Varun Raises Focus on Offshore Services as Energy Demand Lures Explorers

Varun Shipping Ltd., India’s largest owner of liquefied petroleum gas tankers, plans to boost its focus on deepwater offshore support operations as oil companies increase exploration because of rising domestic energy use.

“We want to be the biggest player in the deepwater offshore supply business” in India, Managing Director Yudhishthir Khatau said in an Aug. 21 interview in Mumbai. “Since most of the near-shore oil has been tapped already, deepwater exploration is where the action is.”

Varun intends to boost offshore operations by better utilizing its seven support ships rather than by expanding its fleet, Khatau said. Shipping Corp. of India, the nation’s biggest shipping company, is adding offshore vessels as economic growth encourages Oil & Natural Gas Corp. and other oil companies to increase drilling in the seas around India.

Varun, which also operates 13 tankers, has no plans to order new ships to preserve cash, Khatau said. The company could make “very strategic and selective acquisitions,” he said, without elaboration.

Shipping Corp., which has a fleet of 10 offshore vessels, plans to add another eight in the next two years.

Varun rose 0.6 percent to 43.05 rupees at 11:19 a.m. in Mumbai trading. The company has tumbled 24 percent this year.

Oil & Natural Gas, is drilling in offshore areas including the Krishna-Godavari basin off India’s east coast. The company planned to spend $3.3 billion increasing production at oil fields, Chairman R.S. Sharma told shareholders at the company’s annual general meeting in September.

To contact the reporter on this story: Siddharth Philip in Mumbai at Sphilip3@bloomberg.net

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