Essar cuts rig crews but denies salary delays

Vol 18, PW 23 (16 Jul 15) People & Policy

Essar Oilfield Services admits it has been forced to "cut some flab" by laying off rig crew due to a lack of business but denies rumours that it is delaying employee salaries.

A fully-owned subsidiary of Ruia-controlled Essar Shipping, Essar Oilfield owns 15 land rigs with 1000-2000-hp capacities, three CBM drilling rigs and one semi-submersible. A senior Essar source tells PETROWATCH only three of its land rigs are under contract.

Essar Oilfield has one 2000-hp rig working for Oil India in Assam, one 1500-hp rig working for BG Shirke in Andhra Pradesh and one 1000-hp rig working for IndianOil at its CB-ONN-2005/7 Cambay block in Gujarat. "Drilling is a cyclical business," he says.

"We hire staff when we have business and we have to let people go when business is down. That's not unusual." Take the example of semisubmersible Essar Wildcat.

Essar had to lay off 50-55 people of the more than 100-strong rig crew when Wildcat's last contract for Star Energy in Indonesia ended in March 2015. "We'll hire people back when we get a contract," he adds.

Essar says it is marketing Wildcat, presently undergoing maintenance in Singapore, to potential clients in India and overseas. But industry critics point out that, considering the company has such a large fleet, it has been very unsuccessful at winning contracts in India.