Modi's $27B Oil Quest Gives Services Firms A Lifeline

ONGC has reduced the cost of its Krishna-Godavari basin block by almost a third from earlier estimates of about $7 billion as prices slide for the contract rate for rigs and oilfield equipment and services.

Offshore jack-up rigs, which used to cost $80,000 to $90,000 a day, are now available for less than $50,000, ONGC’s Sarraf said. “We could say there is 20 percent to 50 percent reduction in the cost of goods and services.”

Despite the price competition, service providers are finding that an India strategy is critical given the scarcity of spending elsewhere. Finnish company Wartsila OYJ’s Indian unit sees opportunity here given the tough global environment.

“In the exploration segments, if projects are coming up of course it’s an opportunity for us,” Kimmo Kohtamaki, president and managing director of Wartsila India, said. “We have matching products and no one else is investing. Everyone is laying off, it’s a tough market.”

To contact the reporters on this story: Saket Sundria in Mumbai at; Dhwani Pandya in Mumbai at; Debjit Chakraborty in New Delhi at To contact the editors responsible for this story: Ramsey Al-Rikabi at Candice Zachariahs, Alpana Sarma


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