The Hindu Business Line : ONGC’s exploration campaign may be halted for 6 months

ONGC’s deep and ultra-deepwater offshore exploration campaign may come to a standstill for at least six months between January and June, as the contract with the sole chartered floater in its disposal — Discoverer Seven Seas (DSS) of Transocean — ended in December 2007.

According to sources, the non-availability of rigs may impact the company’s offshore campaign in gas-rich Krishna Godavari, Mahanadi and North Eastern coast (NEC) basins in the east coast, where it has made a series of major offshore discoveries in last two years.

Though ONGC has renewed the contract with Transocean for DSS at almost two-and-a-half times the previous dry-rate, the rig has already joined Reliance to participate in a two-well drilling campaign in KG basin till February, to be followed by three to four months dry-docking.

Rig shortage

According to Transocean, Discoverer Seven Seas will re-join ONGC in June 2008 to serve a three-year contract period till 2011 at a dry-rate of $3,16,000 up from $1,25,000 a day.

Ultra-deepwater rigs can drill in water depths of over 1,000 metres. There is an acute shortage of such rigs worldwide leading to spiralling of dry-rates. Though ONGC has two company-owned floaters, Sagar Vijay and Sagar Bhushan, these rigs can drill in water depths of 600 metres and 300 metres, respectively.

ONGC was hamstrung by rig-shortage after expiry of contract with Belford Dolphin — a higher specification floater — in February-March 2007.

The company’s quick attempt to hire a new generation ultra-deepwater rig from NorskHydro had failed as the Norwegian company demanded a dry-rate of close to $6,50,000 considered too high to be approved on nomination basis by a PSU. Accordingly, in December 2007, ONGC had floated tenders for hiring one ultra-deepwater rig.

Better positioned

Interestingly, India’s largest private sector E&P operator, Reliance appears to be comfortably positioned compared to ONGC to pursue its ultra-deepwater campaigns in the days ahead.

According to Transocean, the world’s largest rig operator, Reliance currently has ultra-deepwater floaters Deepwater Frontier and Discoverer-534 at its disposal till 2010 and 2011.

While Discoverer Seven Seas joined it for January-February 2008, a three-year contract with Deepwater Expedition, also a high specification floater, will begin in June 2008.

This apart, the company has also booked Deepwater Pacific-I, which is currently under construction.

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