Reliance sublets DD-KG2 to Petronas off Brunei

Vol 15, PW 3 (11 Aug 11) Exploration & Production

By the end of August, Reliance will have no rigs deployed at any of its oil and gas blocks offshore India.

PETROWATCH learns Reliance has sub-let Transocean deepwater drillship Dhirubhai Deepwater KG2 (DD-KG2) to Malaysia’s Petronas Carigali Brunei. Petronas is expected to use the rig to drill two wells offshore Brunei.

“It is not clear how long this assignment will take,” reports a source. “Nor do we know when the rig will return to Indian waters.

” DD-KG2 is currently working at D6, drilling well KG-D6 A-22 in water depths of 740 metres. She reached location A-22 around July 25 and spud the well soon after.

Reliance originally planned to drill the well to 2200 metres TD by August 17 so the rig could leave for its Brunei assignment, but ‘technical problems’ at the well are delaying plans. “The drill bit reached 2000 metres around August 3 but the drilling ‘tool’ got stuck,” we are told.

“They are trying to retrieve the tool.” DD-KG2 will move out of the A-22 well location after the drilling tool is retrieved and return to her shore base at Kakinada in Andhra Pradesh.

She is then expected to move to Singapore for maintenance before leaving for the Brunei assignment. Details of the financial terms between Reliance and Petronas are not known.

But we do know Reliance hired DD-KG2 from Transocean in March 2010 for five years at $510,000/day. Contractors are dismayed that DD-KG2 is leaving Indian waters as they were banking on long-term business from Reliance.

“Many were already upset about Reliance subletting its two other rigs (Discoverer India, to Chevron; DD-KG1, to ONGC),” we are told. “Nobody expected it to also sublet its third rig.