ABG into rig production

With oil exploration and production on the increase, Indian shipbuilder ABG Shipyard is planning to foray into offshore jack-up rig manufacturing. The company is setting up a facility for the production of jack-up rigs at its new shipyard in Dahej, Gujarat.

“We are in talks with two US-based oil rig manufacturers for technological tie-up for entering offshore rig construction. We will invest over $87.5 million for the proposed facility,” Managing Director Rishi Agarwal said. Agarwal said the company would raise $125 million through external commercial borrowings shortly. “Over $90 million will be spent in the offshore facility and the balance in the phase II development of the Dahej yard. We will ink an agreement with a US company for technological support by the end of this month,” he said. ABG will be able to build rigs with operating water depth of 350 feet and drilling capacity up to 30,000 feet.

Earlier, Bharati Shipyard had also entered into the offshore jack-up rig construction market and had signed an order with Great Eastern Shipping Company?s offshore division to manufacture and supply of a self-propelled, cantilever-independent leg jack-up drill rig.

According to industry analysts, there are only 10 manufacturers for high offshore jack-up drill rig. ABG Shipyard?s entry into the sector comes when domestic majors are crowding the offshore space scouting for brand new oil rigs at a cost of around $197 million each.

Keppel FELS in Singapore is the world?s leading shipyard building jack-up rigs and controls about 70% of the world?s new buildings order book.