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OCT 11 2018

ONGC plans to buy 27 rigs for up to Rs 3,500 cr

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 11th OCT 2018

 

Oil and Natural Gas Corp (ONGC) is planning to purchase 27 drilling rigs to replace nearly half of its ageing onland rigs in a deal that could cost Rs 3,000-3,500 crore.

 

The state-run explorer has floated a tender seeking bids from interested suppliers by November 14. ONGC had initially planned to purchase nearly 50 rigs but later curtailed it to 27.

 

Fresh purchases will help partly replace its ageing fleet of 67 drilling rigs that’s currently operating at its onshore fields, a company executive said. “Most of our onshore rigs are old and that have an impact on the quality of operation. Which is why we are trying to replace them. New rigs will make things more efficient,” a company executive said.

 

ONGC has traditionally owned onshore rigs, instead of hiring them, due to scarce availability of quality onshore rigs, the executive said. For offshore, however, the rigs are always hired due to their adequate availability, he added. Drilling rigs are mostly massive mobile structures housing equipment used to penetrate the earth’s surface to allow extraction of oil and gas from underground reservoirs

 

As it plans to step up oil and gas output that has been stagnant for years, ONGC has raised its drilling activity in recent years. It drilled 503 wells in 2017-18, the highest in 27 years. The company plans to drill a record 535 wells in 2018-19 at a cost of Rs 17,600 crore.

 

The company has also taken steps to advance operational efficiency by introducing new technology, building more efficient well designs, and standardising well testing procedure, an executive said.

 

India’s production of crude oil has been falling for more than six years, increasing its dependence on imports as local consumption expands with rapidly growing economy. Domestic oil production contracted 3.3% from a year earlier to 14.6 million metric tonne in the April-August period this year, raising dependence on imports for 83.2% of the country’s oil requirement.

 

Soaring crude prices in the international market and a sharply fallen rupee have pushed up India’s import bill and started hurting the economy. India paid $88 billion for importing crude in 2017-18. Importers have already paid $49 for oil in the April-August period.

Tags

Gas Natural Gas Oil ONGC Import Oil and Gas Crude Oil India ongc

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