Geopolitics To Oil Logistics: Mazagon Dock Flags Heavy-Crude Tanker Opportunity After US-Venezuela Attack
Mazagon Dock's Agarwal underlined that the situation will take time to stabilise, adding that given the earlier disruption in crude evacuation, it may take about a year before flows normalise.
Following the military action carried out by the US in Venezuela over the weekend, shipbuilding major Mazagon Dock Shipbuilders is assessing how shifting oil flows and security calculations could shape demand.
Ruchir Agarwal, Director of Finance at Mazagon Dock Shipbuilders, called the developments in South America “very important,” noting that the availability of Venezuelan crude — especially heavy crude — could alter tanker demand patterns. If crude evacuation resumes smoothly, he said, it could lead to greater requirement for tankers.
However, he flagged technology and logistics challenges because Venezuelan crude is heavy and will need to be diluted before shipment as it “cannot be shipped in the present infrastructure tanker.”
Agarwal underlined that the situation will take time to stabilise, adding that given the earlier disruption in crude evacuation, it may take about a year before flows normalise.
On the broader defense implications of rising geopolitical tensions, Agarwal maintained that it would be for the Indian Navy to assess strategy. Mazagon Dock, he said, is focused on building ships and submarines and would respond to any increased order flow if the Navy decides to strengthen capabilities based on global developments. He reiterated that predicting the impact of the US–Venezuela situation is “premature,” given the relative sizes and evolving nature of the conflict.
Even as the geopolitical backdrop shifts, the company is pursuing parallel strategic initiatives. Mazagon Dock is moving forward with its plans in Colombo and expects to be on the board there within the next one to one-and-a-half months, after which a joint strategic direction for shipbuilding cooperation will be explored. Concrete progress could be visible over the next five to six months.
The company is also evaluating investments of about Rs 15,000 crore to construct a new dockyard capable of building VLCC/VLGC-sized large commercial vessels, aligning with India’s aspiration to become atmanirbhar in large-vessel construction.
On the order book, he indicated that out of potential orders worth about Rs 1.5 lakh crore, one is likely to be finalised before March, with others expected next year. However, he cautioned that revenue inflows will not immediately reflect in financials because the initial phase after contract award is largely dedicated to design and planning, and booking of value of production in the next six months is unlikely.
