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Offshore Support Vessel Company

Offshore Support Vessel Company

Offshore drilling support vessels for companies like Petronas, Shell, Exxonmobil.
These vessels are used for transporting exploration items from shore to platforms. This startup is a lucrative business and I have already spoken to a company which has vessels, and the company is based in India. If we establish a partnership with this company, and set up a local company in KL, being a local player, we can get jobs from Petronas, Shell, Exxonmobil on long term contract.

I am looking for an investor who is willing to invest in this startup offshore vessel business with initial investment of USD$ 1 million with profit sharing of 20%. We can replicate our success in international market in future like Bumi Armada who have recently won a big multi billion dollar offshore support vessel contract with Petrobras in Brasil

Description of business:
To provide offshore support vessels to cater to local oil & gas industry.

Overview of market & opportunities:
Petronas has 5 years of planned exploration activities with IOCs like Shell, ExxonMobil, TOTAL etc and there is a high demand of OSVs within Malaysia. Across our border, we have big players in Middle East like Saudi Aramco & Brasil – Petrobras, who has rendered home grown Bumi Armada a contract till 2014 (below is the website) and this has also been sited in Star Business in Jan 2012. http://biz.thestar.com.my/news/story.asp?file=/2012/1/17/business/10276051&sec=business). In Brasil, Petrobras has 80 offshore drilling platforms and have severe shortage of OSVs (http://www.offshoreenergytoday.com/brazil-petrobras-hires-bumi-armadas-ahts/)

Why my business model can generate supperior returns:
Due to severe shortage of vessels worldwide, all oil companies are looking for these OSVs globally. And they are willing to pay a premium price for these vessels.

Financial projections:
1 vessel – USD$ 20, 000 per day rental x 30 days = $ 600, 000 per month x 12 months = USD $ 7.2 mil per year for 1 vessel. So, for 3 years, expected revenue is $21.6 mil for 1 vessel. My plan is to have 10 vessels to be chartered for local oil companies which yields $210.6 in 3 years

Key managers / founders – TBA

Current status of business: Startup

Funnding required: USD$ 1- 3 million
Purpose: License fees, salaries for vessel crew workers, logostics costs to move vessel from dock to offshore, shipyard fees at Kemaman Supply Base or Pasir Gudang

Equity for shareholders: 20% p.a (negotiable)

How did I arrive at this figure: Expected growth of OSV business is ~ 20% p.a

Expected rate of return for investors: 20%

Investment risks: Very low given the exponential growth of oil & gas exploration activity. Middle East has been intensifying drilling activities. And so is Brasil and US deepwater explorations.

Exit opportunity: IPO

Contact Information

Ramesh Bharan ( ramesh.bharan@bakerhughes.com)