Financial Daily from THE HINDU group of publications
Thursday, Jun 08, 2006

Cross Currency

Group Sites

Industry & Economy - Petroleum

11 E&P cos team up for rig-sharing project

Richa Mishra

Bid to bring down cost of hiring rigs

New Delhi , June 7

Exploration and production (E&P) companies are looking at various cost-saving options to enhance returns from their core activities. According to a senior Government official, 11 E&P companies, both domestic and foreign, have associated themselves with the rig-sharing project initiated by the Directorate-General of Hydrocarbons (DGH).

This would enable the companies to bring down the cost of hiring rigs, one of the major components for exploration activities, the official said.

With the international crude prices hovering over $70 a barrel, the pressure is on the companies to speed up exploration efforts to enhance production.

As per industry estimates, drilling rates for sophisticated deepwater rigs have gone up from about $200,000 a day to $400,000 in the last one-and-a-half years. Hiring rigs rather than owning them is a preferred option for oil exploration companies, especially if a field has not yet been discovered, he told Business Line.

The 11 companies participating in the project are Oil India Ltd, GAIL (India) Ltd, Reliance Industries Ltd, Niko Resources Ltd, Hardy Exploration, Gujarat State Petroleum Corporation Ltd, Hindustan Oil Exploration Company Ltd, Jubilant Oil & Gas, Cairn Energy, BG Exploration & Production India Ltd and ENI.

Oil and Natural Gas Corporation (ONGC), however, is not part of the project, till now. According to sources, ONGC has declined the proposal since it was in a comfortable position as far as its own rig requirements are concerned.

The 11 companies have agreed to pool in their requirements and plan a joint strategy, the Director General of Hydrocarbons (DGH), Mr V.K. Sibal, said.

The intention is that in this resource strain era, the companies can save cost by sharing rigs through a long-term agreement, he said.

The companies plan to jointly hire rigs through a Norwegian service provider.

The experts from Norway are expected in the next two months, he said. A study will be conducted a copy of which will be sent to all the 11 companies, he said.

More Stories on : Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Early monsoon raises reservoir levels in Kerala

Nandan opens facility at Icrisat ASP
Proposal to introduce licence fee on CTVs draws flak
TN's Annual Plan size revised
Monsoon components falling apart
Malaysia to issue multiple entry visas to Indians
India, Pak agree on SAARC classification
Swajas Air sets up medical evacuation co
CLRI develops therapeutic footwear
Maharashtra Board okays 24 SEZs
Free pricing for oil PSUs
11 E&P cos team up for rig-sharing project
`Cut in customs duty to squeeze oil refiners margins'
Change in pricing to hit refining margins of refiners
Power cos to invest Rs 60,000 cr in 5 yrs
Petrol price: 55% taxes
VAT panel meet
Tally in pact with TNOU
For a new look
Janapriya weighing fund-raising options
EGoM tightens norms for gem & jewellery, biotech SEZs
K. Dhandapani arm plans new projects
PHDCCI for TV monitoring agency
Palladam weaving park to have marketing consortium
Bangalore tops biocluster list with Rs 1,400-cr revenue
`Develop low-cost drugs for Third World diseases'
USO Fund support for broadband in rural areas
Kamal Nath to lead Indian group at WEF meet
Ion Exchange customer meet
PVR gets licence for 6-screen Mumbai multiplex
Training for leather, jute enterprises at Hyderabad
On the presumption of dishonesty
Issues in cash-flow statement
Jeevan Akshay-III eligible for Sec 80C benefits
Centre rules out rubber export ban
Nod for STC to export 1.5 lakh t sugar

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line