Reliance drops Blackford and Neptune Explorer

Vol 12, PW 19 (26 Feb 09) Exploration & Production

If there was any doubt before, there shouldn’t be now: Reliance has decided (definitively!) that it no longer needs Blackford Dolphin or Neptune Explorer, two deepwater rigs for which it has signed contracts, but which are yet to reach India.

Neither rig, we learn, figures in a detailed drilling programme note prepared by Reliance last December, and seen by industry sources. What does figure very clearly are three part-Transocean-owned new-builds and the dates on which Reliance expects them to reach India: Dhirubhai Deepwater KG 1, which Reliance expects in August this year; Dhirubhai Deepwater KG 2, which Reliance expects in early 2010; and an unnamed third rig, which Reliance expects end-2010, to coincide with the departure of another Transocean rig: Deepwater Expedition, whose contract ends in October 2010.

Little is known about the eventual fate of Neptune Explorer, which languishes in a Singapore shipyard, but the omission of Blackford Dolphin from Reliance’s list doesn’t mean it won’t be coming to India – it still might, but not for Reliance. “Reliance is trying to sub-let Blackford Dolphin to ONGC,â€‌ reports a source.

“Reliance and ONGC have been talking about this for the past month. But nothing is yet firm.

â€‌ Separate meetings have also taken place between ONGC and Dolphin Drilling, the rig’s management company. “Reliance is telling Dolphin it doesn’t want Blackford Dolphin this year,â€‌ says another source.

“They are saying â€کfind another operator’ because we don’t have any drilling programme for you.â€‌ This won’t be the first time Reliance is trying to back out of its commitment to Blackford Dolphin.

Soon after it signed a three-year contract for the rig in March 2006, Reliance sub-let it to Tullow Oil, who has deployed the rig to offshore Ghana. “Dolphin won’t mind if Reliance sub-lets it again because they will get a better rate,â€‌ we hear.

“Tullow is paying $365,000/day for Blackford Dolphin; when Reliance hired the rig they got it for less than $280,000/day.â€‌