Oil and Natural Gas Corporation Ltd. (ONGC) is capitalizing on lower rates for oil field services to press on with its exploration and production projects offshore India, a senior executive of the country's state-owned company told local daily The Economic Times Monday.
The company recently awarded contracts for nine platform support vessels at $15,000 per vessel per day, with the rate around 40 percent below last year.
"Two years ago, it was unthinkable for us to extract even a few dollars' concession. But things have changed now," Tapas Kumar Sengupta, director (offshore) told The Economic Times.
ONGC, which is a major player in India's upstream sector, deploys about 70 vessels round the year and intends to award contracts for 10 more vessels within the month.
The lower rates charged by petroleum services firms resulted from a sharp decline in oil prices, which have fallen by more than 50 percent since the second half of last year to around $50 to $55 a barrel for U.S. crude futures and North Sea Brent crude futures, respectively.
Oil companies have responded to lower oil prices by cutting capital expenditure, a move which resulted in fewer contracts and lower rates for petroleum services firms such as drilling companies.
"We are ready to take advantage of the falling rates," Sengupta added.
In this regard, ONGC may soon issue tenders for rigs for its new projects amid lower overall rig utilization rates, which according to Rigzone's RigLogix database has fallen to 73.8 percent April 3 from 81.1 percent a year ago.
Separately, ONGC Videsh Ltd. (OVL) -- ONGC's unit that focuses on overseas upstream assets -- is among three dozen global energy companies that have expressed interest to pre-qualify for Mexico's inaugural licensing round for 14 shallow oil and gas exploration blocks, The Economic Times said Sunday.
Mexico is opening up its oil sector to private players for the first time after more than 75 years of monopoly by state-owned Petroleos Mexicanos (Pemex), with the exploration blocks on offer holding prospective resources of around 3.7 billion barrels of oil equivalent, the Indian daily said, citing sources.
Some Asia Pacific companies reportedly interested in the Mexican tender include Thailand's PTTEP, Australia's BHP Billiton as well as Japanese firms such as Inpex, Jogmec, Japex and Mitsubishi.
Successful bidders will have an initial exploration period of four years, with the possibility of a two-year extension and a one-well drilling commitment.
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