Essar Shipping To Go On Rig Buying Spree

Essar Shipping and Logistics Ltd plans to invest approximately $400 million to acquire onshore and offshore drilling rigs. The Cyprus-based firm has formed Essar Oilfields Services Ltd. for this purpose. The newly formed entity will focus on international and Indian onshore and offshore oil and gas drilling.

EOSL's investment plan includes acquisition of a diversified fleet of rigs, for onshore and offshore drilling.

Essar want to cash-in on the increase in oil and gas exploration and production activity around the world, including in India. Increased E&P activity has seen rig utilization rates in excess of 98%.

"This demand for the drilling rigs is forecast to sustain over the next 3-5 years. The contract drilling rates have nearly doubled in the last three years and we forecast they will remain robust," according to a statement from Essar.

EOSL, whose operations are run out of its office in Dubai, UAE, will manage Essar's rigs for its own E&P activities as well as contract drilling for third parties.

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