Eni drillship EoI notice angers ONGC and GAIL
Italian explorer and operator Eni has angered its Andaman block partners ONGC and GAIL by approaching the market for an ultra deepwater drilling rig.
Earlier this year Eni (40%) agreed with ONGC (45%) and GAIL (15%) to hire Eni-subsidiary Saipem deepwater drillship Saipem 10000 to drill one firm and two optional wells at their 13,110 sq-km deepwater block AN-DWN-2003/2. But on December 14, Eni published a notice in The Times of India inviting EoIs from drilling contractors for a new rig to begin drilling at the NELP-V block in May 2010.
“We don't know what made Eni publish the notice,†says an irritated source. “It never consulted us about this.
†He adds it was Eni’s idea to hire Saipem 10000 over a fresh tender to save costs and that ONGC and GAIL had agreed. “We don’t know why they’re backtracking now!†we hear.
Consortium partners complain Eni sent a letter informing them of its decision on December 14 - the same date of the notice. “We are going to talk to them,†adds a source.
“The operating committee of the block has already approved the decision to hire Saipem 10000.†In 2006, Eni signed a three-year contract with subsidiary Saipem to hire Saipem 10000 for $390m or around $360,000/day.
Under the contract beginning end-2009, Eni could use Saipem 10000 to drill at any of its oil and gas blocks in the world. “That $360,000/day rate,†says an industry source, “is much cheaper than today's prevailing rates of around $500,000/day.
†In our November 5 issue, we reported that Saipem 10000 was unlikely to reach AN-DWN-2003/2 before August next year (2010). This could explain Saipem’s decision to issue a fresh rig tender, because the Phase-I exploration period expired two weeks ago on December 4 this year, forcing Eni to request the DGH for a six-month extension.
“The DGH is yet to reply,†we hear. “Even if it agrees Eni would need a further six month extension to fit with Saipem 10000’s schedule.
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