India ONGC Exec:Rig Shortage Could Slow Offshore Exploration

New Delhi Apr 10, 2007 (Dow Jones Newswires)

India's state-run Oil & Natural Gas Corp.'s (500312.BY) plans to explore its biggest gas discovery in a block in the Bay of Bengal may be delayed due to a global shortage of rigs, a senior ONGC executive said.

The executive confirmed a local newspaper report earlier Tuesday that said ONGC has no immediate plans to re-enter the block due to a lack of ultra-deepwater rigs.

"We are scouting for rigs, but availability is a problem because of their commitments elsewhere," the ONGC executive said. "This could delay our deepwater exploration plans somewhat," he added.

The rigs, also known as floaters, can drill in depths of more than 1,000 meters. There is an acute shortage of such rigs worldwide, and apart from the spiraling costs of charter rates, most of the rigs are overbooked.

As of March 1, ONGC owned nine of the 25 offshore drilling rigs it operated, The Hindu Business Line reported. In addition, 70 ONGC-owned drilling rigs have been deployed in onshore areas, leaving it without any spare rig.

ONGC, India's largest oil and gas producer by volume, is also the country's largest company by market capitalization.

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