Aban is lowest bidder for ONGC rig contracts

Vol 14, PW 20 (07 Apr 11) Exploration & Production

Aban Offshore has beaten Transocean to win a keenly contested ONGC tender to re-hire two jack-ups for three years at the Mumbai High in India’s western offshore.

PETROWATCH learns Aban was the clear winner when price bids were opened on March 29, offering Aban-III and Aban-IV at an Effective Day Rate of $66,915 each. Sole competitor Transocean offered FG McClintock and Randolph Yost for an Effective Day Rate of $73,498 each.

Both Aban rigs have just completed three-year contracts for ONGC, but Aban-III was temporarily re-hired on condition she would shift to the new rate if she won the three-year re-hire tender. FG McClintock is working for ONGC in the Mumbai High till January 2012 at an Operating Day Rate of $144,500 and an Effective Day Rate of $139,960, while Randolph Yost is ‘stacked’ in the western offshore.

Chennai-based Aban has sharply slashed its rates in this tender compared to its previous ONGC contracts, say drillers. Aban-III and Aban-IV were earlier paid an Operating Day Rate of $156,600 each and an Effective Day Rate of $148,700.

One source praises Aban for its strategic thinking in not sending either rig out of Indian waters for any short-term overseas assignment. “Both Aban rigs are ‘customs duty paid’,” we are told.

“This is why it did not want to send them out of Indian waters for temporary overseas contracts and also why it managed to bid such low rates in this tender. Aban has never bid so low in the recent past.

” Still, Aban’s fresh rates for ONGC are higher than the cut-throat rate offered by Jagson Drilling in an ONGC tender in March 2010 when it offered two rigs for $64,000/day each, setting a new industry benchmark.

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