Indian Oil Corporation (IOC) is expected to place an order for at least 10 medium-range oil tankers through a joint venture led by the Shipping Corporation of India (SCI), with the vessels to be constructed at an Indian shipyard, sources familiar with the matter said.
Focus on Domestic Shipbuilding
India, the world’s third-largest oil importer and consumer, relies heavily on chartered vessels to transport its energy supplies. Driven by the government’s push for secure energy supply lines, IOC and other state-owned oil companies had initially explored establishing a domestic shipping company to build vessels locally. Constructing ships in India is seen not only as a step toward energy security but also as a way to generate employment. However, the plan faced delays due to limited shipbuilding expertise and competition from cost-effective Chinese-built vessels.
Joint Venture and Aframax Vessels
IOC’s plan has now evolved. The company is likely to purchase 10 Aframax vessels, each with a capacity of 80,000 to 120,000 deadweight tons, from a joint venture involving SCI and an Indian shipyard, possibly Cochin Shipyard. Other state-owned oil firms may follow a similar path.
Strategic Timing and Shipbuilding Initiatives
The announcement may coincide with Prime Minister Narendra Modi’s upcoming launch of India’s global shipbuilding bid from Bhavnagar, Gujarat. Plans include a revamped Ship Building Financial Assistance (SBFA) scheme, a Rs 25,000 crore Maritime Development Fund, and a Rs 20,000 crore initiative to develop shipbuilding clusters across Gujarat, Andhra Pradesh, Odisha, and Maharashtra.
Long-Term Fleet Modernization
Sources estimate that Indian oil companies will need a total of 112 crude carriers by 2040 to replace an aging fleet, much of which is currently chartered from foreign companies. The first phase involves procuring 79 vessels, including 30 medium-range tankers, aiming to increase the share of locally built oil tankers from 5 per cent at present to 7 per cent by 2030, and around 70 per cent by 2047. The joint venture will produce these ships in Indian shipyards, with SCI managing the fleet’s operations.
Global Collaboration Interest
International players, including South Korea’s HD Hyundai Heavy Industries and Samsung Heavy Industries, as well as Japan’s Mitsui OSK Line and NYK Line, have shown interest in partnering with Indian shipyards like Cochin Shipyard to build vessels locally.
