Essar Wildcat says 'no, thank you' to ONGC

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

Vietnam is clearly a priority destination for Essar.

PETROWATCH learns the Mumbai-based group has abruptly turned down an ONGC contract for semi-submersible Essar Wildcat because its deployment in Vietnamese waters for Vietsovpetro is taking longer than expected. More, after Vietnam, Essar Wildcat will deploy with ConocoPhillips for a drilling campaign offshore Indonesia.

All this might surprise ONGC, which issued a ‘firm order’ on May 29 to Wildcat to mobilise at the G-4 deepwater area in the KG basin within 90 days after Essar won the contract by beating Transocean. But earlier this month (June) Essar shocked industry watchers by sending a ‘letter of regret’ to ONGC saying it could no longer mobilise Wildcat for the contract.

“Annoying a client like ONGC is a huge risk,” says a surprised industry source. “Essar must have thought hard before taking this decision.

” Wildcat was meant to re-enter a well drilled and abandoned at G-4 in April 2009 by ONGC-owned rig Sagar Vijay. Two new wells were also planned.

But Essar’s decision to withdraw the rig means ONGC must now scramble to hire another one or award the contract to Transocean. Furious, ONGC’s tender department reportedly wants to blacklist Essar from competing in future ONGC tenders for two years.

When contacted, an Essar source said delay in completing Wildcat’s present contract for Vietsovpetro meant it could not mobilise offshore India by the ONGC-set deadline of August 25. "It was painful to send the ‘regret letter’ to ONGC,” admits Essar, “but we had no choice.

” Wildcat will work for Vietsovpetro till mid-August before moving to Singapore for a month to undergo maintenance. Another month to sail to Indian waters and Essar would have risked missing its October 15 mobilisation deadline with ConocoPhilips to begin a nine ‘firm’ and three ‘optional’ well campaign in Indonesia.

LNG Summit