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Sunday, 6 April 2008

Reliance plans rig building foray

Growing demand, coupled with acute shortage of rigs, has spurred the country’s major private oil & gas company Reliance Industries Limited (RIL) to invest in offshore services business including building rigs and supply vessels.

According to Atul Chandra, president of the company’s international business, “We are planning to get into rig manufacturing as well as offshore vessels to support our exploration business.” However, the final decision will be taken only next year, added Chandra.

At present, RIL has six deepwater rigs and faces an acute shortage of rigs. Sources also said that over the next year, the number of rigs should double. RIL is paying more than $4,00,000 a day until August 2008 to rent the deepwater rig, more than twice the rate it used to pay earlier. Chandra also mentioned that the company might go for joint venture or launch an SPV for the same.

According to sources, RIL is going to spend over $146 million per rig per year over the next two to three years. The initiative to build its own rig would give as much as 40% saving on its total cost in future, added sources.

Worldwide, the offshore rig market is currently witnessing an acute shortage of rigs. In last three years, the day rate for a 250-300 ft have jacked up, which was around $50,000 in 2004, and currently stands over $15,0000.

...E&P in LatAm likely

Mukesh Ambani promoted Reliance Industries Limited (RIL) is likely to invest in oil and gas exploration in Latin America. According to Atul Chandra, president of international operations, petroleum and E&P, RIL, “We are seeing two projects in Latin America and looking at a majority stake in one of them and will be the operator in at least one of them.” However, he did not disclose the particular country the company will invest in. Sources said that the company is chiefly looking into countries like Colombia and Brazil for the same. The discussions is going on and probably RIL would come up with a final decision within few months, added sources.

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