Essar Oilfields eyes 35% rise in FY19 revenue with GAIL as oil rig partner

GAIL deal is for drilling three firm plus two optional wells in Gujarat's Cambay basin; work likely to start in April-May

With Essar Oilfields announcing a contract with GAIL India for an oil drilling rig, the company is looking at a 35 per cent increase in its revenue in 2018-19. The GAIL contract is for drilling three firm plus two optional wells in Gujarat’s Cambay basin. Drilling for the project is expected to commence in April-May 2018.

The company has signed a series of onshore and offshore drilling contracts in FY18 with companies like GAIL, ONGC, Oil India and Mercator Petroleum.

With these contracts, the company is expecting to grow its revenue to Rs four billion in FY19, or 35 per cent more than the figure in the current fiscal.

Rajeev Nayyer, CEO, Essar Oilfields, said: “Both public and private sector oil majors have intensified exploration activity in India, and they have reposed faith in us for their drilling needs. After having signed back-to-back contracts with clients of this stature, we are poised to bag more such assignments and grow further in the next fiscal.”

Global exploration activity was down after the crash of oil prices, but it did not stop in India because of the government push for energy security and increasing domestic production, he said.

Nayyer said the rates of land rigs have improved to about $13,000-14,000 a day but the prospects for the company has improved more because of the continuity of contract flow. "We expect three more contracts to come up."

Essar Oilfields will be using the Essar Rig MR01 (1,000 HP) to drill the wells for GAIL. The MR01 is the latest addition to the company's fleet of rigs and is currently drilling for Mercator Petroleum. After completing this assignment, the rig will be deployed for the GAIL project.

In addition to its 15 land rigs, Essar Oilfields also operates Essar Wildcat, an offshore semi-submersible rig capable of drilling in water depths of up to 1,600 feet and drilling depth of up to 25,000 feet. Since May 2017, this rig has been deployed on a three-year contract with ONGC in the Krishna Godvari basin.

Essar's oilfields services business provides contract drilling services to oil & gas companies across the globe. The company was incorporated in 2006 with a focus on providing quality onshore and offshore drilling services to domestic, as well as international clients. With a diverse mix of rigs in its fleet, the company continues to win and execute projects for prestigious clients, such as ONGC, Oil India, HOEC, IOC and GAIL. All Essar Oilfield rigs are equipped with advanced equipment and have a proven track record of achieving high drilling efficiencies.