Transocean receives Jack Bates LoA from ONGC

Vol 19, PW 22 (14 Jul 16) Exploration & Production

Transocean has convinced ONGC to hire its semi-submersible Jack Bates at $127,000/day - around $22,000 more than ONGC is paying for higher capacity rig Aban Abraham.

PETROWATCH learns ONGC issued a LoA to Transocean on July 8, hiring Bates for two years to drill development wells at the Vashishta and S1 fields in the offshore KG basin. "There was a lot of uncertainty over whether ONGC would hire Bates," says an industry source.

"Nobody was sure if ONGC's EPC (Executive Purchase Committee) would pay $127,000/day for a rig which can drill only in water depths of 600 metres when it has hired Abraham which can drill in water depths of 1500 metres for $105,582/day. It was a question of justifying the award." ONGC initially wanted Transocean to match the rate quoted by Aban Offshore for Abraham.

So how did Transocean engineer the reversal? "Transocean sent its teams to meet ONGC management in Delhi many times over the last month," says a source. "It took a lot of convincing." Under the LoA terms, Transocean will get 180 days from the date of award to mobilise the rig.

Jack Bates is currently at the Keppel FELS yard in Singapore being prepared for the ONGC contract. When ONGC opened price bids on May 17, Transocean bid lowest for Bates while Dynamic Drilling ranked second quoting $156,000/day for Noble Max Smith.