Transocean to Earn About $300m From New ONGC Drillship Contract
Key Takeaways
- •ONGC hired Transocean’s Dhirubhai Deepwater KG2 for offshore work in India.
- •The contract is valued at roughly $300 million, including additional services and mobilization fees.
- •The drillship is due to mobilize in three to four months and is scheduled to begin operations in the first quarter of 2027.
- •The agreement includes two years of priced options that could keep the rig working in India into early 2031.
- •The unit had been idle since May after finishing a long-term contract with Petrobras in Brazil.
New York-listed offshore drilling contractor Transocean has disclosed the details of its newly awarded drillship contract with India's Oil and Natural Gas Corporation (ONGC), a deal set to contribute approximately $300m in contract value.
ONGC revealed earlier this week that it had hired the 2010-built ultra-deepwater drillship Dhirubhai Deepwater KG2 for work offshore India. The charter marks the second ultra-deepwater drillship the company has hired, following a $261m deal for Vantage's Platinum Explorer, giving the state producer a pair of ultra-deepwater units as it builds out deepwater drilling capacity offshore India. In industry terms, ultra-deepwater rigs are those generally capable of working in water depths of at least 1,500 metres.
The unit will mobilize within the next three to four months, and, according to a statement from the driller, the campaign is scheduled to commence in the first quarter of 2027. The roughly $300m in contract value includes additional services and mobilization fees. The agreement also carries two years of priced options which, if fully exercised, would keep the drillship working in India into early 2031. Priced options of this kind, standard in offshore drilling contracts, fix extension rates in advance, and whether ONGC exercises them in full will determine how long the drillship remains committed to Indian waters.
The Dhirubhai Deepwater KG2 has been idle since May this year, when it concluded a long-term contract with Petrobras in Brazil. The ONGC award returns the unit to active service and removes one idle ultra-deepwater drillship from the market.
Transocean is one of the world's largest offshore drilling contractors, with a fleet focused on ultra-deepwater and harsh-environment drilling. ONGC is India's state-owned oil and gas producer and the country's largest domestic producer, while Petrobras is Brazil's state-controlled energy company. India imports the vast majority of the crude oil it consumes, and raising domestic output has been a stated government priority over successive administrations.
Source: Splash247
