India’s largest private sector oil and gas exploration company, Reliance Industries Ltd (RIL), plans to lease more rigs to double the number of its drilling rigs in the country to six by August.
The company’s decision to increase its drilling capacity follows its inability to ink rig-sharing agreements—11 companies teamed up last year and decided they would share rigs to cut costs and manage scarcity of the drillers—with other oil and gas exploration and production firms operating in India.
RIL is getting leasing three deep-water drilling rigs. “We will get these rigs by August this year and that will help us in our exploration programme,” said Rabi Narayan Bastia, senior vice-president, petroleum business, (E&P) division, RIL. Bastia, who is also the chairman on the committee in charge of rig-sharing added: “Though around seven months have passed (since we decided to share rigs), there have been no developments on rig sharing.”
Bastia declined to put a value to the amount RIL will pay for the rigs. Rigs are in short supply all over the world and a deep-water rig commands a daily rental of around $300,000 while an ultra deep-water rig may command a daily rental of $400,000 (with no service cost included). RIL will deploy its rigs on India’s east coast where it has significant exploration and production activities.
Oil and Natural Gas Corporation (ONGC) has the maximum number of rigs in the country. Of its 100 rigs , 30 are offshore rigs. While 10 of these offshore rigs are company-owned, the rest have been leased by the oil and gas major. “As far as rig-sharing is concerned, nothing is possible till 2009-10. We are willing to share our onshore rigs, but sharing offshore rigs is out of question,” said a senior ONGC executive who did not wish to be identified. ONGC is not one of the 11 companies that decided to share rigs.
RIL plans to position itself as a deep-water exploration and production company; most major discoveries in recent years have been in deep waters.
RIL has already found gas in the KG D1 and D3 deep-water blocks in the Krishna-Godavari basin.