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.
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
Ramesh Bharan ( email@example.com)