Reliance $564,603/day Transocean rig offer to ONGC
Losing opportunities has become an ONGC hallmark, especially in hiring deepwater drilling rigs! Sadly, this reputation is unlikely to change with news that ONGC directors on April 2 â€کdeferred’ a decision to issue Reliance with a Letter of Intent to hire Transocean â€کnew build’ Dhirubhai Deepwater KG1 - contracted for a â€کfirm’ five years, but which Reliance no longer needs right away when the rig will be ready in July.
Had ONGC gone ahead, it would have signed a tripartite deal with Transocean and Reliance to hire the rig for an initial period of 18 months, followed by a six-month extension. PETROWATCH learns Reliance offered Dhirubhai Deepwater KG1 to ONGC at an Operating Day Rate (ODR) of $495,000 for the first six months and $510,000/day for the remaining period of the contract.
In addition, Reliance asked for â€کhandling’ charges of $12,000/day and another $50,000/day extra as hiring charges for tools and equipment. ONGC negotiators, we learn, protested at the â€کhigh’ handling charges of $12,000/day but Reliance refused to budge, leaving ONGC no choice but to accept.
Added up, these work out to an average ODR of $564,603/day. An industry source tells us that at this rate, Dhirubhai Deepwater KG1 would have been a “good deal†as it compares well with two other rigs hired by ONGC to drill in 10,000 and 7500-ft water depths: Sevan Driller-II and Platinum Explorer.
Sevan Driller-II was hired in June 2008 for three years at an ODR of $524,900, while Platinum Explorer was hired in December 2008 for five years at an ODR of $585,000. On the face of it, Dhirubhai Deepwater KG1’s rate is 7.55% higher than Sevan Driller-II but cheaper by 3.5% to Platinum Explorer.
But it’s not clear if Sevan Driller-II can mobilise by December 2010, as ONGC wants.