ONGC defers decision on hiring RIL rig

State-run Oil and Natural Gas Corporation (ONGC) has deferred a decision on hiring a drilling rig from Reliance Industries (RIL), even as Chinese and European firms have emerged as suitors for the ultra deepsea drillship.

The board of ONGC last week deferred a decision to hire a rig from Reliance on an assignment basis, a company executive said. ONGC had been talking to Reliance for the past few months on hiring the DD-KG-1 ultra deepsea drillship for four years at $510,000 per day, the same rate at which Reliance had taken the rigs from Transocean Inc on a five-year lease.

“We have been desperately seeking a rig to probe oil and gas leads like the ultra deepsea UD-1 discovery for (the) past two years,” he said. But in the meanwhile, CNOOC of China and ENI of Italy too approached Reliance offering between $560,000 and $570,000 per day for th e same rig.

“They (Reliance) have given us in writing that they have offers much higher than our offer price,” an ONGC executive said.

The ONGC board agreed that DD-KG-1 was the cheapest ultra deepsea drillship available at the earliest but on objection of one independent director, deferred the hiring of the rig. “The transaction on merit is very good but timing (because of ongoing elections) is bad. We have sought more time from Reliance to decide,” he said.