Sri Lanka dockyard seeks to diversify away from offshore vessels

ECONOMYNEXT – Colombo Dockyard is looking to diversify away from making offshore support vessels (OSVs) for the petroleum industry and build other types of vessels like passenger craft given the prolonged slump in oil prices, its chairman has said.

“We have already received several inquiries from adjacent countries in connection to the assembly of passenger boats, barges and other vessels unrelated to oil drilling and OSVs,” Toru Takehara said.

Colombo Dockyard has in recent years specialised in the manufacture of offshore support vessels catering to the oil industry and in oil drilling and exploration operations in particular.

“Given the performance of oil prices, which dropped to historic lows in 2015, demand for OSVs has negatively affected our performance,” Takehara told shareholders in the firm’s annual report.

The ship yard industry performance is currently linked very strongly to the performance of oil markets and oil prices will stay at reduced levels over the short-medium term horizon, he said.

The yard reported a loss last year after Singaporean clients serving the oil industry cancelled one OSV and negotiated reduced prices for three remaining vessels to be delivered.
(COLOMBO, May 31 2016)

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