Mumbai: If it had not been for a difference of opinion between the Sheth cousins over the manner in which Great Offshore Limited should be run, there may not have been a Greatship Limited which, in nine shore years since its launch of operations in March 2006, has become the undisputed No.1 offshore services supplier in India.
Vijay Sheth, who was basically running Great Offshore, insisted that the company be hived off from its parent, India’s largest private sector shipowner, Great Eastern Shipping. Cousins Bharat and Ravi Sheth reluctantly acquiesced to the separation, and Vijay walked off with what was re-named GOL Offshore, while Ravi, Bharat’s younger brother, was tasked with setting up a new offshore subsidiary.
“There was virtually no time lag between the completion of the court process for divestment, and the launch of Greatship’s operations,” says the unassuming Sheth, who was given the twin roles of executive director of Great Eastern and managing director of the new entity Greatship.
“We started modestly, with the purchase of three secondhand platform supply vessels (PSVs). Had we gone the newbuilding route at the time, it would have been a strain on the company’s finances, because, once you build up a fleet, you have overheads.”
Those three, incidentally, remained the only secondhand vessels that Greatship purchased. The following year, the company embarked on an ambitious newbuilding programme, placing orders for 13 new ships.
“At the time, the market was heated, and there was a shortage of shipbuilding slots,” says Sheth. “All the good shipyards were jampacked. We ordered two platform supply vessels (PSVs) from Aker of Norway, and were actually instrumental in turning Colombo Dockyard (CDL) from a predominantly shiprepair facility into a serious shipbuilder. They eventually built 11 vessels for us.”
Today, the company boasts a 22-strong fleet – seven 80-tonne anchor handlers (AHTSVs), four D-class PSVs with the standard UT-755 design, two M-class multipurpose vessels built by Keppel in Singapore (Greatship had four initially, of which two were sold), two 150-tonne AHTSVs built in Indonesia, and six R-class remotely operated vehicle support vessels (ROVSVs).
The company also owns a new P-class PSV, a slightly larger version of the standard PSV. It also has four 350 ft four-legged cantilevered oil rigs, of which the youngest only joined the fleet earlier this month.
Greatship has left its erstwhile subsidiary, GOL Offshore, way behind. Operationally, the latter is doing well enough, but the balance sheet swims in a sea of red ink.
Greatship has no plans of adding to the fleet in the foreseeable future. Crude prices have come down to such an extent that prospecting for oil is not proving a very profitable proposition.
“Every offshore services company, without exception, is in trouble at the moment,” says Sheth, who has just resigned his position as executive director in Great Eastern Shipping, in order to concentrate all his energies on Greatship.
“Currently, we are forced to wait and watch. If this low price in oil continues for a year, there will be a lot of blood on the street, and a lot of people going bankrupt.”
The one good thing that has happened as a result of the weak oil prices is that weak offshore players are being forced out of the market. A number of vintage offshore assets are moving in the direction of the scrapyard.
“The next one to two years will witness a lot of scrapping of old offshore assets,” says Sheth. “We have been lucky in that we have a young and modern fleet, and a reasonably healthy contract coverage. In addition, we are not over-leveraged on debt, so remain reasonably well positioned.”