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Indian brokers give solid offshore outlook

Indian brokers give solid offshore outlook

Mumbai: Mumbai-based Emkay Share & Stock Brokers is confident that the offshore oil and service sector will demonstrate robust growth over the next few years and believes that Indian offshore companies such as Great Offshore, Aban Offshore and Garware Offshore are well-placed as a result. Describing their fundamentals as "extremely strong" in a recent client report, the firm said high oil prices, itself a catalyst for more exploration and production activity, a worldwide shortage of rigs, significant supply constraints and robust demand provide a sound backdrop for one of the offshore market's strongest phases for a decade.   
Certainly, Asian repair yards are so far the main beneficiaries of frenetic activity in the deepwater offshore sector as oil explorers broaden their quest for new crude sources and upgrade their drilling rigs accordingly. With most offshore construction yards booked solid for years to come, the race is on to procure drilling rigs capable of exploring miles below the seabed in ultra-deep water and often hostile conditions. Day rates for latest generation deepwater rigs are now so high, say analysts, that it is well worth re-building existing units built 20-30 years ago, in preparation for more exploration in previously inaccessible areas. Emkay notes that demand for offshore rigs and support vessels is rising almost everywhere and that day rates have moved above the "replacement threshold", spurring a new construction boom.  [13/06/07]

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