Seven lucky offers in Oil India's 7-rig tender
Seven is a lucky number for some people.
Whether that's the case for Oil India remains to be seen. But by the May 16 (2024) deadline, Oil India was fortunate enough to have received precisely that number of offers in a tender for seven 2000-hp rigs.
Gurgaon-based Quippo, Ahmedabad-based John Energy, Surat-based Seros Energy and Singapore-registered Foresight all bid. Quippo offered four rigs, while the others offered one rig each on four-year contracts.
"Oil India will have to either qualify all the seven rigs to meet its needs," says a bidder. "Or make do with fewer rigs."
Oil India has opened technical bids and plans to open price bids soon. Ideally, Oil India would have received more offers to give it a choice of rigs and contractors.
However, a general lack of rigs in the onland drilling market means it is lucky to have received seven offers at all. Some fear that Oil India might be forced to compromise on quality.
"Some vendors have been offering poor quality, repaired rigs," we hear. "Oil India is unable to demand the expected quality."
Another reason why only a few vendors participated is that the bid bond rates have shot up. "The bid bond is Rs4cr ($480,415) per rig, effectively keeping out all small-timers," says one source.
"Unfortunately, or fortunately, Oil India can do little about it as this increase in bid bond size is in line with a (2023) government order." On February 22 (2024), Oil India initially invited offers for up to five rigs but later increased this to seven 2000-hp rigs.
Oil India needs the rigs as it races to meet its Mission-4+ target to produce more than 4m t/y by March 31 (2025). "We immediately need five more rigs, including 3000-hp, 2000-hp and 1000-hp rigs," says a source.
"We need a 1000-hp rig to drill DSF wells from June 2024 and two 2000-hp rigs from August 2024."