay pipelines etc.
With September approaching, when the post-monsoon season calms the sea and allows resumption of offshore work, ONGC chairman R S Sharma had sent an SOS to the shipping ministry seeking relaxation for the company.
Sharma wrote that ONGC had already started work on its $8 billion offshore plan and "the next 3-4 years shall see intense activity at both the coasts. I am sure you would well appreciate the significance of these operations to enhance oil and production in the country at a time when oil prices have reached unprecedented levels in the global markets".
He had pointed out that in previous discussions between the oil and shipping ministries, it was "agreed that if the vessel is well maintained and meeting statutory requirements of seaworthiness, then the age (of the vessel) becomes immaterial".
"The availability of vessels is precarious due to increased demand which is triggered by spurt in oil prices. Therefore, it will not be possible to engage new vessels even at higher prices. This shall seriously hamper the offshore construction works and will adversely affect oil and gas production," Sharma said in his letter.