Essar spends $14.5m to buy Seahawk 2505

Vol 14, PW 9 (21 Oct 10) Exploration & Production

Essar Oilfield Services is to become a jack-up contractor for the first time.

PETROWATCH learns Essar signed a $14.55m ‘purchase’ agreement on September 29 with Houston-based Seahawk Drilling for 150-ft jack-up Seahawk 2505. Essar already owns semi-submersible Essar Wildcat and 12 onland rigs.

“But we didn’t have a presence in the jack-up ‘segment’,” confirms an Essar source. “We began looking this March and evaluated a dozen jack-ups before choosing this one,” confirms Essar.

Under the purchase agreement, Essar will buy ‘mat-supported’ ‘slot-type’ rig Seahawk if she can win a contract by February 8, 2011. Essar’s hopes for Seahawk are riding on an ONGC tender to replace or rehire Jagson International-owned Deepsea Matdrill for three years.

Seahawk, offered to ONGC on October 11 faces stiff competition from Hercules Offshore’s Hercules 205 and Aban Offshore’s Aban-II. But Essar must also bid aggressively to compete with Jagson’s Matdrill, working for ONGC at just $41,040/day.

“Jagson has long recovered its investment on Matdrill,” says an industry source. “It will do anything to keep the contract.

” Then again, he adds, ONGC isn’t particularly keen on rehiring Matdrill, as the rig regularly needs repairs and maintenance, so Seahawk still has a chance. ONGC could take 45 days to evaluate all the bids submitted on October 11, we hear, awarding the contract by next January (2011) when the Matdrill contract ends.

Essar is confident Seahawk, which is ‘warm stacked’ in the Gulf of Mexico, can be mobilised for ONGC by then. Meanwhile, Essar Wildcat is preparing to drill a second well for Vietsovpetro and could remain offshore Vietnam until April next year.

One Essar onland rig is drilling India’s first shale gas exploration well for ONGC in West Bengal, while another is working for Petrobras in Brazil. Essar is also “actively” looking for contracts for five more onland rigs.

Yet another five are being refurbished, and could be “marketed” soon.

LNG Summit