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• Port operations and marine services company Ocean Sparkle Ltd has decided to enter the offshore vessel supply market on its own after dropping plans in January to buy TAG Offshore Ltd.Hyderabad-based Ocean Sparkle had carried out due diligence for a possible take-over of TAG Offshore, a Mumbai-based firm that runs a fleet of 14 ships used to support offshore oil exploration activities.The firm, promoted by a group of marine professionals, is now looking at forming a joint venture (JV) with an experienced offshore company to enter the business of supplying ships used to support the offshore oil industry, a business that is reserved for India-registered ships.
• “We are looking at a JV with an experienced firm to enter the offshore sector. The JV can buy assets to execute contracts,” P. Jairaj Kumar, chairman and managing director, Ocean Sparkle, said in a phone interview from Hyderabad. “We are in discussions with potential partners to form a JV. Buying offshore assets is not an issue at all.”One of the main reasons that led Ocean Sparkle to look at TAG Offshore was to have an experienced company within its fold on which it could piggyback to take up offshore contracts.“We fulfil the financial criteria required for offshore vessel supply contracts, but we do not have the experience criteria,” Jairaj said. “The TAG Offshore deal did not happen for some reasons,” he said, without elaborating.
• One of the potential JV partners could be PSA Marine (Pte) Ltd with whom Ocean Sparkle has three JVs—Sea Sparkle Harbor Services Ltd, Sealion Sparkle Maritime Services Ltd and Sealion Sparkle Port and Terminal Services (Dahej) Ltd—for various services at the Mormugao, Ennore and Dahej ports, Kumar said.
• PSA has experience in operating offshore vessels.Kumar said Ocean Sparkle will stick with the offshore supply vessel market and had no plans to enter the jack-up rig market.Ocean Sparkle, an unlisted firm, provides support services to incoming and departing ships, such as pilotage, anchoring and berthing, and also undertakes dredging contracts.It owns and manages a fleet of 82 vessels, comprised of 59 tugs, five dredgers, five barges, five mooring boats and eight pilot launches that service clients including Reliance Port and Terminals Ltd, Petronet LNG Ltd and various ports, according to its website.“The medium- to long-term fundamentals of the general offshore market outlook in Asia remain intact, supported by exploration and production spending and a resilient oil price,” Kay Lim and Simon Jong, analysts at DNB Markets, a unit of Norway’s DNB Bank ASA, wrote in a 2 February report on the Asia offshore sector.
• “In our opinion, oil companies are unlikely to cut back on existing projects, having already reached a final investment decision and the long-term nature of these projects, averaging in excess of five years, providing support for activities. With oil prices staying at a relatively sustainable level, averaging $100 per barrel, the conventional oil and gas projects and deepwater projects remain highly profitable, based on the cost of production,” they wrote.“In the offshore supply sector in Asia, we maintain our view that 2012 will be a major turning point in the offshore supply vessel sector, an inflection point where the demand-supply balance will tighten further, in turn driving up rates and utilization of ships,” they wrote.

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