High-spec jack-up rig mismanagement by ONGC

Vol 19, PW 21 (30 Jun 16) People & Policy

ONGC's plan to re-hire seven jack-ups and one floater has been thrown into disarray by an oil ministry complaint that it is inefficiently managing high spec rigs.

As we write ONGC bosses are formulating a response to an oil ministry letter received on May 11 accusing the state-owned explorer of unnecessarily hiring high spec rigs for work that can be handled by old and less expensive rigs. Until the ministry's concerns are addressed, don't expect ONGC to issue a tender to re-hire seven jack-ups and one floater, whose contracts end between November 2016 and May 2017 and for which a tender was expected in April.

ONGC has 10 high-spec rigs on hire but only one, Greatdrill Chetna hired at $119,647/day, is drilling a HP/HT well at D-33 offshore Mumbai. Most of the others are drilling conventional wells or workovers which can be done by old rigs.

As for new-builds Vivekananda-1 and Vivekananda-2, hired last month (May) each at $73,542/day, ONGC has yet to identify drilling locations or set a work programme though both rigs will mobilise by October 15. Mumbai High and Neelam-Heera asset managers have apparently told ONGC bosses they don't need new high-spec rigs.

One says ONGC used conventional jack-up Victory Driller effectively for the Halliburton and Baker Hughes underbalanced drilling pilot project at Heera, proving the benefits of such rigs over high-spec rigs.