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Amit Mitra

Mumbai , Dec. 31

THE new offshore maritime policy that the Ministry of Shipping is in the process of drafting may have the Indian ship owners and the domestic oil companies lock horns again.

For, the ship owners, through the new policy, will be seeking to tighten the freedom of the oil companies to charter foreign offshore supply vessels (OSVs) and oil rigs.

Informed sources say the shipping companies would be seeking to extend the offshore maritime policy from the territorial waters to the Indian Exclusive Economic Zone (EEZ) so as to cover the entire offshore installations of the oil companies. Once this is approved, the offshore installations would be bound by various aspects of the policy, including the cabbotage rule that would make it mandatory for oil companies to give the first right of refusal to Indian shipping companies for chartering of OSVs, MSVs (multi-support vessels) and rigs.

The Indian National Shipowners Association has appointed Tata Economic Consultancy Services to assist in the preparation of the draft offshore maritime policy, as advised by the working group on the subject set up by the Ministry of Shipping. Expected to be ready by mid-January, the draft will then be submitted to the Shipping Ministry, which will subsequently seek the views of the Petroleum Ministry before sending it for final Cabinet approval.

The sources said a move to extend the policy beyond the territorial waters (up to 12 nautical miles from the coast) to cover the Indian EEZ (up to 200 nautical miles) would not go down well with the oil companies. As it is, PSU oil companies have been seeking changes in the existing laws to enable them to make their own shipping arrangement for transportation of crude and petroleum products without having to go through Transchart, the chartering wing of the Ministry of Shipping.

Oil companies in India at present have about 100 OSVs to service their offshore installations, with ONGC alone deploying 61 such vessels for its exploration activities. Out of the 61 deployed by ONGC, 31 OSVs belong to the company but managed by shipping companies, while the remaining are on charter basis.

With India's offshore oil and gas exploration picking up momentum, a string of foreign-flagged OSVs are now in operation on a regular basis within the Indian EEZ. Out of the 100 OSVs in operation at present, about 40 belong to foreign operators such as Maersk Offshore, Tide Water and Stenmar Offshore.

Industry sources said the foreign players were deploying older vessels in their fleet so as to compete with the Indian ship owners.

"For example, an OSV deployed, let us say, in the North Sea would fetch its owner about $14,000 per day, while in India it will not be more than $5,500 per day. So, for a foreign OSV owner to compete here, he has to essentially deploy older vessels to remain in the market," an industry source pointed out.

With the demand for offshore vessels set to increase in the domestic market, Indian ship owners will try to push through the offshore maritime policy. Shipping companies in the offshore business have been making significant investments, notably Great Eastern Shipping, which has eight new offshore supply vessels on order. Shipping Corporation of India, which has 10 OSVs on charter with different oil companies, is also in the process of estimating the future requirement as a prelude to its fleet renewal programme.

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