Great Offshore close to Rs 2,000cr buy

Move aimed at cashing in on shortage of drilling rigs.

Great Offshore Ltd (GOL), the Mumbai-based integrated offshore oilfield services company, has made an offer to purchase a controlling stake in an unnamed overseas company. The deal size, according to industry sources, is expected to be over $500 million (around Rs 2,000 crore).

The overseas company will own two semi-submersible drilling rigs (upon delivery) that are estimated to cost around $1.40 billion. At present, the sixth generation rigs are under construction, GOL informed the BSE today.

The transaction is subject to completion of due diligence and approvals both in India and overseas. Motilal Oswal Investment Advisors was the advisor and Luthra & Luthra the legal advisor for the transaction.

According to industry sources, GOL was looking at acquiring oil rigs and stakes in oil rig companies for sometime. Oil and gas exploration and production companies such as Reliance Industries and ONGC are facing a shortage of drilling rigs and rig construction yards are overbooked till 2011. GOL is looking at supplying rigs to these firms.

The company was in advanced talks to acquire two Norwegian companies — Scorpion Offshore and Petrojack — for around $500-550 million, and had appointed Motilal Oswal as consultants. However, the name of the acquired company could not be ascertained.

When contacted GOL and Motilal Oswal executives declined to comment on the deal, stating that only an offer has been made, and the deal was yet to be signed.

Earlier on January 3, 2008, GOL took delivery of a flat cargo carrier, increasing the total number of its fleet to 41 vessels.

Great Offshore was formed by a demerger of Great Eastern Shipping Company’s offshore business. Other leading rig services companies in the country include Aban Loyd, Greatship India (a subsidiary of GE Shipping), Mercator Lines and Jindal Offshore.

The company’s stock prices rose 1.28 per cent on Tuesday to close at Rs 1,093.50, compared with the previous day’s close of Rs 1,079.70 per share.