Jagson threat to Transocean in ONGC rig tender

Vol 15, PW 11 (01 Dec 11) Exploration & Production

Maverick Indian driller Jagson Drilling could spoil the party for Transocean in ONGC’s tender to re-hire or replace jack-ups CE Thornton and FG McClintock.

Only Jagson and Transocean submitted bids by the November 21 deadline. As expected, Transocean offered Thornton and McClintock for re-hire in addition to Randolph Yost and GSF Key Singapore as options.

Transocean was earlier expected to win easily as few companies had rigs with ONGC’s specifications and tight mobilisation schedule. But nobody counted on Jagson offering Rowan Drilling’s Rowan Paris.

Some fear Jagson might again send shockwaves through the market as it did in April 2010, when it won a three-year ONGC contract for two rigs quoting the rock-bottom rate of $64,000/day for each rig. “Transocean must have quoted around $90,000/day for each rig (in the current tender),” speculates a source.

“This is the rate it offered for McClintock and Thornton in a separate ONGC tender to hire MLT 116C rigs (where price bids were opened on October 19).” But, he adds, Jagson’s bid might be much lower, around $72,000/day.

ONGC is evaluating technical bids, we learn, but no date is yet fixed to open price bids. Jagson owner Pradeep Gupta declined to give details, when contacted.

“All I can say is we’re offering Rowan Paris,” he said. “She’s at the Lamprell yard in Sharjah completing her ABS (American Bureau of Shipping) certification.

The rig was drilling until last month.” Gupta also refused to comment on rumours that Jagson has struck a deal with Rowan to buy Rowan Paris for between $35m and $40m if it wins the ONGC contract, and that it might have to spend an equal amount to get the rig operational.

“I can’t share any more with you as I’m bound by a confidentiality agreement,” he said.