ONGC and Reliance keep deepwater rigs busy

Vol 14, PW 26 (30 Jun 11) Exploration & Production

ONGC’s board of directors will soon consider a proposal to seek extension of its three-year contract with Transocean for deepwater drillship Discoverer Seven Seas.

“We will ask Transocean to extend the contract by between six months and a year,” confirms a senior ONGC source. Not surprisingly, Transocean was unavailable for comment but, according to industry sources, it is likely to accept ONGC’s proposal, as it has no other contract lined up for Discoverer, when its ONGC assignment ends this month.

But before it accepts, Transocean is likely to demand a (much higher) day rate of $340,000 compared to the $316,000/day at which Discoverer has been working for ONGC since July 2008. This is because $340,000 is now the prevailing day rate in the market for ‘floaters’ like Discoverer, which can drill in water depths of up to 7000-feet (2134-metres).

Meanwhile, Discoverer has nearly completed drilling exploratory well GD-91 for ONGC at its pre-NELP KG-OS-DW-III block, and should reach 3700 metres TD soon. Earlier this week, ONGC also spud an exploration well at its NELP-IV deepwater block AN-DWN-2002/1 off the Andaman Islands using Transocean-owned rig Dhirubhai Deepwater KG1 (DD-KG-1), sublet from Reliance since 2009.

ONGC is targeting to drill this well to 4500 metres TD. Last week, ONGC moved Vantage Drilling’s deepwater drillship Platinum Explorer to its 9980-sq km Mahanadi basin deepwater block MN-DWN-2002/1 to begin drilling an exploratory well.

ONGC expects it could take up to two months to drill this well to 6400 metres TD at the block which it operates with a 36% stake and where it partners Italian explorer Eni with 34%, Oil India with 20% and BPCL with 10%. ONGC is not the only one keeping its deepwater rigs busy.

Reliance has finally obeyed the DGH’s directive to immediately begin drilling development wells at its D6 gasfield, where production is rapidly falling and has moved Transocean rig Dhirubhai Deepwater KG-2 (DD-KG2) to D6 to begin drilling development well SB1 D6.