The Hindu Business Line : Reliance, ONGC agree to share drilling rigs

New Delhi, Feb. 5 In a move that could be seen as achieving two objectives with a single effort, hydrocarbon majors Reliance Industries Ltd (RIL) and ONGC have decided to share exploratory facilities such as drilling rigs.

This would not only help the companies save cost but also overcome the shortage of rigs.

An RIL official told Business Line, “We are soon going to offer one mid-water rig to ONGC.” Details are being worked out to offer more rigs.

Technically speaking, RIL would be sub-leasing the rigs it has hired to ONGC, he said, explaining that “the rigs would be offered at the rate at which RIL has hired it.” A mid-water rig like Actinia, which RIL has offered to ONGC, has cost the private-sector exploration company about $190,000 a day (rent).

Although this is not the first instance of RIL sub-leasing its rig to another exploration company, it is the first such effort between the two arch rivals ONGC and RIL. This is in sync with what the upstream regulator, the Directorate General of Hydrocarbons (DGH), has been advocating — that oil companies should share infrastructure. Asked why RIL would offer its rigs when it needed them for itself, the company official said, “The rigs which we have are meant for specific drilling locations. Currently, we don’t have any locations for the rig Actinia. It is an exploratory rig and can take development drilling in shallow locations.”

A senior ONGC official said, “we are working out the details. There was a meeting recently and an agreement should be in place by the end of this month.”

Elaborating on the nature of the details, he said, “These are integrated services. Besides, RIL would be shuffling the rigs, so we have to see which rig would be available when and, accordingly, the exploratory activity has to be scheduled so that both the companies can work without hampering each other.”

ONGC has a fleet of rigs — 33 offshore rigs (nine owned by the company and 24 charter hired) and 74 onshore rigs (70 owned and four charter hired). It is in the process of acquiring more in the coming weeks.