The Hindu Business Line : ONGC plans to acquire ultra deepwater rig

Kolkata March 19 Taking a cue from the continuing rig crisis and the resultant impact on drilling plans, ONGC is considering acquisition of an ultra-deepwater rig.

The proposal has been mooted to safeguard its long-term interests in deepwater exploration, which was now heavily dependent on chartered rigs.

"As part of our long-term plan for ultra-deepwater exploration, we are exploring a host of opportunities including acquisition of a suitable rig," a senior company official told Business Line.

The executive committee comprising executive directors of ONGC has already approved a proposal to explore such opportunities. It is felt that apart from the high costs involved (of over $400 million for building a new one), the existing crisis now offers only limited acquisition opportunity for a new rig.

Ultra deepwater rigs, also known as floaters, are suitable for drilling activity in water depths exceeding 1,000 metres. There is an acute shortage of such rigs worldwide. Hence, besides spiralling of charter rates, most of the rigs are overbooked.

Present crisis

Elaborating on the present rig crisis and its long-term impact on the company, the official said that ONGC was now having access to only one ultra-deepwater rig to complete its drilling plans in the near future.

"While we are trying our best to charter another one, in all probability we are faced with the uphill task of completing the minimum work programme in five NELP-I blocks in KG and Mahanadi basin during this year," the official said.

According to him, considering the fact that the company has secured a large number of ultra-deepwater blocks during the last few NELP rounds, the situation will worsen further in the coming years unless and until the availability of such drill ships improve dramatically.

ONGC currently has access to 27 offshore rigs. Apart from the 20 chartered ones, the company also owns seven offshore rigs, including five jack-up rigs suitable for drilling in shallow waters, and deepwater (up to 1,000 metres) rigs.

More Stories on : Outlook | Petroleum | Oil & Natural Gas Corporation Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page