Financial Daily from THE HINDU group of publications
Tuesday, Apr 30, 2002
IOC's coastal crude deals for SCI, Essar likely
NEW DELHI, April 29
SHIPPING Corporation of India (SCI) will get business for four of its LR II tankers of 89,000 dead weight tonnes (dwt) each under the first-ever competitively bid contract for coastal movement of crude from Indian Oil Corporation (IOC).
However, SCI has rejected IOC's suggestion to match the lowest rate quoted by Essar Shipping Ltd for the three vessels it had offered in the LR I category.
Consequently, the lone vessel offered by Essar in the LR I category at $12,000 per day is set to be accepted by IOC despite indications that the ore, bulk, oil (OBO) carrier failed to meet the technical specifications.
Great Eastern Shipping Company Ltd (GESCO) is also set to be offered a contract for an Aframax tanker in the 95,000- 105,000 dwt range at about $16,500 per day, industry sources said.
The LR II tankers in the 85,000-95,000 dwt category offered by SCI at around $14,000 per day have been accepted by IOC.
With SCI rejecting IOC's request to match the rate quoted by Essar in the LR I tankers of 65,000- 70,000 dwt range, IOC is expected to manage with the available vessels.
SCI had quoted $15,400 per day for three of its LR I tankers of 67,000 dwt each and IOC has suggested that it should scale down the rate to $12,000 per day, being the rate quoted by Essar for its OBO carrier in the same category.
The deal was likely to be announced shortly after approval from a sub-committee of the IOC board, the sources said.
All the six crude tankers of varying sizes would be hired by IOC for a period of 18 months to move the crude cargo imported from the Persian Gulf to its refineries along the coast.
SCI was so far undertaking the coastal movement of crude for IOC on a negotiated basis which is now being discarded in favour of open competitive bidding with the dismantling of the administered price mechanism (APM) for the oil sector.
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