Mercator Offshore wants to buy up to five jack-up rigs

Vol 10, PW 23 (22 Mar 07) Exploration & Production

Ambitious Mumbai-based shipper Mercator Lines wants to secure a slice of the booming offshore rig business.

Mercator Offshore, the company’s upstream service provider, has drawn up a business plan to buy between three and five jack-up rigs. “They want to have a fleet of up to six rigs by 2010,â€‌ we hear.

Most of these will be 350-feet cantilever jack-up rigs, “which are the hottest item on the market now.â€‌ India will be Mercator’s main market but the company is also ready to hire out rigs to overseas contractors.

“For the Indian market Mercator has to build rigs with ONGC in mind,â€‌ says a source. “Rig delivery schedules have to match ONGC’s mobilisation requirements.

â€‌ Mercator’s plans are being upset because ONGC’s rig hiring tenders “are getting delayedâ€‌ for some reason or the other.â€‌ Mercator-1, the first rig in the company’s fleet is under construction at Singapore’s Keppel shipyard and should be ready by early 2009.

Mercator-1 is being offered in ONGC’s ongoing tender to hire new-built jack-up rigs on a five-year contract. This rig is a Keppel FELS Mod 5, 350-feet jack-up with a 15,000-psi stack for the Blow Out Preventor.

Mercator is also in talks with Larsen & Toubro, which is setting up a rig-building yard in Oman. “Mercator want new rigs from L&T,â€‌ says a source.

“Nothing has yet been finalised.â€‌ Discussions began after L&T approached Mercator with a proposal to build Friede & Goldman rigs for which it has a licence.

F&G category rigs are hotly sought after by ONGC, which has been unsuccessfully trying to source them from the market. Talks between Mercator and L&T are still underway, but says a source, “Mercator is unlikely to go ahead with L&T because of delivery schedule issues.

â€‌ Time is the crucial factor for Mercator and the company is not sure if L&T can commit or fulfil a commitment to deliver rigs within two years. “It takes a minimum 30 months to build a jack-up,â€‌ says a source.

“L&T have not built rigs for anyone else.â€‌