Aban offers Aban-III and Aban-IV for re-hire

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

Only three companies are likely to bid in an ONGC tender to hire two jack-ups for three years.

Most interest, we hear, will be from Transocean and, of course, Aban Offshore, which operates the two rigs that ONGC wants to re-hire or replace in the Mumbai Offshore. Seventeen companies bought tender documents in November last year for the tender to re-hire or replace Aban-III and Aban-IV, whose contracts are coming to an end.

The Aban-IV contract ends in February; while Aban-III ends in April. Unsurprisingly, parent company Aban is offering both rigs to ONGC again.

One of them, Aban-IV, is sitting idle in a Mumbai dock after ONGC invoked the early contract termination clause. Transocean jack-up Randolph Yost is likewise sitting idle off Mumbai since last September.

“Transocean will bid aggressively against Aban to get at least one of these contracts,” says an industry source. “Randolph Yost is a very old rig and unlikely to get a contract anywhere else.

” Four Rowan Drilling rigs are also likely to be offered by British American Offshore, we hear. “But Rowan is not a serious bidder,” says a driller.

“Rowan won’t bid as aggressively as Transocean or Aban and is likely to bid prevailing market rates.” Concern that Delhi-based Jagson Drilling might bid and crash rates as it did last April to outrage from rivals in an unrelated ONGC rig tender appears unfounded.

“Jagson doesn’t have money to hire or buy more rigs!” says a relieved rival. “Only three serious bidders are likely in this tender,” he says.

“ONGC will pay no more than $5m for mobilisation charges. It makes no sense to bring a rig from the Gulf of Mexico because mobilising a rig to India from the Gulf of Mexico will cost around $10m.