ONGC sees lower jack-up rates

Vol 12, PW 17 (29 Jan 09) News in Brief

ONGC expects to save money in a forthcoming tender to rehire three jack-ups already at work in the western offshore.

Noble Ed Holt, Pride Pennsylvania and Kedarnath will finish three-year contracts this year and ONGC’s drilling services division already has management approval for a new tender. “Rates for this tender should be lower than what we got last year,â€‌ ONGC tells PETROWATCH.

ONGC hired other jack-ups last year at between $140,000 and $150,000 a day and is clear that this tender will be open to other drillers also. “Whoever offers competitive terms will get the contract.

â€‌ While it wants lower rig rates, ONGC is also holding out the carrot of five-year contracts for winning bidders. “For jack-ups we’ve decided that new contracts will be for five years,â€‌ says ONGC.

But several bidders say they are not ready to bite the carrot! “Five year contracts are good but with jack up rates now between $100,000 and $130,000, why should we lock-in for such a long termâ€‌

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