Eni abandons rig-share option for Andaman campaign

Vol 12, PW 1 (29 May 08) Exploration & Production

Eni has given up any hope of sharing a rig with Indian operators ONGC or Reliance for its ultra deepwater three-well exploration commitment at NELP-V block AN-DWN-2003/2 off the Andaman Islands in the Bay of Bengal.

“The concept of rig sharing is very new in India,â€‌ says an industry source. “It has yet to catch on.

â€‌ Eni is a pioneer of rig sharing and as far back as 2000 shared a deepwater rig with Statoil, which eventually went on to discover the Goliat field in the Baring Sea. But Eni’s relatively small commitment of three offshore wells in India makes a rig-share deal with either Reliance or ONGC difficult because both Indian operators have large well commitments in comparison.

So instead of waiting around, the Italian major has decided to go it alone and sign a â€کcorporate contract’ for an ultra deepwater rig for its drilling commitment in India and at Eni-operated blocks in Australia and Indonesia. “A â€کcorporate contract’ is the only solution,â€‌ adds a source.

“It is essential to build up a critical mass of multinational (drilling) activity rather than pay the ridiculously high rates for deepwater rigs now.â€‌ Eni is confident it can secure a deepwater rig by September 2009, when the four-year Phase-I ends and has begun gearing up to drill its three committed Andaman wells.

Fifty ocean bed samples have been collected for a geochemical analysis of the drilling locations, even though this is not part of the committed work programme. Data on ocean currents and wind speeds are also being collected.

All these, plus data from the 2D and 3D surveys shot last year and early this year, will be integrated in the coming months before drilling begins. “You must remember that the Andaman Islands are 1500-km away from the Indian mainland,â€‌ we are told.

“You have to plan for every likely eventuality. With rig rates so high you cannot afford any surprises that will suspend drilling.

â€‌ Another source adds: “This is where the global experience of large companies comes in useful to prepare for drilling campaigns in this kind of frontier territory.â€‌

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