Schlumberger wins $250m Cairn KG contract

Vol 20, PW 24 (24 Aug 17) Exploration & Production

Schlumberger has beaten Halliburton to win Cairn India's unprecedented 'end to end' services contract to explore eastern offshore shallow water block KG-OSN-2009/3.

A source with direct knowledge says price bids were opened in the first week of August and that the final contract is likely to be signed this week. Schlumberger bid lowest with an indicative price of around $250m.

Still unclear is the price quoted by Halliburton, the only other company to bid by the July 14 deadline. GE-owned Baker Hughes, Weatherford, Sapura Energy and Noble Energy stayed away despite attending the May 22 pre-bid in Delhi.

"This is a full end-to-end contract and will be a two-year exploration campaign," says our source. Cairn wants Schlumberger to drill two 'firm' exploration wells.

If successful, two more will be drilled followed by four 'optional' wells, adding up to eight in total in water depths from 30 to 200 metres. "Cairn and Schlumberger will jointly select drilling locations," we hear.

"It will be a team effort." Under the contract terms Schlumberger will hire the drilling rig, supply and support vessels, helicopters and other services. It is likely to hire a jack-up but a firm decision on what type of rig is needed will be taken only after receiving the detailed bathymetry report.

"Cairn asked bidders to quote for a floater rig in the bid," we hear.