ONGC on overdrive to pump up output

MUMBAI: Oil and Natural Gas Corporation (ONGC) plans to increase exploration and production assets and has issued letters of intent (LoI) to 17 offshore supply vessels (OSVs) for drilling contracts.

Shipping Corporation of India (SCI), ABG Shipping, TAG Sealogistics (TSL), Great Offshore (GOL), Samson Maritime and Norway’s Rolv Berg have received LoIs and agreements may be signed in a month.

“SCI and ABG have bagged contract for five vessels each while TSL got three. GOL, the de-merged entity of GE Shipping, has got LoIs for 2 vessels. Samson Maritime and Rolv Berg will provide a platform supply vessel (PSV) and a 120-tonne bollard pull anchor handling tug supply vessels, respectively,” said sources. An official says, the company has to pay Rs 1,300-1,400 crore to charter 27 vessels. Currently, charter rates of OSVs are around $7,000 a day while PSV rate is almost $13,000. ONGC may release LoIs for 10 more vessels in a month.

A recent Lehman Brothers survey notes the global spend on exploration and production will rise 13% in 2007. In 2005 and 2006, E&P companies had seen a 20% and 30% increase in spend. Swire Pacific, Emas Offshore, Halul Offshore, Tidewater Marine International and Noble Discovery Drilling Technologies were shortlisted for the ONGC contract. Some of these are in talks with RIL and BG for OSV contracts, though nothing is final yet.