SCI, ONGC plan revival of JV for vessel operations

Shipping Corporation of India (SCI) and Oil and Natural Gas Corp (ONGC) are planning to revive a proposed joint venture (JV) for services related to vessel operations and are working on hiring a consultant for the purpose.

“We will now work towards effecting a joint venture with ONGC on a fast track basis. We would also hire a consultant soon,” a senior official of the Navratna shipping company told PTI.

In 2006, SCI and ONGC had signed a memorandum of understanding to float the joint venture company, Offshore Marine Services (OMSL). OMSL was to provide “end-to-end solutions in vessel operations"”for ONGC as well as other oil and gas companies.

OMSL was to develop capabilities for acquisition, repair and maintenance of offshore floating units and for undertaking repair and construction on long-term arrangement with various shipyards on preferential terms.

The official, however, declined to provide the details of the equity structure of the JV firm that was being revived.

In the proposed joint venture, OMSL, the two public sector undertakings were to have 24.5 per cent stake each, while PSA Marine, a wholly-owned subsidiary of the Singapore government’s PSA International, was to acquire 21 per cent stake. The remaining 30 per cent was to be held by financial institutions.

According to the earlier Memorandum of Understanding (MoU), PSA Marine was to provide repair services to vessels.

PSA Marine, however, backed out from the venture in 2006 itself.

According to the agreements signed then, the upstream oil company would give its vessels on bare boat charter agreement to OMSL and would retain the right of first refusal on their deployment.

The JV firm would acquire, own, maintain, operate and charter a range of offshore vessels and could also take non-ONGC business, including acquiring vessels and other assets.

With SCI now holding the Navratna status, it would be able to pursue the JV project with greater flexibility as the company’s board has been given more powers to enter into ventures with both domestic as well as foreign firms.