ONGC wants extensions for Belford and Discoverer

Vol 9, PW 9 (11 Aug 05) Exploration & Production
     

ONGC is in talks to extend the contracts of deepwater drillships Belford Dolphin and Discoverer Seven Seas.

Belford, owned by Dolphin Drilling, and Discoverer, owned by Transocean, are on three-year contracts carrying out ONGCs 37-well deepwater drilling programme, which so far, has resulted in more dry holes than discoveries. Says an industry source: ONGC has sent letters to Dolphin and Transocean asking for quotes for further long-term contracts.

Confirms ONGC: Negotiations have begun, but they are still at an early stage. Dolphin and Transocean have given their quotes but theyve not yet been opened.

ONGC wants both ships for a minimum two years more. Belford finishes her contract with ONGC in December 2006 while Discoverer Seven Seas finishes her contract in February 2007.

We would like each ship for another three years, adds a source. We have firm jobs for them.

ONGC has identified drilling locations in the offshore Andaman Islands, Mahanadi, Krishna Godavari and Cauvery basins. Belford and Discoverer have integrated contracts with ONGC where the drilling contractors provide the services also.

We would like this system to continue, reveals ONGC. We see the new contracts as extensions of the existing contracts.

Together, both contracts are worth about $750,000 per day inclusive of rig and services rates. ONGC is aware of current high rig rates.

We know rates will be high but they have to be affordable. Industry sources draw attention to the rig hire rate paid by Reliance for Transocean rig Deepwater Frontier: $330,000 per day for a two-year contract from May 2006.

ONGC will be shocked when they see our rig hire rates, says a source. Add to that the rates for services and ONGC should brace itself for a bigger shock.

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