Aban Offshore wants a play in Ennore LNG project
New Delhi   25-Sep-2010

Aban Offshore, which once wanted to put up an LNG terminal project at Karaikal, Tamil Nadu, but later gave up the idea, now wants a play in IndianOil's Ennore LNG project.

“We have written to GAIL and IOC,” Mr Reji Abraham, Managing Director, Aban Offshore, told Business Line on the sidelines of the company's annual general meeting here today. Aban is trying to sell the idea that the terminal could come up on (its) floating platform in the sea, rather than on the land – a kind of a single-buoy mooring. The project proponents could thereby avoid purchase of land and getting approvals.

Public sector IndianOil has just begun work on the $650-million project that would enable importation of 2.5 million tonnes of LNG at Ennore. The project is expected to be completed in 2015.

Venezuela job

It may be recalled that in May, drilling rig Aban Pearl, which was doing a lucrative, $350,000-a-day job for PDVSA of Venezuela, sank. Aban Offshore has since recovered almost all of the cost of the rig ($350 million) from the insurers, but the loss of revenue from thecontract remains.

Mr Abraham had told Business Line earlier that the company was in the process of buying or hiring another deep water rig from the market to deploy it for completing the PDVSA contract.

Asked about it, Mr Abraham said today that a rig has since been selected and got approved by the Venezuelan authorities.

However, it has not yet been put on the job because the Venezuelan Government first wants Aban Pearl to be picked up from the sea-bed.

“It is not our job; it is the job of the insurance companies, but the Venezuelan Government has asked us to co-ordinate the work,” he said, adding that the other rig would be put into service as soon as the salvage operations of Aban Pearl are over.

The key message of this is that the contract is still alive and Aban could still hope to earn revenues from Venezuela.

Today, shareholders approved two resolutions enabling the Aban Offshore board to raise Rs 2,500 crore and $400 million by issuing appropriate instruments.

Mr Abraham said later that it was “just an enabling resolution.”

However, he said that several private equity funds were “after us” for picking up stake in Aban. Should a good opportunity to acquire a rig arise, Aban would raise funds to take it, he said.