ONGC rates driving Noble Drilling out of India

Vol 17, PW 7 (31 Oct 13) Exploration & Production

ONGC's habit of offering abysmally low day rates for offshore rigs is driving drillers to tears - and Noble Drilling out of India! US-based Noble is moving two of four rigs working for ONGC out of India when their contracts end.

A question mark hangs over the other two rigs after they come off their ONGC contracts in mid-2015. Jack-up Noble Charlie Yester, managed by Delhi-based Jindal Drilling, will move out of Indian waters after she completes her monsoon extension till October 31; Jack-up Noble Kenneth Delaney, managed by Delhi-based Deepwater Drilling, is on a 150-day idle time extension till May 2014 and will leave India after.

Noble is likely to get orders in the Middle East for both rigs. So the only Noble rigs left working with ONGC will be Noble Ed Holt, managed by Jindal on contract till February 2015, and Noble Duchess, hired to ONGC until May 2015.

In May when price bids were opened in ONGC's 10-rig tender, Noble Charlie Yester was offered at $125,000/day and Noble Kenneth Delaney at $115,000/day. ONGC wanted Jindal and Deepwater to match Delhi-based Jagson’s rate of $81,596/day but Noble declined.

“Rigs of this type get $115,000/day in the global market,” says a source. “Why should Noble reduce its rates for ONGC If the difference was $5000 or $7000/day Noble would agree but not when it is $30,000/day.