Ensco selling three rigs to Indian drillers

Vol 13, PW 18 (25 Feb 10) Exploration & Production

Rumours are rife that US driller Ensco has sold three jack-ups to two Indian drillers: Delhi-based Jagson Drilling and Mumbai-based Great Offshore.

“We’ve heard Jagson has decided to buy Ensco 51 and Ensco 57,â€‌ says a drilling contractor. Jagson bid Ensco 51 and Ensco 57 in an ONGC tender (see below) to replace seven jack-ups for three years in the western offshore; Great Offshore also bid Ensco 50 in the same tender.

Nothing extraordinary there, as Indian drillers routinely offer rigs owned by other companies for local contracts. But Ensco’s participation in an ONGC tender is unusual - explaining rumours that Jagson and Great Offshore have each paid something in advance to purchase the rigs at an estimated price of $40m to $50m each.

At any other time this would be an attractive price for the 30-year old refurbished rigs, but one source believes it is too much given current market conditions. Jack-up day rates are around $70,000, he explains, and for the ongoing tender ONGC wants new equipment loaded which could cost an additional $7m-$8m.

When contacted, Jagson refused to confirm the rumours, citing confidentiality. “We would not like to comment till this ONGC tender is over,â€‌ says Jagson owner Pradeep Gupta.

Great Offshore was similarly reticent. “Ensco has allowed us to nominate Ensco 50 in the ONGC tender,â€‌ confirms Great Offshore.

“We have nothing more to say and won’t respond to speculation.â€‌Ensco 50 is a Friede and Goldman L-780 Mod II-C rig, which can drill in 300-feet water depths and is currently offshore UAE.

Ensco 51 is a similar model and is offshore Indonesia. Ensco 57 is a Marathon LeTourneau 84-CE rig, which can drill in 400-feet water depths and is offshore Malaysia.

Great Offshore owns jack-ups Kedarnath and Badrinath with a third under construction. Jagson’s website says it owns three jack-ups.