ONGC tender for KG basin rigs gets huge response
India’s offshore gas hub, the Krishna Godavari basin, off the coast of Kakinada in Andhra Pradesh now figures prominently on the radars of global companies engaged in offshore drilling.
Indeed, ONGC’s recent tender for deep sea drilling rigs has attracted huge response from across the globe. Both ONGC’s brand image and the potential that lies deep in the sea at KG Basin actually earned the global response.
In all, 10 international offshore drilling contractors including Transocean Inc have offered best-in-class deepsea drilling rigs to ONGC for its KG-D5 gas field developments.
ONGC had floated a tender to charter hire two deep-water drilling rigs and one anchor moored rig for bringing gas in Bay of Bengal block KG-DWN-98/2 or KG-D5, which sits next to Mukesh Ambani’s Reliance Industries KG-D6 fields.
“We have received tremendous response to the tender. International drilling contractors have bid very aggressively,” an official was quoted as saying in a section of the media.
ONGC bullish despite low prices
What attracted the global companies is the bullish stand of ONGC on exploration, despite low prices. Indeed, the company is among the very few explorers around the world who are actually going ahead with the development campaign despite low prices.
This has helped the company in two ways. One, the low gas prices have shied away explorers from going ahead with their exploration activities in full steam and this resulted in global contractors struggling to get new jobs. And hence they literally pounced on the ONGC offer.
Second, ONGC can now expect to get a better deal in terms of prices from the contractors for the same reason.
Transocean Offshore International Ventures Ltd offered Deepwater Millenium, Discoverer India and Discoverer Luanda deepwater rigs while Ensco Maritime Ltd offered two of its rigs, Ensco 8500 and Ensco 8501.
Other bidders include Seadrill Orion Ltd, Drillship Kythnos Owners Inc, Dupont Maritime LLC, Dynamic Drilling & Services, Ensco Maritime Ltd, Queiroz Galvano Leo Gas, Seadrill Orion, Universial Energy Resources Ind, Vantage International management Co and Japan Drilling Co.
ONGC is investing $ 5.07 billion for developing Cluster-II discoveries in KG-D5 block, which is expected to pump out natural gas from June 2019 and oil by March 2020.
The 7,294.6-sq-km deepsea KG-D5 block has been broadly categorised into Northern Discovery Area (NDA — 3,800.6 sq km) and Southern Discovery Area (SDA — 3,494 sq km).
The NDA has 11 oil and gas discoveries while SDA has the nation’s only ultra-deepsea gas find of UD-1. These finds have been clubbed in three groups — Cluster-1, Cluster-II and Cluster-III.
From Cluster-II, a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak to 16.56 million standard cubic meters per day by end-2021.