India tightens entry rules for offshore ships registered abroad

This is seen as another attempt by the regulator to raise the profile of the Indian entity among the global shipping community over a key aspect of ship operations

Source:Live mint

Bangalore/ Mumbai:India has further tightened entry rules for foreign ships used in offshore exploration and drilling activities along the country’s coast.

Maritime regulator, the Directorate General of Shipping, has made it mandatory for foreign-registered ships seeking work in India to be classed with the country’s classification society, the Indian Register of Shipping, or IRS.

This is seen as another attempt by the regulator to raise the profile of the Indian entity among the global shipping community over a key aspect of ship operations.

“The decision will lead to dual classification of offshore ships and add to the costs of oil and gas exploration firms,” said an industry official who asked not to be named.

Classification societies set technical rules on safety and protection of ships, confirm that designs and calculations meet these rules, survey ships and structures during construction and commissioning, and periodically survey vessels to ensure they meet the rules as per the requirements of the International Maritime Organization, or IMO, the global maritime regulator.

Ships not classed with or certified by a classification society are not allowed to take to the sea.

Foreign ships are normally classed with one of the 10 full-time members of the International Association of Classification Societies, or IACS, the main global body of classification societies. IRS is an associate member of IACS.

The classification rule is the latest in series of regulatory tightening. Earlier this month, the Indian maritime regulator decided to revoke permission granted to six of the 10 full-time IACS members to undertake statutory surveys of India-registered ships.

It also ruled that foreign registered offshore ships working in India’s territorial waters should be less than 25 years old. Such ships should be inspected and any deficiency rectified before they enter the Indian waters.

India-registered ships are exempt from this rule as they are already registered and licensed to ply in Indian waters.

Local laws give preference to ships registered in India for operating on the country’s coast. Foreign-registered ships can be hired to operate along the coast only in case of a shortage of Indian ships, with the approval of the maritime regulator.

Foreign shipowners say the rule is “discriminatory” and adds to the cost of operations, but local shipowners say the rule should have come long ago.

“Our ships are also subjected to similar rules in other countries. Moreover, old foreign offshore ships that are not allowed to operate in the North Sea and Gulf of Mexico come here and pollute Indian ports and harbours. Such a rule was long overdue,” said an official with state-run Shipping Corp. of India (SCI), who asked not to be named.

SCI owns 10 offshore ships that have been leased to state-owned oil and gas explorer Oil and Natural Gas Corp. Ltd (ONGC). The presence of older foreign ships had helped ONGC hire 30 offshore vessels for a new five-year contract beginning March 2007 at 30-40% below market rate.

Oil explorers would now have to spend more for hiring younger vessels as new ships costs more to hire.

p.manoj@livemint.com