Things are starting to look up for national carrier MISC Bhd. Its wholly-owned unit, AET Tanker Holdings Sdn Bhd, registered its first vessel in India three weeks ago, the international media reported.

The Directorate General of Shipping, India’s maritime regulator, granted registration to the Eagle Meerut (formerly known as the Bunga Kekaras), a 30,000 deadweight tonne tanker.

AET became the first foreign firm to register a vessel in India with others, such as Tan Sri Frank Tsao Wen King’s International Maritime Carriers Ltd and its unit, Aurora Tankers Sdn Bhd, also looking to make an entry into the country.

This is a coup for AET, considering the strong resistance put up by homegrown Indian shipping companies such as Shipping Corp of India, Mercator Lines, Great Eastern Lines and Prathiba Shipping. Led by the Indian National Shipowners’ Association, they had lobbied the government to shut the door on competition from abroad to prevent an influx of foreign ships into Indian waters.

But if AET’s plans come to fruition, an additional five ships will be flagged in India to compete with the Indian shipping lines.

In order to operate in Indian waters, the Eagle Meerut has to be registered under an Indian company and must be manned by an Indian crew, among other requirements. At present, AET has more than 700 Indian officers and crew across its fleet. The company has set up offices in Gurgaon, Mumbai and Chennai.

AET Tankers India Pvt Ltd was incorporated in 2009 and is the owner-operator of the Eagle Meerut. It has also established AET Ship Management (India) Pvt Ltd to strengthen its recruitment activities in India.

“Exploring the opportunity to flag an AET vessel in India is a logical extension to AET’s considerable investment in India,” Paul Lovell, the company’s head of corporate communications, is reported to have told the media.

According to shipping news reports, India’s coastal trade is valued at about US$225 million (about RM800 million) annually and is controlled by four local shipping companies. It is not clear how much of the trade is split between bulk carriage, tankers and other vessels and how much each of the four Indian companies makes.

However, most Indian vessels used for coastal trade are more than 20 years old, giving AET an edge. The Eagle Meerut was built in 1995, but the other vessels AET is planning to flag in India could be younger. AET’s website states that the company has about 70 vessels, 40 of which are below 10 years old.

Younger vessels are more efficient and cost less to operate, which could mean better margins for the shipping company and its parent MISC. It also works out better for the Indian charterers.

For its six months ended September 2009, MISC posted a net profit of RM315.5 million on the back of RM7.4 billion in revenue. In contrast to a year ago, net profit fell by 67% while revenue fell about 8.6%. However with the cyclical uptrend in shipping, things could pick up for MISC.

Business at shipping companies could pick up, in line with the gains on the Baltic Tanker indices. Since end-August, the Baltic Dirty Tanker, the barometer for the transport of crude oil by sea routes, has gained about 125% to above 1,100 points. Meanwhile, the Baltic Clean Tanker Index, which tracks the transport of refined petroleum products, has gained more than 100% since end-August to the 900-point level.

Much of this gain stems from demand from countries in the northern hemisphere that require fuel for heating in winter, pushing freight rates northwards.

Other than the cyclical changes to the Baltic Indices, MISC could also benefit because of the large-scale contracts in Iraq won by its parent, Petroliam Nasional Bhd (Petronas), which has a 62.4% stake in MISC.

Petronas won the rights to develop four oilfields in Iraq, including the Majnoon oilfields in southern Iraq, which could have as much as 12.6 billion barrels of oil reserves. That would make it one of the largest untapped oilfields left in the world. Petronas has 40% equity interest while Shell has a 60% stake in the JV that has the mandate to develop the oil fields.

With other partners, namely CNPC and Total, the Malaysian state-controlled oil major was also awarded a contract to develop the Halfaya oilfields, which has an estimated 4.1 billion barrels of reserve.

Two other oilfields are the Badra, which has about 190 million barrels, where Petronas is working with Russia’s Gazprom, Turkey’s TPAO and South Korea’s KoGas, and the Garraf, where Petronas is the production operator with 60%, while the junior partner is Japan Petroleum Exploration or Japex.

There could be some large-scale jobs for MISC arising from these projects as well for its wholly-owned unit Malaysia Marine and Heavy Engineering Sdn Bhd. MISC ended trading at RM8.14 last Thursday, slipping three sen.

This article appeared in Corporate page, The Edge Malaysia, Issue 791, Feb 1-7, 2010