Oil and Natural Gas Corporation (ONGC) is planning to completely outsource its onshore drilling rig requirements through a fleet of 70.
Currently, it uses in-house expertise at 70-odd onshore rigs
MUMBAI: Oil and Natural Gas Corporation (ONGC) is planning to completely outsource its onshore drilling rig requirements.
Currently, ONGC uses its in-house expertise to explore and drill its onshore acreages through a fleet of 70-odd onshore rigs.
A top ONGC official said: “In order to boost the company’s exploration activities onshore, we are planning to source charter rigs from next year.”
Though other exploration and production (E&P) companies are doing it in the country, ONGC, by and large, uses its own rigs.
The official said, by next year the company would be sourcing almost 20% of its rig requirement from outside. “To complete the target of exploration under the minimum works programme (MWP), it is important to extend our fleet size further. But we want go for any further procurement,” he said.
This year, he said, ONGC would add another 10 to 15 onshore drilling rigs to its existing fleet, but that would be on charter basis.
ONGC, being the biggest exploration and production (E&P) company in the country, on the onshore sector it currently owns 70 on-land drilling rigs and 74 on-land work-over rigs.
“Although the number of rigs we have are more than any other E&P company in the country, keeping in mind the voluminous works coming to us under the New Exploration Licensing Policy (NELP), the best way ahead is to outsource the service,” he said.
Under the government of India’s New Exploration Licensing Policy (NELP) rounds, ONGC has bagged 85 out of the 162 blocks (more than half), awarded in the first six rounds of bidding (24 out of 52 blocks in the sixth round).
In first two CBM round too, the E&P behemoth has won seven out of the 13 blocks awarded (five out of eight blocks in CBM-II). ONGC now has over 60% of the hydrocarbon acreages in India.
He said sourcing of rigs for the onshore sector is not as tough as it is in the offshore sector, which is currently facing an acute shortage of the vessels the world over.
“The rigs for the onshore sector are simpler in construction and consumes less time in fabrication, which is why the lead time after ordering is less and the paucity is also not highly felt,” he said.
An analyst with a leading research firm said when a company uses in-house equipment for exploration and drilling, a major part of the workforce is also employed in it.
This workforce is freed when the rigs are sourced from outside, the analyst said.
Besides that, the trend in the onshore sector globally is to source almost 60% to 70% of the rigs requirement from specialised companies dealing in chartering of rigs.
ONGC has seven onshore assets in the country. They are in Ahmedabad, Ankleshwar, Mehsana, Rajahmundry, Cauvery, Assam and Tripura. It has six onshore basins in the country which are in Cambay and Jodhpur, Assam & Assam Arakan, Krishna
Godavari, Cauvery, Bengal, Purnea, Mahanadi and Frontier basin.
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