Essar Oil Sells Pipelay Barge For $8.2 Million
Initiating the process of withdrawing from offshore drilling and pipe-laying activities, Essar Oil has sold LB 207, a pipelay barge at $8.2 million to Trans Coastal Vessels Inc., USA. The deal was signed early this year.
This has reduced Essars presence in offshore activities to a support vessel (scanlay barge) and an offshore rig.
Industry sources indicate these units are also on the block with underwriters sounding off international buyers for a sale. Valuations have been done and the company is waiting for a good price.
Also Read
The pipelay barge and related equipment was rolled out of the Mumbai port last week. The barge is expected to be upgraded in the US and will later reach Brazilian waters for laying pipelines.
When contacted, Essars spokesperson confirmed the deal. However, he pointed out that there are no rigs or scanlay barge with the offshore division.
The LB 207 pipelay barge was bought by Essar for $7 million in 1991. The spokesperson pointed out that the company was moving out of the offshore activities to concentrate on the onshore division.
Essar had indicated its intention to pull out of offshore activities way back in 1995. It had sold two of its rigs Essar Explorer and Essar Discoverer to a US investment company, Novele. The Essar Explorer fetched Rs 90 crore for the company.
Sources claim that the Essar has put Rs 300 crore for the rest of the equipment, rig and scanlay barge. However, market observers claim the companys price is high as the international offshore market is hit by the currency crisis in south-east Asia.
Meanwhile, the sale of LB 207 has eased the liquidity crunch for the company. Essar Oil is now busy with construction of 10.5 million tonne per annum petroleum refinery at Vadinar in Gujarat. Based on imported crude, the refinery will process crude for light distillates like petrol, liquified petroleum gas and aviation fuel. The refinery is scheduled to commence operations sometime in June 1999.