The drilling industry expects a healthy rise in demand for its services based on continuous and strong demand for petroleum and natural gas in the country.
“India’s demand for petroleum and natural gas is expected to go up and correspondingly, there will be an increased demand for drilling rigs and related services. Despite massive import, India will continue to look for energy resources within the country. So we expect to see an increased demand,” the Jubilant Enpro Deputy General Manager (Business Development), Mr Anand Vatsa, said at a recently concluded petroleum industry summit here.
According to a Jubilant presentation, ONGC is estimated to drill around 150 shallow water wells in the next five years and would have to engage around eight to ten chartered rigs per year in the mid-term.
Besides this, Jubilant expects around 40-50 exploratory wells to be drilled in the East Coast in the next three years.
“Exploration activities in the Andaman Islands have been initiated. The entry of British Petroleum, BHP and ENI will increase the demand for drilling services. Around 17 to 18 chartered hired jack-up rigs would be required,” he said.
Petroleum industry experts also seem to agree with Jubilant Enpro’s assessment.
“Most of the wells to be drilled on the West Coast will be shallow water wells. I would put that figure at around 120 wells. Besides this, wells would also have to be drilled in the East Coast. So drilling contractors and rig charter companies seem to have a good opportunity,” the ONGC former Director (Exploration), Mr D.K. Pande, told PTI.
Jubilant also estimates the likely deployment of four to five deepwater floaters in the offshore sector.
“Recent discoveries at RIL’s NEC and Krishna-Godavari blocks may result in long-term intensified drilling activities from 2013 onwards, with expected drilling requirements of around 80 wells.
“Also, after ongoing appraisals, ONGC’s forward development plan for Krishna-Godavari and Mahanadi are expected to result in an incremental drilling programme of around 50 wells from 2014-2015. Besides, deep water blocks awarded under NELP VIII and IX are expected to further maintain the drilling momentum from 2014 onward,” Mr Vatsa said.
An industry expert from a leading private petroleum company also concurred with these figures.
“Exploration of these blocks is already on. So I would say that these figures are not unrealistic at all, technically speaking. But this would depend on how fast ONGC will take decisions and act on them. If it does so, then Jubilant’s assessment seems to make sense,” the expert said on condition of anonymity.
As per Jubilant’s estimates, India now has a strong offshore drilling industry and has one of the three largest jack-up deployments in the world, with 27 rigs, including those owned by the ONGC.
“Operators including ONGC and British Gas are keen to increase the number of high specification rigs to drill extended reach wells from existing as well as newer platforms.
There would be incremental demand for deep water and ultra deep water rigs from 2013-2014 onwards. However, the lower-end of deep water drilling below 6,000 feet would continue to be a major chunk of the market,” Mr Vatsa said.