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The construction of the first indigenous offshore drilling rig is likely to be delayed as Mumbai-based Bharati Shipyard may not be able to build and deliver the jack-up rig, used to drill oil, by the scheduled month of April 2009.
"As part of its foray into the offshore space, Bharati Shipyard is planning to build the rig at its proposed Mangalore shipyard. But the shipyard facility is not ready. Going by the pace of work, the company will not be able to deliver the rig in time," said a source.
Great Offshore, a leading integrated offshore service company, had placed the order for the rig with Bharati Shipyard. Betting big on the rig, scheduled to be delivered by April 2009, Great Offshore clinched a five-year contract from ONGC for deploying it. The ONGC contract is slated to commence on or before May 2009.
Bharati Shipyard Managing Director Vijay Kumar said the project was on track and the company would be able to deliver the rig in time. "We have tied up with US-based drilling major Le Tourneau Inc for sourcing designs and basic equipment for the rig," said Kumar. "Moreover, we are the first company to undertake rig construction for other international projects," he added.
However, industry analysts differ. "Established players in offshore rig construction take 18-24 months to build a rig under ideal conditions. For a fresh player, it is not possible to deliver the rig in so short a period," said an industry source.
Any delay would adversely impact the E&P (exploration and production) activities of ONGC and expansion plans of Great Offshore.
At present, Great Offshore earns 22 per cent of its revenue from the drilling rig business. This is expected to shoot up when the new rig comes in.
Great Offshore Managing Director Vijay Sheth said, "As of now, there is no delay in delivery by Bharati Shipyard. We are also supervising the construction activity."
In 2005-06, about 35 rigs were operating in India (including jack-up rigs, drill barge, platform rigs and drill ships). This rose to 45 in 2006-07 and is expected to go up to 50 by the end of 2007-08. These figures include ONGC-owned rigs.
A total of 55 blocks were offered under phase VI of the New Exploration and Licensing Policy. The higher level of exploration activity in India has increased the demand for rigs over the past few years.
Considering that less than half the wells awarded since 2000 have been drilled, the demand for rigs is set to remain high in the near future. The government has decided to offer more exploration blocks under NELP VII in the coming days.
