Aban deal with GSPC hostage to ONGC tender

Vol 13, PW 18 (25 Feb 10) Exploration & Production
     

Indian driller Aban Offshore should watch its back! Rival contractors are believed to be spreading rumours that GSPC would be unwise to rush ahead and award a contract for Aban-owned jack-upDeep Driller-1amid an obvious glutof rigs and downward pressure on rates as seen in ONGC's tender (see above).

Other contractors are instead clamouring for a re-tender, saying because GSPC does not need the rig till June it would get much better market rates than the $124,058/day winning quote from Aban when price bids were opened last November whenDeep Driller-1was lowest bidder. Back then GSPC wanted the rig mobilised in January or February, but now wants it in June.

“Because GSPC wanted a rig from January, those drillers who had rigs available for April, May and June did not bid,â€‌ an industry source tells us. "Some companies bid just to pacify GSPC and bid too high deliberately because they knew they couldn't provide a rig in January!â€‌ But the situation has now changed, he adds, and it makes no sense for GSPC to stick with the earlier rate, given current market conditions.

“Many more rigs will be available from June,â€‌ he adds. Industry analysts believe current rig-hire rates will be closer to the $74,900/day at which ONGC hired two jack-ups in November.

“Granted, those jack-ups have lower specifications than what GSPC wants,â€‌ we hear. “But even then the rates for June will be much lower than the prevailing rates back in November for January mobilisation!â€‌ GSPC wants a 15,000-psi BOP rig that can handle high pressure/high temperature conditions.

But even so, those specifications would cost an additional $10,000-$15,000/day only. “If GSPC invites a fresh tender for June,â€‌ says another driller, “it will get good offers from Rowan Drilling, Transocean, Ensco and Vantage Energy.

â€‌ All of them are looking for work and could quote around $90,000/day, we learn, considering 30 new jack-ups are set to enter service this year.