Blood bath in eight-rig ONGC jack-up price bids

Vol 21, PW 2 (19 Oct 17) Exploration & Production
     

ONGC chairman Shashi Shanker can hardly contain his excitement at the low bids received in an eight jack-up rig tender concluded this month.

Less happy are drillers! ONGC opened price bids on October 9 to read never-before-seen quotes of $25,000-$30,000/day. Compare this to the average $45,000/day it pays today for a standard jack-up.

When asked about this the same day Shanker welcomed the news. "We will benefit!" he said on the sidelines of CERAWeek in Delhi, but admitted: "I haven't seen the rates yet." Most drillers are convinced these low day rates, comparable to what you'd pay for an onland rig, are suicidal.

"These rates aren't sustainable," complains an Aban Offshore source. Others stress it costs between $5000-$8000/day to stack a rig so making any money is better than nothing.

In Category-I for BMC, MLT or Livingston rigs, Greatship bid lowest for Greatdrill Chaaya at $25,830/day, followed by Dynamic Drilling with $26,920/day for Victory Driller and Valiant Driller. "ONGC will ask Dynamic to match Greatship," we hear.

Also likely to match the rate is Jindal Drilling quoting $30,506/day for Jindal Pioneer, a new-build but idle for close to three years. Shelf came fourth offering both Trident XII and Ron Tappmeyer at $32,500/day and Compact Driller for $31,550/day.

Selective Marine came fifth with $35,999/day for Noah's Ark. Aban Offshore offered five rigs at $36,377/day: Aban-VIII, DD2, DD8, DD3 and DD6.