ONGC-SCI to test waters in rig manufacturing
In a bid to tackle the acute shortage of rigs in the international market, state-owned ONGC has decided to join hands with Shipping Corporation of India (SCI) to manufacture rigs.
By Sumantra Das & Piyush Pandey, ET Bureau |
MUMBAI: In a bid to tackle the acute shortage of rigs in the international market, state-owned ONGC has decided to join hands with Shipping Corporation of India (SCI) to manufacture rigs. ���The proposed JV will soon float a global tender for technical support in manufacturing rigs and other offshore supply vessels (OSVs),��� SCI chairman and managing director S Hazara told ET.
Reliance Industries, India���s largest private sector company, is also planning a similar move after lack of rigs created problems for its work programme. ONGC now has access to 27 offshore rigs. Apart from the 20 chartered ones, the company also owns seven offshore rigs, including five jack-up rigs and deepwater rigs.
ONGC is not able to drill its well UD-1 in the KG basin to prove its claim of discovering over 20 trillion cubic feet (TCF) of gas in the KG basin. The discovery was made in December 2006 and the well has been capped since then as ONGC does not have ultra-deep water rigs.
���Rigs are not available in the market even if we are willing to pay a premium. We are talking to SCI to jointly manufacture rigs. It may be by way of special purpose vehicle (SPV),��� says ONGC chairman and managing director RS Sharma.
In a presentation to DGH, ONGC admitted that in the Mahanadi and Cauvery basins the company could not meet the target due to lack of rigs. ONGC also failed to meet its minimum work programme (MWP) in the NEC Basin. Indian firms are failing to meet their work commitments in NELP and pre-NELP blocks resulting in relinquishment of the blocks back to the government.
The day rate for deep water rigs has gone up from $1,00,000 to over $7,00,000 in the last couple of years.
The present shipbuilding capacity of India is at a nascent stage to handle country���s current requirements.
Reliance Industries, India���s largest private sector company, is also planning a similar move after lack of rigs created problems for its work programme. ONGC now has access to 27 offshore rigs. Apart from the 20 chartered ones, the company also owns seven offshore rigs, including five jack-up rigs and deepwater rigs.
ONGC is not able to drill its well UD-1 in the KG basin to prove its claim of discovering over 20 trillion cubic feet (TCF) of gas in the KG basin. The discovery was made in December 2006 and the well has been capped since then as ONGC does not have ultra-deep water rigs.
���Rigs are not available in the market even if we are willing to pay a premium. We are talking to SCI to jointly manufacture rigs. It may be by way of special purpose vehicle (SPV),��� says ONGC chairman and managing director RS Sharma.
In a presentation to DGH, ONGC admitted that in the Mahanadi and Cauvery basins the company could not meet the target due to lack of rigs. ONGC also failed to meet its minimum work programme (MWP) in the NEC Basin. Indian firms are failing to meet their work commitments in NELP and pre-NELP blocks resulting in relinquishment of the blocks back to the government.
The day rate for deep water rigs has gone up from $1,00,000 to over $7,00,000 in the last couple of years.
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Currently, there are 23 shipyards in the country, of which seven are under administrative control of the Government of India, two with state governments and the rest in the private sector. The present shipbuilding capacity of India is at a nascent stage to handle country���s current requirements.
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