Expect rock-bottom rates in ONGC rigs re-hire

Vol 19, PW 14 (24 Mar 16) Exploration & Production

ONGC can expect jack-up rates below $50,000/day when it issues an eagerly awaited tender to replace or rehire seven jack-ups and one floater.

These rigs come off their ONGC contracts between November 2016 and May 2017. In addition ONGC might also tender for one or two more 350-feet jack-ups.

Most expect ONGC to issue the tender by early April to give it enough time before the rigs start coming off contract - ONGC rig tenders typically take eight or nine months to conclude. Drillers contacted by this report believe in today's depressed conditions rates will be low for both old and new generation rigs.

"Last year new generation rigs fetched a higher rate," we hear. "That premium has gone." Instead the benchmark today is $48,292.33 plus service tax - the rate Shelf jack-up Parameswara began her three-year contract with ONGC on February 22.

Aban Offshore floater Aban Ice is the first to come off contract on November 22, 2016. Her present three-year contract is at an ODR of $169,000 plus service tax but thanks to the prevailing climate this rig category is now available for less than $100,000/day.

In January 2017 four jack-ups come off their three-year contracts: Shelf Drilling's Trident XII, Greatship's new generation rig Greatdrill Chetna, Dynasty Oil & Gas rig Victory Driller and Jindal Drilling rig Discovery 1.

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