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Reliance seeks 3-year drilling holiday

Reliance seeks 3-year drilling holiday
PTI
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First Published: Mon, Oct 08 2007. 04 09 PM IST
Updated: Mon, Oct 08 2007. 04 09 PM IST
New Delhi: Reliance Industries Ltd has sought a three year drilling holiday from exploring in nine deep-sea blocks it had won in NELP auctions, saying it has been hit by the acute paucity in supply of drilling rigs worldwide.
“Global scarcity (of deepwater drilling rigs) has had a significant impact on RIL’s drilling operations,” RIL CEO (Petroleum) P. M. S. Prasad wrote to Oil Secretary last month.
Prasad said the oil regulator DGH’s policy of merging exploration phases to tide over shortage of drilling rigs was inadequate.
“Merging of the exploration phase proposes only a short term solution as it amasses the work commitment into the second and fourth phase and does not provide respite to the contractor over the long term,” he said.
RIL has committed to drill 73 wells in the three NELP-I blocks, five NELP-III blocks and one pre-NELP block, requiring more than 12 dig years to accomplish the programme. Against this, it currently has two deep water rigs - C Kirk Rhine and Deep Water Frontier.
It had contracted three more rigs - Expedition, D534 and Neptune for mobilisation by June 2006, August 2006 and January 2007 respectively, with an additional rig Blackford Dolphin slated to join the fleet in October 2007.
“Unfortunately, despite having executed the required contracts, which are always subject to availability, the rigs are still not being made available to RIL,” Prasad said.
While D534 is expected to reach RIL in November, Expedition would not be there before October 2008 and Neptune and Blackford Dolphin would not come before May 2008.
”The planned rig hiring/deployment schedule is constantly under deferment due to delays in bringing to India the contracted rigs because the rig operators are fulfilling their spill over commitments in previous deployment campaigns,“ Prasad said, adding that the delays had made it extremely difficult for RIL to complete the work programmes on time.
As an example, he pointed to pre-NELP block GK-OSJ-3 where RIL faced inordinate delays and a grim situation due to “inability to identify and earmark a suitable drilling rig for meeting exploratory commitments.”
Prasad said the US Minerals Management Services has allowed operators in Gulf of Mexico extensions and other similar reliefs in light of the rig shortages faced by them.
“RIL has taken on unparallel commitments and challenges in the deepwaters of our country,” he said pointing to 31 discoveries in seven years.
“RIL has made 19 discoveries in deepwater blocks with a success ratio of about 76% to date,” he said.
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First Published: Mon, Oct 08 2007. 04 09 PM IST