1. Mercator Lines Limited (Mercator), second largest private sector shipping company in India, has forayed into the offshore business by placing an order worth appr. Rs 810 crore (about USD 180 mn) with M/s Keppel FELS of Singapore for construction of a premium Offshore Jack up Oil Rig suitable for worldwide drilling.
2. Keppel FELS is the leading shipyard of the world building Jack-up Rigs and control about 70% of the new buildings order book of the world. Keppel operates 16 yards across Asia-Pacific, the Gulf of Mexico, Brazil, the Caspian Sea, Kazakhstan, the Middle East and the North Sea, building jackup rigs, semi-submersibles and other specialized offshore requirements.
3. Says Mr H K Mittal, Chairman & Managing Director, Mercator Lines Limited, "With increasing demand for energy all over the world, offshore exploration for oil and gas will remain an important activity for offshore and marine businesses. Mercator hopes to benefit from a growing demand for oil rigs. Furthermore, in view of all time high oil prices; oil companies are ramping up exploration and developing fields that made little economic sense in the past. There is also the need to replace an ageing fleet of rigs, as nearly 80% of fleet is more than 20 years old."
4. To be delivered by March 2009, the rig will meet operational requirements in water depths of up to 350 feet and readily upgradeable to 400 feet. This premium jackup rig will have a drilling depth of 30,000 feet and can accommodate 112 men.
5. Adds Mr Mittal, "The offshore and marine engineering sectors are expected to play much bigger role in India's economy in the years to come."
6. Recently Mercator has bagged a contract worth about Rs 250 crore from Mangalore Refineries and Petrochemicals Ltd (MRPL) for transportation of crude from the Arabian Gulf to the Indian coast. The contract - under execution - involves transportation of about 8 million tonnes of crude for which the company plans to deploy own and chartered Aframax vessels.
7. For the nine months ended Dec'05 Income from operations of Mercator has increased to Rs. 593.92 crore representing a growth of about 53% over previous corresponding nine months period of Rs. 388.24 crore. The Operating Profits (PBIDT) has also increased by about 75% to Rs. 254.87 crore as compared to Rs. 145.63 crore during the corresponding previous period ended December 2004. In spite of huge increase in Interest cost (260%); Depreciation (227%) and taxation (72%); the Net Profit at Rs. 135.95 crore have resulted into increase of about 23% over corresponding previous period of Rs. 110.30 crore.

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