ONGC scraps tender to hire 10,000-ft deepwater rig

Vol 13, PW 5 (13 Aug 09) Exploration & Production

After eight months of work, ONGC has scrapped plans to hire a rig for three years that can drill in 10,000-ft water depths, realising it doesn’t need one for that long.

On August 7, learns PETROWATCH, the powerful Executive Purchase Committee (EPC) at ONGC decided that a tender issued in March following EoIs invited last December, should be cancelled as there is not enough work to justify hiring a rig for the full three-year period. Instead it will try to subcontract Deepwater Frontier, a Transocean rig, for just one year from Reliance, as soon as possible.

So why issue the three-year tender in the first place “When we issued this tender and invited EoIs,â€‌ says an ONGC source, “we were not certain we would get Dhirubhai Deepwater KG1.â€‌ ONGC hired Dhirubhai Deepwater KG1 from Reliance in May and mobilised it on July 10.

ONGC believes the rig can handle 20 of the 50 deepwater locations that remain to be drilled. Another 25 locations can be managed by Vantage Energy’s â€کnew-build’ Platinum Explorer, contracted last November for five years and due to be mobilised by December 2010.

“Once both rigs are here,â€‌ we are told, “we will need just one more rig, and that too for only a year.â€‌ The whole story began on December 12 last year when ONGC decided to invite EoIs for three rigs: one to drill in 7500-ft water depths, one in 10,000-ft water depths and a third in 12,000-ft water depths.

Based on offers received, ONGC issued a limited tender in March for the 10,000-ft water depth rig to Maersk, Odfjell Drilling, Mercator Oil and Gas, Great Offshore and Transocean for mobilisation by December 31, 2010. Just two bids were received: under-construction Pacific Bora from Great Offshore and Deepwater Frontier from Transocean.

Price bids were opened on May 4, and Deepwater Frontier (drilling for Reliance in the eastern offshore) emerged winner with an Effective Day Rate (EDR) of $552,364. Pacific Bora was offered at $634,725.