A dynamic positioning system is computer controlled system which maintains the positioning and heading of ship by means of active thrust. A DP system consist of sensors, observer, controller and thrust allocation algorithm. The purpose of this paper is to investigate the performance of proportional derivative type fuzzy controller with Mamdani interface scheme for dynamic positioning of an oceanographic research vessel (ORV) by numerical simulation. Nonlinear passive observer is used to filter the noise from the position and orientation. A nonlinear mathematical model of the ORV is subjected to the wave disturbance ranging from calm to phenomenal sea. Robustness and efficiency of the fuzzy logic controller is analysed in comparison with the multivariable proportional integral derivative (PID) and the linear quadratic regulator (LQR) controller. A simplified constrained linear quadratic algorithm is used for thrust allocation. The frequency response of the closed loop system with different controllers is analysed using the bode plot. The stability of controller is established using the Lyapunov criteria.