Still no clarity on Saipem 10000 for Andamans

Vol 13, PW 24 (20 May 10) Exploration & Production

Disagreement persists between Italian oil major Eni and partners GAIL and ONGC over whether deepwater drillship Saipem 10000 can be hired for a drilling campaign at their 13,110-sq km deepwater block AN-DWN-2003/2 near the Andaman Islands.

PETROWATCH learns GAIL and ONGC are still upset with Eni for keeping them in the dark about its plans for Saipem 10000, while Eni subsidiary Saipem, which owns the rig, now claims the fault lies firmly with GAIL and ONGC. “In October last year, Saipem sent a letter to ONGC and GAIL informing them of plans to bring Saipem 10000 to India for the Andaman drilling programme,” asserts a source.

“They have not responded. How can Eni bring a drillship to India without the formal consent of consortium partners” Saipem 10000 is scheduled to undergo re-certification after she completes her present assignment drilling offshore Indonesia - but industry sources believe if this dispute continues much longer Eni could choose not to bring her to India at all.

This could cost the consortium considerably, as Eni has Saipem 10000 under contract to work at $360,000/day, much lower than the prevailing deepwater drillship rates of $500,000/day or more. “Eni never tells us what is going on,” maintains an ONGC source.

“ONGC doesn’t know when the rig will come or which rig will come.” Sources at GAIL remain equally agitated.

“The block’s Operating Committee last had a meeting two or three months back,” says a GAIL source. He adds the OC agreed to hire Saipem 10000 to drill one firm well and two optional wells at AN-DWN-2003/2.

“GAIL has received no communication from Eni since then,” he claims. Unofficially, it’s believed ONGC and GAIL are deliberately holding up a decision on Saipem 10000 because they want to hire another rig from the market.