Cairn finds someone to drill a single Ravva well

Vol 17, PW 2 (22 Aug 13) Exploration & Production

Lady luck has smiled on Cairn India's fourth attempt to hire a jack-up to drill the Late Oligocence-110 (LO-110) prospect at Ravva.

Aptly, the rig Cairn will hire is called Discovery Triumph. Hercules Offshore was the only qualified bidder after Cairn completed evaluation on July 9.

When Cairn opened the price bid three days later Hercules offered Triumph at an Operating Day Rate (ODR) of $254,000 plus $12m mobilisation fees and a $1.18m demobilisation fee. Hiring Triumph at such an expensive rate will push Cairn's estimated $83m exploration well cost up by 18%.

Cairn earlier estimated a rig rate of $160,000/day for a 106-day one-well campaign. “But no driller wanted to mobilise in the period Cairn wanted,” says a source.

Cairn needs a rig with a 15,000-psi Blow Out Preventer to drill one exploration well in water depths of about 20 metres to around 4000 metres TD and possibly two ‘contingent’ appraisal wells depending on the results of the exploration well. Cairn has no choice but to issue a LoI soon to Hercules so Triumph, drilling offshore Sri Lanka, can be mobilised by October 2013 to catch the eastern offshore fair weather window.

Cairn first issued this tender on April 13, 2012 to 19 drillers but received no response. Ditto for the second and third attempts on November 19 last year and February 22 this year.

This tender was published on June 11.