Domestic power equipment major Bharat Heavy Electricals Ltd (Bhel) is planning to diversify into manufacturing of deep and ultra deep water oil rigs. Bhel has initiated talks with overseas rigs manufacturers for a technology tie up and has proposed a joint venture arrangement to undertake this diversification.
Refusing to divulge any names, chairman and managing director Bhel Ravi Kumar said the company has been in talks with two leading firms for a technology tie-up to manufacture offshore oil rigs.
The Bhel chairman said he has offered a majority stake to its JV partner for manufacturing offshore rigs We have not been able to make any progress so far as there are some issues over technology transfer. The proposal is at a nascent stage and depending on the success of our talks over technology transfer, we will firm up our plans in this regard, he added.
In the meanwhile, we will concentrate on our onshore rigs business. We will soon sign a contract with ONGC for refurbishment of onshore rig at the cost of Rs 900 crore. Besides, Bhel is also expected to get contract for onshore rig in the Gulf region, Ravi Kumar said.
Ravi Kumar said Bhel is in the midst of setting up JVs for forgings and castings and also for railway coaches besides manufacturing of photovoltaic wafer.
All the diversified activities envisage an investment of around Rs 3,000 crore, he said.
Bhels entry into the offshore rig manufacturing is crucial especially when ONGC and RIL have sought rig holiday for want of availability of deepwater and ultra deepwater rigs in the global market. In fact, RIL has already announced its plans to make its foray into offshore rig manufacturing.
Ultra-deepwater rigs can drill in water depths of over 1,000 metres. There is an acute shortage of such rigs worldwide leading to spiralling of dry-rates.
According to Transocean, the worlds largest rig operator, Reliance currently has ultra-deepwater floaters Deepwater Frontier and Discoverer-534 at its disposal till 2010 and 2011.
Besides, Bhel proposes to tap emerging opportunities in the solar energy and enter into solar energy for the production of necessary equipment.
Bhel plans to foray into photo voltaic wafer manufacturing, Ravi Kumar said.