Myanmar unrest does nothing to deter Essar drilling

Vol 11, PW 11 (04 Oct 07) Exploration & Production

Like the government of India and state-owned companies GAIL and ONGC Videsh, private sector Essar Oil is also blissfully unconcerned about the popular unrest in neighbouring Myanmar, where it is operator at one onland and one offshore block.

Essar Oil is busy scouting around for a rig to drill two firm wells and one optional well at onshore 9750-sq km Block L, where it is operator with 100% and in Phase-I of a three year exploration stretch that commits it to drill just one well. Essar hopes to begin drilling in December this year with each of its wells reaching up to 5000 meters.

“We are talking to a local drilling contractor to hire a brand new Chinese rig,â€‌ Essar tells this report. “We should be able to finalise the contract by this week.

â€‌ On September 24, Essar invited EoIs for one 2000-hp onland rig - that can drill up to 6000 metres - for a one-year contract in Myanmar. Industry observers were surprised that a company owning 13 onshore rigs wanted to hire a rig from outside.

“No driller in India will give a rig to Essar because they are a competitor,â€‌ says a rival contractor. “Essar is testing the market to find out the rates and costs involved in taking their own rig.

â€‌ Contacted by this report, Essar explains: “It is very expensive to take our own rig for one or two wells. We thought we would save money on â€کmob’ and â€کde-mob’ if we hired a rig from a local company.

â€‌ Essar has already bought wellheads for the Myanmar wells from an Indian supplier and will buy casings and other equipment in the next one or two weeks. All third party services such as cementing and logging have been hired from Myanmar companies.

In May this year, Essar acquired 600-sq km 3D and 400-km 2D at Block L, for which it signed a PSC with the Myanma Oil & Gas Enterprise (MOGE) on May 6, 2005.