More long-term ONGC rig tenders soon

Vol 14, PW 16 (10 Feb 11) Exploration & Production

Drilling contractors eager for long-term work should keep a close eye on upcoming ONGC semisubmersible and jack-up tenders.

ONGC is first expected to issue a tender this month (February) to hire two semisubmersibles, each with 10,000-psi BoP stacks, on three-year contracts to drill in 1000-feet water depths. Rig specifications for this tender have been already drawn up and were approved on January 18.

“There will be good competition,” says an industry source. “You can expect 15 to 20 rigs to be offered.

” Likely bidders include Transocean, Pride International, Maersk, Songa Offshore, Stena Drilling, Jasper Offshore, Noble Drilling, Diamond Offshore, Dolphin Drilling, Saipem, Korea National Oil Company and Northern Offshore. “Many drillers have semisubmersibles ‘stacked up’ strategically,” we learn.

“They’re waiting for attractive rates.” Prevailing rates for semisubmersibles of the type ONGC wants range from $175,000/day to $200,000/day.

“Rig rates are rising 5% to 10% every month because of high global crude prices,” explains a driller. “Day rates could peak at $230,000 when this ONGC tender is out as more tenders appear in the market globally.

” Meanwhile, ONGC will soon issue a separate tender to rehire or replace for three years Northern Offshore’s semisubmersible Energy Driller whose contract ends in July. “But ONGC could keep Energy Driller till August or September if the rig is still drilling a well,” we hear.

Energy Driller was hired by ONGC in June 2008 on a three-year contract for $235,000/day and could be offered for re-hire. “But others could bid to replace her.

” Finally, watch out for an ONGC tender to hire two ‘new generation’ jack-ups to drill in 300-feet water depths for three years. “Hectic lobbying is underway for this tender,” we learn.

“Some drillers want ONGC to delay it as their rigs aren’t available. Others want it issued early.

LNG Summit