ONGC reverse auction rig tender

Vol 12, PW 26 (04 Jun 09) News in Brief

ONGC has issued its long-awaited tender to re-hire three jack-ups in the western offshore.

Contracts for Noble Ed Holt, Pride Pennsylvania and Kedarnath all expire before December this year. Tender documents are on sale till June 29 and bidders have until July 2 to send in queries ahead of a pre-bid on July 6.

ONGC is offering five-year contracts to replace the current three-year contracts. This time ONGC has introduced a â€کreverse’ auction where bidders can quote lower after seeing competing bids.

Ed Holt is drilling at around $100,000/day and Pride Pennsylvania at $115,000/day but new rates are likely to be below $100,000/day. Customs duty has already been paid on Ed Holt and Pride Pennsylvania making it difficult for rivals to compete.

Kedarnath is working at around $40,000/day - too low for any foreign driller to compete. She also has the advantage of being an Indian owned rig and benefits from a 10% price preference over the lowest foreign bidder.

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