BP hires Shiv Vani rig for Egypt drilling campaign

Vol 15, PW 20 (19 Apr 12) Exploration & Production
     

Even Shiv Vani’s harshest critics admit the decision by BP to award it a contract is an admirable feat for a newcomer to the offshore drilling business.

Last month (March), the Delhi-headquartered company, better known as an onland driller, bought jack-up Ocean Heritage from Houston-based Diamond Offshore for approximately $60m. Ocean Heritage, ready-stacked in Red Sea ‘shelter waters’ (calm waters) since September, is an independent leg type cantilever jack-up that can drill in water depths of 300-feet (91 metres) to depths of 20,000-feet (6096 metres).

“Shiv Vani paid 25% of the total $60m amount owed to Diamond late last month,” we learn. “It will finance the remaining 75% payment through bank loans.

” Shiv Vani has secured a firm three-year contract for Ocean Heritage at an Effective Day Rate of approximately $88,000 from the Gulf of Suez Petroleum Company (GUPCO), a BP-led 50:50 joint venture with Egyptian General Petroleum Corporation. GUPCO wants the rig mobilised in Egyptian waters by end-May.

Most of the 92 crew onboard will be Indian but Shiv Vani must hire some Egyptians under local law. “It’s a big achievement,” adds a rival driller.

“Winning a BP contract is not easy. BP is one of the toughest customers worldwide because of its stringent HSE (Health, Safety and Environment) policies.

” Shiv Vani, he adds, can begin recovering its costs for Ocean Heritage immediately thanks to the “good rate.” Yet detractors advise caution.

“Operating offshore rigs is different from land rigs,” he says. “It’s more demanding; more money is at stake.

Success or failure in this contract will make or break Shiv Vani. The (promoter) Singhee brothers know this only too well.