Hercules favourite in shallow water ONGC tender

Vol 14, PW 22 (05 May 11) Exploration & Production

Controversial US driller Hercules Offshore seems destined to win an ONGC tender to hire an ‘ultra shallow water’ rig for a drilling programme off India’s west coast.

PETROWATCH learns Hercules and Transocean are the only two big names likely to bid by the May 16 deadline. “Hercules has two ‘ultra shallow water’ rigs in South East Asia and wants to increase its presence in India,” we hear.

“Transocean hasn’t bid aggressively in recent ONGC rig tenders and may not bid aggressively in this one either.” In February, Hercules acquired fellow US-based contractor Seahawk Drilling and its fleet of shallow water rigs, giving it an edge in this tender.

ONGC wants to drill one well at location C-1-D in the North Tapti field and one at location B-1 in the Gulf of Cambay, both in shallow water depths of up to five metres. Each well could take about four months.

“Rates in this tender are likely to be higher than normal,” we hear. “Only a few ‘ultra shallow water’ rigs are available.

ONGC also wants the driller to provide marine support vessels with the rig, adding to the day rate.” ONGC can expect quotes from $90,000 to $100,000/day, much higher than the $69,000/day offered by Aban Offshore in a three-year jack-up tender last month.

ONGC has asked for two marine support vessels with the rig. But Hercules representatives told a mid-March pre-bid in Mumbai that ONGC should hire three, not two.

ONGC later clarified, “it is up to the contractor to decide whether two or three support vessels” are needed. Transocean and Deepwater Drilling representatives also attended the pre-bid.

In December 2007, ONGC invited criticism after awarding three-year contracts to ‘ultra shallow water’ rigs Hercules 258 and Hercules 260 in a tender widely condemned by rival drillers as biased towards Hercules Offshore.