The Hindu Business Line : Foreign offshore ships to face tighter entry norms

Wave of regulation
It is estimated that 40 to 50 foreign offshore vessels are servicing the offshore installations of both the Government and private oil exploration companies.

Mumbai , Nov. 17

India is planning to tighten the entry norms for foreign offshore supply vessels, which are increasingly flocking to Indian waters to service the surging requirements of the offshore oil exploration companies.

As the first step, the Government will be widening the scope of the Indian Merchants Shipping Act to cover the entire exclusive economic zone (EEZ), which extends up to 200 nautical miles from the Indian coast.

Currently, the jurisdiction of the Merchants Shipping Act is restricted to the territorial waters of the country, which spreads up to 12 nautical miles from the coast.

Extending the scope of the Merchants Shipping Act would mean that any foreign vessel owners seeking to operate within the EEZ limits would have to follow the stipulated Indian regulations, including getting the required approvals from the Directorate-General of Shipping. Currently, the DG-Shipping has a jurisdiction till the 12 nautical mile limit of India's territorial waters.

In other words, with all offshore installations of the oil exploration companies located within the 200 nautical mile boundary of the EEZ, foreign vessel operators would have to necessarily come through the DG-Shipping for commercial operations in Indian waters.

Extension of the scope of the Merchants Shipping Act would be followed by the formulation of a separate offshore maritime support policy. In fact, the Indian National Shipowners Association (INSA) has already prepared a suggestive draft policy on this with the help of a reputed consultant having expertise in this sector.

Level playing field

For the Indian shipping industry operating in the offshore space, this would mean getting a level playing field with its overseas competitors. Increase in offshore exploration activities has led to several foreign operators freely setting up operations within the Indian EEZ, without having to go through approvals or licences.Sources told Business Line that the proposal to extend the scope of the Merchants Shipping Act is with the Ministry of External Affairs, which is expected to issue a notification on the matter soon. The notification would effect necessary amendments to the Indian Maritime Zone Act, which specifies the boundaries of India's territorial waters and the EEZ. This, in turn, will pave the way for extension of the scope of the Merchants Shipping Act.

With offshore oil exploration activities surging on the domestic front, the requirement of offshore support services, such as offshore vessels, anchor handling tugs and rigs, has increased manifold in the recent past. This has prompted many foreign operators in this space to flock to offshore installations around the Indian coast.

It is estimated that 40 to 50 foreign offshore vessels are servicing the offshore installations of both the Government and private oil exploration companies. Foreign companies such as TransOcean, Saipem, Sinvest, Noble, Atwood Beacon and Dolphin Drilling have supplied rigs on contracts, while other companies such as Tide Water, Viking Offshore, Mubarak Marine, Inter-Gulf Marine and Rolv Berg AS are operating offshore supply vessels.

Sources said anticipating this development, many of these companies are either mulling setting up Indian subsidiaries or operating through Indian companies. For example, Tide Water has set up an Indian subsidiary, Rolv Berg a representative office in India, while Noble is operating through an Indian outfit.