The Hindu Business Line : ONGC, SCI firming up equity structure for joint venture

New Delhi, Aug. 27 ONGC and the Shipping Corporation of India (SCI) are firming up the equity structure for the joint venture company that they plan to set up for providing offshore services.

The two public sector units had entered into a memorandum of understanding for setting up a joint venture company called Offshore Marine Services Ltd in 2006, but the project was put on backburner.

The proposed company was to provide end-to-end solutions for vessel operations for ONGC and other oil and gas companies.

Additionally, it would also get into acquisition, repair and maintenance of offshore floating units, apart from undertaking repair and construction, on long-term arrangement, with shipyard facilities on preferential terms and competitive basis.

According to a senior ONGC official, “We are working out a fresh equity structure. SCI, with financial institutions and others, is likely to have 50 per cent equity; ONGC will have 25 per cent equity and the rest of the equity will be with a third partner.”

According to a senior SCI official, “The proposal has revived. We have had several rounds of meetings. But nothing has been finalised as yet.”

Agreement details

According to the MoU, ONGC will offer its vessels on bare boat charter agreement to the joint venture company and will retain right of first refusal on deployment of these vessels according to requirement. The joint venture company will acquire, own, maintain, operate and charter a wide range of offshore vessels and it will also be free to secure non-ONGC businesses, including acquiring vessels and other assets. ONGC will also have the option to acquire new vessels and put them in the joint venture company on similar agreement.

About two years ago, when the MoU was signed, another partner PSA Marine (Singapore), a wholly-owned subsidiary of a Singapore Government company PSA International, was to provide repair for the vessels.