RIL hires drill ship for KG gas fields

RIL hires drill ship for KG gas fields

Mumbai: Mukesh Ambani-owned Reliance Industries Ltd has hired an ultra deep water drill ship, Deepwater Pacific 1, from a firm in which Transocean Inc., the biggest offshore drilling contractor worldwide, has 50% ownership.

The drill ship is currently under construction at the yard of Samsung Heavy Industries in South Korea. The drill ship has been awarded a firm commitment for a four-year drilling contract, which may be converted on or prior to October 2008, into a five-year drilling contract.

Contract revenues which could be generated over the contract period are estimated at $766 million for the four-year term, or $935 million for the five-year term, if converted, a statement from Transocean Inc said.

This means that during the first six months of the contract, the operating day rate is $495,000, regardless of the duration of the remaining terms of the contract. The day rate for the remaining three and a half years of the contract is $530,000. On or prior to 31 October 2008, the contract may be extended to five years, in which case the day rate would be reduced to $515,000.

Reliance, India’s top private company, is developing two deep-sea gas fields in India’s Krishna Godavari basin, off the southern state of Andhra Pradesh and aims to produce 80 million cubic meters of gas a day (mmscmd) by 2009.

A global shortage of deepwater drilling rigs has affected the firm’s oil production programe.