Russian victory in ONGC deepwater rig race

Vol 16, PW 16 (07 Mar 13) Exploration & Production

For the first time in at least 10 years a Russian driller is poised to win an ONGC drilling contract, beating Transocean.

Russian state-owned drilling company Open Joint Stock Company ArktikMorNefteGazRazvedka (AMNGR) was lowest bidder when ONGC opened price bids in Mumbai on February 18 in a tender to hire a deepwater rig that can drill in water depths of 1400 metres, on a two-year contract. AMNGR offered Deep Venture at an Operating Day Rate (ODR) of $448,316 including 12.36% service tax; Transocean was far behind, offering GSF Explorer at an ODR of $505,620, also including ST.

AMNGR officials reached Mumbai last week for talks with ONGC, which is expected to ask the Russian driller to reduce its rate even further. Talks concluded this week.

Still unclear is when AMNGR will get the LoI but ONGC wants the rig mobilised to India’s eastern offshore by April 30. Deep Venture’s last contract was with Vietnamese state-owned Vietsovpetro offshore Vietnam.

She is currently at the Sembawang Shipyard in Singapore undergoing her routine five-year class renewal. ONGC scrapped and re-issued an earlier incarnation of this tender when only Transocean bid, quoting an ODR of $601,000 including service tax for GSF Explorer.

Transocean clearly did not learn its lesson and in this tender also bid too high, ensuring that it did not stand a chance even though it quoted zero mobilisation charges against $6.5m quoted by AMNGR. Transocean quoted higher diesel usage too at 35-kilolitres/day compared to AMNGR's offer of 34-kilolitres/day.