With its Rs 400-crore greenfield shipyard project yet to receive all necessary clearances, offshore service provider Dolphin Offshore Ltd is in the process of forging alliances with domestic shipyards in a bid to dip into the booming shipbuilding market at the earliest.
The company is in advanced talks with three shipyards — two in Gujarat and one in Maharashtra. It is expected to finalise a deal with one of the shipyards within the next two months.
“It is our intention to get into shipyard building now, as the market is hot globally. We have not yet finalised the partnership model. It could either be on a sub-contract basis or a partnership basis, in which we jointly execute a shipbuilding order with the existing shipyard,” Mr Satpal Singh, Joint Managing Director of Dolphin Offshore, told Business Line.
Although the company was open to acquisition, Mr Singh felt that existing shipyards were not too keen on putting their facilities on the block at the moment in the light of the premium that shipbuilding space commands at present.
In the long run, Dolphin Offshore plans to consolidate its presence in the shipbuilding space by setting up a Rs 400-crore shipyard in three phases.
“The Gujarat Government has identified a suitable land at Jaffrabad, located north east of Pipavav, for the proposed shipyard. It will take some more time for us to get all the necessary clearances, acquire the land and then prepare the ground, starting from soil sampling, to set up the project,” Mr Singh said.
After completion of the three phases of construction, the shipyard will be capable of dry-docking jack-up rigs, apart from constructing bigger ships.
In fact, no shipyards in India can currently service the giant jack-up rigs used for offshore oil exploration. Currently, oil exploration companies, including ONGC, is forced to tow its jack-up rigs all the way to the nearest shipyards in Dubai for servicing.
“It takes 14 days for the rig to reach Dubai shipyard and another 14 days to tow it back to India, which means a loss of 28 days of travel time. Given the fact that the rigs at present command a daily hire rate of $2,00,000, you are talking about a loss of $5.6 million just to ferry the rig from India to Dubai and back,” Mr Singh said.
With more than 60 such rigs in operation in the Indian offshore sector, Dolphin sees tremendous potential in this space.
Dolphin Offshore is not an isolated case of companies related to the marine sector wanting to jump into the shipbuilding bandwagon, as industry players feel that the boom will last at least till 2011. Even shipping companies are planning to get into shipbuilding —Shipping Corporation of India plans to set up a facility with a joint venture partner and talks are on with some Korean Shipyards, while Mercator Lines has put up on its drawing board plans to build a $247 million yard at Palghar in Maharashtra.
The company is in advanced talks with three shipyards — two in Gujarat and one in Maharashtra. It is expected to finalise a deal with one of the shipyards within the next two months.
“It is our intention to get into shipyard building now, as the market is hot globally. We have not yet finalised the partnership model. It could either be on a sub-contract basis or a partnership basis, in which we jointly execute a shipbuilding order with the existing shipyard,” Mr Satpal Singh, Joint Managing Director of Dolphin Offshore, told Business Line.
Although the company was open to acquisition, Mr Singh felt that existing shipyards were not too keen on putting their facilities on the block at the moment in the light of the premium that shipbuilding space commands at present.
In the long run, Dolphin Offshore plans to consolidate its presence in the shipbuilding space by setting up a Rs 400-crore shipyard in three phases.
“The Gujarat Government has identified a suitable land at Jaffrabad, located north east of Pipavav, for the proposed shipyard. It will take some more time for us to get all the necessary clearances, acquire the land and then prepare the ground, starting from soil sampling, to set up the project,” Mr Singh said.
After completion of the three phases of construction, the shipyard will be capable of dry-docking jack-up rigs, apart from constructing bigger ships.
In fact, no shipyards in India can currently service the giant jack-up rigs used for offshore oil exploration. Currently, oil exploration companies, including ONGC, is forced to tow its jack-up rigs all the way to the nearest shipyards in Dubai for servicing.
“It takes 14 days for the rig to reach Dubai shipyard and another 14 days to tow it back to India, which means a loss of 28 days of travel time. Given the fact that the rigs at present command a daily hire rate of $2,00,000, you are talking about a loss of $5.6 million just to ferry the rig from India to Dubai and back,” Mr Singh said.
With more than 60 such rigs in operation in the Indian offshore sector, Dolphin sees tremendous potential in this space.
Dolphin Offshore is not an isolated case of companies related to the marine sector wanting to jump into the shipbuilding bandwagon, as industry players feel that the boom will last at least till 2011. Even shipping companies are planning to get into shipbuilding —Shipping Corporation of India plans to set up a facility with a joint venture partner and talks are on with some Korean Shipyards, while Mercator Lines has put up on its drawing board plans to build a $247 million yard at Palghar in Maharashtra.