ONGC plays 'mind games' with drillers

Vol 18, PW 14 (12 Mar 15) News in Brief

Drillers accuse ONGC of playing 'mind games' by claiming it does not have adequate monsoon drilling locations for jack-ups coming off contract before this year’s rains begin.

Drillers feel this is just a ploy to get them to sharply reduce rates. Usually ONGC extends contracts for the duration of the monsoon season, from May till September.

When contacted, an ONGC source says it does not have monsoon locations because some of the new platforms that were expected to come up have got delayed. This is bad news for Shelf Drilling's rigs CE Thornton and FG McClintock which come off three year ONGC contracts on May 1 at an EDR of $87,147; for Shelf’s Trident-II which comes off a five-year contract on March 29 at $74,899/day; and for Aban Offshore's Aban-II which comes off a three-year contract on April 18 at $49,460/day.

Prevailing market rates are now 20% lower than these levels, and some believe ONGC's secret plan is to pave the way to hire new rigs at rock-bottom contracts.