Global Santa Fe drops ONGC for Saudi Aramco

Vol 10, PW 4 (15 Jun 06) News in Brief

Driller Global Santa Fe has dropped ONGC and instead chosen to hire two of its jack-up rigs to Saudi Aramco.

Globals decision was driven by ONGCs unwillingness to pay $25m mobilisation fees per rig, including $10m in dry tow charges and moving day rates. ONGC would pay only $5m per rig, in line with the tender terms, and wanted them in the Mumbai Offshore from September 2006 on three-year contracts.

Global wanted $25m per rig mobilisation fee as the opportunity cost, we hear. Saudi Aramco showed no hesitation in paying Globals mobilisation fees for Freddy Goldman rigs GSF Main Pass-1 and 4, which are both working in the Gulf of Mexico.

In mid-May, on the day ONGC was to open Globals price bids, Saudi Aramco issued a Letter of Intent to Global for both rigs on four-year contracts at a day rate of between $160,000 and $165,000.