21 oil hunters to pool services and equipment to slash costs
21 oil and gas operators including BP, ENI, BG, Cairn, Hardy, RIL and ONGC have decided to form a joint pool of scarce equipment and services to save cost and time over-runs.
By Rajeev Jayaswal, TNN |
NEW DELHI: The domestic black gold hunt takes an exciting turn as 21 oil and gas operators including BP, ENI, BG, Cairn, Hardy, RIL and ONGC have decided to form a joint pool of scarce equipment and services to save cost and time over-runs. Their aim is to create an enabling environment for rig-sharing. Rigs, especially for deepwater exploration & production (E&P), are scarce and cost $5-7.5 lakh a day.
“E&P operators in the country have joined hands to evolve common standards of equipment and spares so that it could be shared among them. The equipment are costly and are vital for E&P works. We intend to buy together the equipment and spares and keep them in strategic locations so they could be shared by all member operators.
This would not only help in bringing down cost of E&P operations but also ensure ready availability of spares in an emergency. Saving delay in E&P operations means saving costs,” AOGO secretary general and Hardy Exploration vice-president Ashu Sagar said.
Mr Sagar said rig-sharing would be the next step. “It would require an enabling legal structure. E&P activities are guided by the New Exploration Licensing Policy (Nelp) regime where cost is recoverable in case of a discovery. Hence, rig-sharing among operators would require framing principles for sharing the rig cost,” he said.
Sharing of rigs may, however, raise complicated issues like who would bear the cost when the rig is idling due to rough weather or delay in getting necessary approvals or any other delay. Rig-sharing will also mean appropriate changes in production-sharing contracts.
“The process is on but it would take time. We decided to initially have a pool for equipment and services,” he said. Membership of AOGO, or Association of Oil & Gas Operators, is restricted to experienced operators. Other members are Santos, Prize, Premier, Niko, Naftogas, JTI, Jubilant, HOEC, GSPC, GeoPetrol, Focus and AssamCo.
The directorate general of hydrocarbons (DGH) is also trying to find a way to overcome rig shortage. In a presentation to the DGH, rig management firm RMNAS said judicious use of a deepwater rig could save up to $55,000 a day, resulting in $83-million saving over the five-year contract period.
It will also save mobilisation and demobilisation cost, that runs into millions.
rajeev.jayaswal@timesgroup.com
“E&P operators in the country have joined hands to evolve common standards of equipment and spares so that it could be shared among them. The equipment are costly and are vital for E&P works. We intend to buy together the equipment and spares and keep them in strategic locations so they could be shared by all member operators.
This would not only help in bringing down cost of E&P operations but also ensure ready availability of spares in an emergency. Saving delay in E&P operations means saving costs,” AOGO secretary general and Hardy Exploration vice-president Ashu Sagar said.
Mr Sagar said rig-sharing would be the next step. “It would require an enabling legal structure. E&P activities are guided by the New Exploration Licensing Policy (Nelp) regime where cost is recoverable in case of a discovery. Hence, rig-sharing among operators would require framing principles for sharing the rig cost,” he said.
Sharing of rigs may, however, raise complicated issues like who would bear the cost when the rig is idling due to rough weather or delay in getting necessary approvals or any other delay. Rig-sharing will also mean appropriate changes in production-sharing contracts.
“The process is on but it would take time. We decided to initially have a pool for equipment and services,” he said. Membership of AOGO, or Association of Oil & Gas Operators, is restricted to experienced operators. Other members are Santos, Prize, Premier, Niko, Naftogas, JTI, Jubilant, HOEC, GSPC, GeoPetrol, Focus and AssamCo.
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The directorate general of hydrocarbons (DGH) is also trying to find a way to overcome rig shortage. In a presentation to the DGH, rig management firm RMNAS said judicious use of a deepwater rig could save up to $55,000 a day, resulting in $83-million saving over the five-year contract period.
It will also save mobilisation and demobilisation cost, that runs into millions.
rajeev.jayaswal@timesgroup.com
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