Archana Shukla

Mumbai: Focussing on its new venture in the offshore sector, LPG and crude oil carrier, Varun Shipping Company, is operating its anchor handling and towing supply vessel (AHTS) MV Suvarna for deep sea oil exploration activities in the North Sea.

The company is also exploring the option to operate a second vessel in that competitive market, where it is the first Indian company to venture.

Yudhishthir Khatau, managing director, Varun Shipping, said, “If we want to be in deep sea exploration activities, we have to look at operating in the North Sea, which is the largest spot market.”

The North Sea market for AHTS is quite volatile and the average spot market charter rates are £60,000 per day for vessels which have about 75% utilisation. However, having just started, MV Suvarna is still building up and has not reached a higher utilisation rate yet.

“We hope to reach close to 75% utilisation in the next 2-3 months and would then study the feasibility of employing a second vessel there,” Khatau said.

However, the company is facing challenges in the availability of skilled workers as they need to employ only Indian workers on board.

To help realise the utilisation, it has employed a team of Indian crew members on board, who are trained by a crew of Norwegian workers.

Khatau said apart from the problem of getting crew members, the vessel also has to make a name for itself to get more orders.

“Although we are doing much work on Indian waters, the perception of Indian offshore companies in the North Sea still needs to improve. We have a good marketing team which is looking to tackle this,” Khatau said.

Varun Shipping started its offshore division a year back and already has a fleet of three AHTS, two of which are operating in the Krishna Godavari basin in the East Coast of India.

To cash in on the opportunities in the oil exploration sector, the company has lined up major expansion in the offshore division. It plans to invest $400 million to acquire more fleet in the offshore division in FY09, of which $300 million still remain to be spent.

“The remaining $300 million would mean adding another four vessels, which we plan to acquire by this year end,” Khatau said.

The company would look at platform supply vessels (PSV), multi-purpose platform supply vessels (MPSV), along with AHTS. The company could also look at acquiring Floating Production Storage and Offloading (FPSO) vessel used in deep water exploration, only if it gets a firm contract.

The company’s FY08 financial results showed the offshore segment contributing 19.46% to the total revenue of the company as compared to 3.55% last in the last year. Offshore is an area of growth, Khatau said.

Source : DNA