Larsen & Toubro (L&T), India’s largest engineering and construction major, is weighing an option

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to ma-nufacture oil rigs in India, from 2012 onwards, after gaining experience in repairing and fabricating rigs at their Oman facility.

A senior L&T official told Financial Chronicle that, “Till now we were repairing and maintaining the platforms and rigs, however now that we have gained experience from repairing rigs and fabricating them at our Oman facility, we are in a better position to manufacture them ourselves.”

“We are planning to manufacture the oil rigs from our upcoming Kattupalli shipyard, since the port on the eastern coast has a deeper draft compared to the ports on the western coast. Also the Hazira shipyard is over booked with orders,” the official said

The rigs require higher and complex technological skills, which L&T has gathered over a period of time and the company is expected to go alone in manufacturing the rigs. “We have the skill required with us and would not look at any technological joint venture with any global player,” the official said.

The 1,200-acre port cum shipyard at Kattupalli in the Thiruvallur district of Tamil Nadu is a joint venture between Tamil Nadu Industrial Development Corporation (TIDCO) and L&T and is expected to be complete by 2011-end.

The company initially planned to manufacture at least 29 ships including large crude carriers, large bulk carriers and container ships with an annual steel processing capacity of around 450,000 tonne. It also hoped to repair around 60 ships annually.

“Now, the list would also include the manufacturing of the oil rigs from the new facility. However, the production would depend on the global economic situation. We will have to see how the situation progresses,” the official said.

The clients could be all the companies who own rigs for global chartering as well as oil and gas explorers who need rigs for exploration purposes. Besides, L&T’s Oman and Kattupalli shipyards can even share the work given the clients requirement and logistics costs, the official said.

The total project cost is put at Rs 3,500 crore and financial closure has been achieved. “We have already tied up funds for the project and have spent around 40 per cent of the estimated cost till now,” the official said.

L&T also has a modular fabrication facility at Hazira, which is one of the largest of its kind in South Asia and is capable of manufacturing several large modules simultaneously.