BHEL talking to L&T, Pipavav to revive off-shore rig biz

NEW DELHI: The state-run BHEL is in talks with private companies like Larsen & Toubro and Pipavav Shipyard to jointly build off-shore oil rigs, a business proposition it had shelved earlier, says a company official.

"We are talking to various private players for manufacturing (off-shore) oil rigs... we are talking to L&T and Pipavav," the official said.

The company had earlier decided to quit its deep water oil rig business as it was unable to find a suitable partner due to investment constraints.

The plan to revive the business follows the revival in oil prices on the back of signs of the improving economic scenario which in turn has revived exploration business and the resultant increase in demand for oil rigs.

The Navratna power equipment major would soon start talks with the upstream oil companies like ONGC and Oil India for supplying deep sea oil rigs. "We would be approaching the oil companies for supplying the components," the official said.

BHEL chairman and managing director BP Rao, who assumed office on October 1, 2009, also had said that the company would revisit its off-shore oil rigs business. "We would approach some shipyards for providing equipment for manufacturing off-shore oil rigs," he had said.

BHEL is currently engaged in on-shore oil rigs business and has plans to expand it further.

In 2004, BHEL signed an MoU with Oil India to refurbish and upgrade the land rigs. The company has so far manufactured and supplied over 80 drilling and well servicing rigs to both ONGC and Oil India.