Jan. 16 (Bloomberg) -- Great Offshore Ltd., spun off from India's biggest sea carrier, agreed to buy an overseas oil services company, gaining two rigs under construction at a time a global shortage is pushing up rental rates.

The unidentified acquired company will own two semi- submersible rigs worth a combined $1.4 billion when completed, Great Offshore said in a statement to the Bombay Stock Exchange. The takeover offer was accepted, the Mumbai-based company said.

``It will catapult Great Offshore to the extremely lucrative deepwater drilling segment with class assets in hand,'' said Ajit Motwani, an analyst with Emkay Share & Stock Brokers Ltd. in Mumbai said in a phone interview. He named the company being acquired as U.K.-based SeaDragon Offshore Ltd. in a report today.

SeaDragon Chairman Stephen Baird wasn't available to comment. Buchanan Communications' Bobby Morse, listed on press releases on SeaDragon's Web site, said he would respond later.

India last week started offering a record 57 oil and gas areas even though rig shortages have forced Reliance Industries Ltd. and Oil& Natural Gas Corp. to curb exploration in existing blocks. A boom in exploration in Asia's fourth-biggest economy tripled rig usage over the past four years.

Great Offshore may pay more than $500 million for the overseas company, the Business Standard reported today, citing industry sources it didn't identify. The company could supply rigs to Reliance or Oil & Natural Gas, the newspaper said.

Adding Revenue

SeaDragon has signed a $958 million contract to lease the ``Oban B'' oil rig to PEMEX Exploration and Production for five years, Motwani wrote in a note to clients today. The two rigs can generate revenue of $350 million, though will only add to earnings in the year ending March 2012, he said.

SeaDragon will own two rigs that match the description in the Great Offshore statement, according to its Web site. The first vessel will be available in the fourth quarter of next year and the second will be delivered in September 2010 and is still available for charter, according to the Web Site.

Great Offshore gained as much as 2.9 percent before falling 3.54 percent, or 38.75 rupees, to 1,054.75 rupees on the Bombay Stock Exchange, compared with a 2.8 percent drop in the benchmark Sensitive Index.

The company was separated from Great Eastern Shipping Co. in 2006.

The financial adviser for the transaction is Motilal Oswal Investment Advisors Pvt. and Luthra & Luthra provided legal advice, the company said.

Vijay Sheth, managing director at Great Offshore, wasn't immediately available for comment.

To contact the reporters on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net; Gautam Chakravorthy in Mumbai at chakravorthy@bloomberg.net.

Last Updated: January 16, 2008 04:51 EST