Niko drops John Energy for ETA rig at Cauvery block

Vol 12, PW 18 (12 Feb 09) Exploration & Production

Canadian explorer Niko Resources has made a surprise change to the drilling contractor it plans to use for its exploration campaign at onshore 957-sq km Cauvery Basin NELP-V block CY-ONN-2003/1 in Tamil Nadu.

Citing â€کcommercial reasons’, PETROWATCH learns Niko will no longer use a John Energy rig as originally decided last September when the Gujarat-based driller emerged winner from 26 bidders and instead plans to use a rig from Dubai-based driller ETA. “The change happened in the first week of February,â€‌ says a source.

“Niko didn’t sign a contract with John Energy.â€‌ ETA’s rig for Niko is a 2000-hp unit currently drilling for Jubilant Energy in the Mehsana region of Gujarat.

We hear the rig has finished its assignment for Jubilant and is being prepared for the cross country move to the Cauvery Basin block in the next month and reach Niko’s location in April. Niko has hired the ETA rig for two â€کfirm’ wells and one â€کoptional’.

Each well will be â€کdirectional’ and drilled to TD of 4100 metres to reach Cretaceous plays. “As these are â€کdirectional’ wells,â€‌ notes a source, “the actual measured depth will be 4315 metres for each.

â€‌ Because the locations for both wells are in the inter-tidal zone, “Niko had no choice but to opt for â€کdirectional’ wells.â€‌ Niko is currently in Phase-I of the exploration period, which ends on July 7.

But the company will receive an automatic six-month extension to January 2010 because of ongoing drilling. Five wells are committed in Phase-I and two (Agraharam-01 and Gahpavanam-01) were drilled in 2007 as dry holes.

Despite the dry holes Niko’s confidence in this block is reflected in its decision to continue the drilling programme and double the depths of the two â€کfirm’ wells. “Niko committed to drill the first well to 1500 metres, second and third to 2000 metres each, fourth to 2500 metres and fifth to 3000 metres,â€‌ we hear.

“The depths for the third and fourth wells were increased to reach different plays than initially planned.â€‌