Fury as Reliance cancels Frontier contract

Vol 14, PW 15 (27 Jan 11) Exploration & Production

Angry oilfield contractors and service providers are critical of Reliance’s decision to end its contract with Transocean-owned drillship Deepwater Frontier six months ahead of time.

Frontier has just completed drilling a well for Reliance at its offshore block in Timor-Leste, near Indonesia. Shortly after completion, contractors were told their services are no longer required and were asked to demobilise rig crew.

Over two days from January 20, Frontier’s Blow out Preventer from the Timor-Leste well was unlatched. “Equipment was packed up simultaneously,” says a source.

“After that the transponders on the seabed were withdrawn.” Unclear is where Frontier will head now.

“She may go to Singapore for maintenance,” guesses a source. Reliance hired Frontier on a three-year contract from August 2008 at $477,000/day and the rig was drilling offshore India till November 2010.

She reached Timor-Leste in the first week of December and drilled a dry well in water depths of 1200 metres. Reliance originally wanted to retain the rig in Timor-Leste until July, before bringing her back to India to drill maybe one well and then releasing her from the contract.

But a month ago, hints surfaced that the rig might be released much earlier than expected when Reliance surprisingly began to make up excuses about bad performance. “Transocean put up a robust defence of the rig,” we hear.

“Rightly so, as there were no complaints from Reliance during drilling in Timor-Leste. Reliance must have already made up its mind to release Frontier to save on transport costs to India.

” With Frontier gone, Reliance will now have just two rigs left in Indian waters: Dhirubhai Deepwater KG2 (DD-KG2) and Discoverer India, each hired for five years from Transocean. But Discoverer India is rumoured to have been sub-contracted to Chevron in the Gulf of Mexico, and will set sail in June.

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