In order to drill three three wells in water depth ranging from 10,170 to 11,318 feet, ONGC upgraded at its own cost an ultra deep-sea drilling rig it had hired from Reliance Industries (RIL).
ONGC upgraded the rig at its own cost because it does not want to take the risk of having to pay liquidated damages if these wells were not drilled on time and there was no available rig to carry out the drilling commitment it made when it won the blocks.
These blocks are KG-DWN-2004/1, KG-DWN-2004/6, CY-PR-2004/1 and CY-DWN-2004/3 in New Exploration Licensing Policy (NELP) rounds. This is one of the rare occasions that ONGC had decided to take the cost of the upgrade on itself.
It may be recalled that Oil and Natural Gas Corp (ONGC) hired the ultra deep-sea drilling rig from RIL on assignment basis for drilling in 10,000 feet water depth but is capable of being upgraded to 12,000 feet.
ONGC said it would return the upgraded rig to the RIL by the end of July after completion of the four year period. ONGC had in July 2009 hired the rig Dhirubhai Deepwater KG-1 (earlier christened Deepwater Pacific-1) for four years at close to Rs 3,915 crore. The upgradation incurred by ONGC is $551,15.
It is worth mentioning that earlier, the Comptroller and Auditor General of India (CAG) had pulled up ONGC for hiring the rig from RIL without calling for competitive bids.
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