The Hindu Business Line : ONGC to procure 27 rigs in next three years

Kolkata May 8 To tide over the crisis of onshore rigs, ONGC has drawn up a plan to purchase and hire a total of 27 such rigs in next three years. The total outlay on purchase and hiring of on land rigs till 2010 is estimated at Rs 3,100 crore. An additional Rs 1,200 crore is proposed to be spent for upgradation of the existing rigs with the company.

ONGC had previously placed orders with UPET of Romania for purchase of 25 rigs at a total cost of Rs 115 crore. According to sources, the Romanian company found the contract economically unviable and landed in financial crisis leading to default in contractual obligation after supplying merely 12 rigs.

Landing in trouble

The default on the part of the supplier landed ONGC in trouble in fulfilling its targeted production from onshore assets. "The crisis of rigs may leave some impact on our production plan of onshore crude in the country in 2007-08," a company official said.

ONGC produced 8.06 million tonnes (mt) of crude from onshore assets mostly in the Western and North Eastern region during 2006-07. For the current fiscal, the company had targeted approximately nine per cent increase in production to 8.78 mt.

Talking about the fresh rig acquisition plans, a company official said that a total of three rigs were expected to be purchased in next two to three years at an approximate cost of Rs 600 crore.

This apart, ONGC has already floated three tenders for hiring 17 onshore rigs. This will also include replacement of some of the existing rigs. The total estimated outlay for hiring rigs till 2010 is Rs 2,468 crore.

According to sources a substantial number of rigs to be hired are of the specifications not available in India. "We may have to scout in the US or Chinese markets for such rigs," the official said.

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