16 May 2010

Sri Lanka Hemas and Dockyard with Singapore's Toll Bid for Oilfield Services of Cairn India

14th May 2010, www.lankabusinessonline.com

Sri Lanka's Hemas group and Colombo Dockyard have teamed up with Singapore's Toll Offshore Petroleum Services to bid for Cairn India's contract for offshore oil field support services, officials said.

"Hemas Holdings, Colombo Dockyard and Toll Offshore Petroleum Services have jointly placed a bid for the offshore supply base for Cairn," Irshad Mushin, director - maritime transportation of Hemas group told LBO.

"We have proposed viable sites in Sri Lanka."

Cairn Lanka, a unit of Cairn India, which is part of Britain's Cairn Energy, has called for expressions of interest and pre-qualification for provision of services to support its exploration effort.

Cairn has called for support for drilling, testing and completion of exploratory wells in a deep-water block in the Mannar Basin off north-west Sri Lanka.

Cairn plans to start drilling test wells by January 2011 to May 2011.

Colombo Dockyard managing director Mangala Yapa said offshore oil explorations in Sri Lankan waters gives good opportunities for both engineering and shipping companies.

"Colombo Dockyard is confident we can be involved in some of the engineering and other logistics requirements, especially because we have a fully-fledged engineering facility within Colombo port," he told LBO.

"Even at present we are repairing many offshore vessels from India's offshore industry."

The yard also builds offshore support vessels and is therefore aware of the requirements, Yapa said.

"Our role would be to provide all possible engineering and other logistical assistance for Cairn along with other partners."

Toll Offshore Petroleum Services is a subsidiary of Toll Asia, which is part of Toll Holdings, a big transport and logistics group headquartered in Australia.

It owns and operates offshore supply bases in Azerbaijan, Cambodia, China and Thailand.

Sri Lankan companies are keen to get Cairn's offshore support contract as it means new business in the new field of oil exploration.

It will also position them to offer similar services when exploration and drilling gets under way in other blocks in the Gulf of Mannar as well as in waters off the northern and southern coasts.

Sri Lankan firms would have to compete with firms in India which has an established offshore oil industry.

Oil explorations firms are expected to source some of their requirements from local industry in order to ensure the benefits of oil are shared in the domestic economy and also provide employment for locals.

Among the services requested by Cairn are anchor handling tugs, supply vessels and offshore supply barges.

Cairn Lanka has also called for rig positioning and site survey services, supply of fuel and water, provision of local logistic support such as cranes, port clearances, boat calls, and offshore supply base services.

Another service requested is air logistics which will provide opportunities for helicopter services offered by local aviation firms, officials said.

Cairn's exploration licence to explore for oil and natural gas in the Mannar Basin covers about 3,000 square kilometres in water depths of 200-1,800 metres.

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