Three-year contracts for 12 rigs sought by ONGC

Vol 6, PW 9 (03 Jul 02) Exploration & Production

DRILLING CONTRACTORS TAKE note: ONGC wants to hire 12 offshore shallow water rigs.

Barring one, all the rigs will be hired for three years to December 2005. This marks a radical shift from the earlier practice of awarding two-year contracts.

Current thinking is to move away from "repetitive tendering" to hire offshore rigs and replace it with a "composite tender" for exploratory or development drilling or workover jobs. "If we hire for three years we might get better rates than if we hire for two years." reveals a source.

"Mobilisation and demobilisation charges will also be lower as we saw in our last tender." Each ONGC regional business centre has submitted a work plan to fit the new strategy. Four of the 12 rigs are for exploration, four for development and four for workovers.

Three of the exploratory rigs (one slot type jack-up, one mat type jack-up and one floater) are for the western offshore and one slot type jack-up equipped with a 15,000 psi BOP stack is for offshore West Bengal. Only the West Bengal rig will be hired for two years from April 2003.

All four development rigs (300-feet cantilever jack-ups) are for the western offshore to replace existing hired rigs whose terms are ending. The four workover rigs (cantilever jack-ups) are also for the western offshore.

Two of them will work in a mining lease area and two in a non-mining lease area. ONGC expects to pay between $55,000 to $60,000 per day.

"Availability is limited because demand is up," adds a source. "ONGC could get rigs from the Gulf of Mexico where the market is soft but mobilisation costs will be higher."

LNG Summit