Essar confounds rivals with knock-out rig bid

Vol 19, PW 9 (14 Jan 16) Exploration & Production

Ruia-controlled Essar Oilfield Services has surprised industry watchers by bidding lowest in ONGC's tender to hire a semisubmersible that can drill in water depths of 1000-feet for three years.

PETROWATCH learns that on December 29, 2015 ONGC opened price bids submitted on August 12, 2015 by four drillers: Dynamic Drilling, Essar Oilfield Services, Jet Drilling and Saipem. Essar quoted an ODR of $104,350 and a NODR (Non Operating Day Rate) of $99,120.

Jet ranked second quoting $129,000 for Energy Searcher and a NODR of $122,550. Dynamic Drilling ranked third offering Noble Duchess at $144,920 and a NODR of $137,665.

Saipem came fourth quoting $264,000 and a NODR of $250,800 for Scarabeo-6. All rates exclude ST and mobilisation/demobilisation fees.

Essar confirms to this report that Essar Wildcat is 'warm stacked' or ready to be mobilised at the Sembawang Yard in Singapore. "I've also heard we are L1," he says.

"It's good news!" Essar expects ONGC to issue a LoA in one month. Jealous rivals claim Essar bid so low because it is desperate for work in today's climate of low oil prices, mass lay-offs and stagnant E&P activity.

"I didn't expect Essar to bid so low," admits a driller. "Their bid was expected to be around $120,000/day." Essar Wildcat's last contract with Star Energy in Indonesia ended in March 2015 forcing the company to lay off around 50% of the 100-strong rig crew.