Central Asian markets beckon for driller John Energy

Vol 11, PW 24 (17 Apr 08) Exploration & Production

Gujarat-based driller John Energy is preparing to get more drilling assignments in Siberia as well as in the oil and gas-rich former Soviet Central Asian republics of Kazakhstan, Turkmenistan and Azerbaijan.

“We are looking for more business in Central Asia,â€‌ Mahesh Vyas, managing director of John Energy told PETROWATCH. “American companies are not very fascinated by these markets, but we are.

We want to go where the market is and where there’s oil.â€‌ John presently has one 1000-hp rig working at Aktau in Kazakhstan for Norwegian operator Kensary - with a confirmed contract for a further year - and it has now bid two more rigs for contracts in Siberia and Kazakhstan.

“We have already been pre-qualified,â€‌ adds Vyas. “The operators are expected to visit our facilities by the end of this month.

â€‌ John faces stiff competition from established drillers like KCA Deutag and Nabors Drilling. “The issue is preparedness to work in extreme weather conditions where the temperature dips to minus 45 degrees centigrade,â€‌ explains Vyas, who adds that orders have been placed for seven new US-made rigs, expected to be in service by early 2009: four 2000-hp rigs, two of which can work in extreme cold; and three 750-hp rigs.

John is also eyeing other markets US companies might avoid, like Egypt, Libya and Sudan, and is currently awaiting a Letter of Intent (LoI) for a 2000-hp rig two-year contract in Egypt. Privately-owned John Energy has made huge strides since the 1980s, when it began with “one lathe, one grinding machine and one welding machineâ€‌, producing parts for drilling rigs in Gujarat to extract underground water.

Vyas then progressed to manufacturing these rigs, making 150 units before 1989. When he finally entered the emerging oil and gas market it was with one service rig to pull out sucker rod pumps at onland wells.

Today, John has 20 rigs, 12 of which do workovers. “We may not be the biggest (Indian) driller but we have the largest number of operating rigs,â€‌ says Vyas.