Deepwater rig tender delay

Vol 26, PW 15 (13 Jul 23) News in Brief

Time is running out, yet uncertainty continues about whether ONGC will open price bids in its tender to hire two deepwater rigs.

ONGC is showing no sign of opening price bids yet, even though their validity runs out on July 28 (2023). Transocean and Vantage Energy bid four months ago on March 29 (2023) for the 21-month contract to drill 12 exploration wells in the Andaman Islands and the Cauvery basin in eastern offshore deep waters.

Transocean offered two rigs: DD-KG1, drilling for Reliance and BP at at KG-DWN-98/3 on $169,500/day, rising to $330,000/day when the contract extension from September to November 2023 kicks in; and Discoverer Inspiration, now in the US Gulf of Mexico. Vantage also bid two rigs: Platinum Explorer, drilling for ONGC at KG-DWN-98/2 at $149,300/day but expected to come off contract in December 2023, and West Polaris, managed by Vantage on behalf of UK-based Aquadrill and drilling for ONGC at KG-DWN-98/2 on a nine-month contract ending in August (2023) at $225,000/day plus GST.

A senior ONGC source helplessly tells us he does not know when the company will open price bids and adds that it is wondering whether to hire two or just one rig. Some attribute the delay in opening price bids to Aquadrill not submitting a clear commitment letter regarding West Polaris to Vantage in the format ONGC wants.

"Given high global day rates for deepwater rigs, Aquadrill might want to keep its options open," we hear. Still, that doesn't explain why ONGC isn't opening the other price bids.

Some claim ONGC does not have precise drilling locations and is delaying opening price bids until they're finalised. "This is untrue," a company source hits back.

"ONGC's exploration division has no objection to opening the price bids."