Jindal wins ONGC rig tender with rock-bottom bid
Jindal Drilling has quoted a rock-bottom rate to win ONGC’s tender to rehire three jack-ups for five years.
This tender was issued to replace or re-hire Jindal-managed Noble Ed Holt, Great Offshore-owned Kedarnath, and Pride International-owned Pride Pennsylvania, all of whose three-year contracts are ending. Jindal offered Noble Ed Holt, a cantilever type jack-up that can drill in 300-feet water depths, for an effective day rate of $74,900, net of service tax – drastically lower than the $99,000/day at which it was previously working for ONGC.
Jindal’s competitors, we hear, were shocked when price bids were opened late October. “Jindal’s rate is suicidal,†says a drilling contractor.
“It has tied up its rig for five years. None of the other bidders were even willing to commit their rigs for more than two years.
†ONGC’s Executive Purchase Committee met on November 5 to review the bids and issued a Letter of Intent (LoI) to Jindal for Noble Ed Holt on November 12. “ONGC was offering a five year contract,†a Jindal source explains, “so we bid accordingly.
†ONGC needs two cantilever jack-ups and one slot or cantilever jack-up in this tender, that could in 300-feet water depths. Transocean offered Trident II for $85,862/day, net of service tax but then brought down its rate to match Noble Ed Holt during negotiations initiated by ONGC.
Transocean has also received a LoI, we hear. Other bidders for the cantilever contracts were Transocean-owned JT Angel ($90,215/day), Transocean-owned Adriatic-XI ($105,000/day) and Jindal-owned Noble Charlie Yester ($109,262/day).
Great Offshore-owned Kedarnath was the only rig offered for the slot contract. But we hear ONGC is still in negotiations with Great Offshore to reduce the $87,070 day rate quoted for Kedarnath.
This is 97.9% higher than the $44,000/day rate at which Kedarnath was previously working for ONGC! Separately, Pride International-owned Pride Pennsylvania was technically disqualified from bidding because ONGC wanted the rig mobilised pre-monsoon 2010 but it was available only post-monsoon.