Hercules wins three-well GSPC rig tender

Vol 14, PW 12 (02 Dec 10) Exploration & Production

Hercules Offshore has emerged surprise winner in a GSPC tender to hire a jack-up for a drilling campaign in the Mumbai Offshore, beating the favourite Aban Offshore.

PETROWATCH learns GSPC issued a Letter of Intent to US-based Hercules sometime last week for Hercules 170 for a firm three-well commitment at the 1520-sq km shallow water NELP-VI block MB-OSN-2004/1, where it partners IndianOil, GAIL, Hindustan Petroleum and Petrogas, with each holding 20%. Hercules confirms to this report that Hercules 170, currently stacked in a Middle East yard, will mobilise to location this month (December) to begin the drilling campaign.

No official announcement has been made of how much will be paid to Hercules, but at least two industry sources tell this report GSPC has agreed an ODR (Operating Day Rate) of $55,000 plus a sum of $3m to cover rig mobilisation and de-mobilisation costs. GSPC’s decision to hire Hercules 170 comes amid growing concern among consortium members and within sections of GSPC that this former ONGC-held licence holds no potential.

Pessimism stems from ONGC’s earlier neglect of the area, even though it is close to the Mumbai High field and the Kutch offshore. “ONGC would surely have drilled here if it was prospective,” says a consortium source.

“Maybe there is some spill over (from Mumbai High) that will be revealed in the 3D, but on its own this block is not so good.” In September, GSPC hired Halliburton to interpret 1440-sq km 3D shot and processed by CGGVeritas boat Pacific Sword, with completed results – validated by in-house experts - expected by February or early March next year, at the latest.

Is GSPC taking a risk by drilling without full interpretation of the 3D to hand In September, the consortium met and set December 25 (Christmas Day) as the provisional spud date for the first of three wells.