Oil cos seek 2-year moratorium on drilling

Mr Sastry Karra, Temporary Chairman of the newly-formed Association of Oil and Natural Gas Operators in India (AOGOIN), told Business Line that the operators (companies engaged in exploration and production of oil) were facing an immediate problem in respect of fulfilling work commitments.

"The three major issues facing us are personnel and resources constraints, non-availability of drilling and seismic rigs and several-fold increase in costs of drilling," Mr Karra said.

Under the production sharing contracts (PSCs) with the Directorate-General of Hydrocarbons, oil companies have commitments to do so many kilometres of seismic shooting and drill many number of wells.

All companies have been hit by the worldwide shortage of drilling rigs. Mr U.N. Bose, Director-Technical and Field Services, Oil and Natural Gas Corporation (ONGC), said that the company was trying to get around the problem by getting into longer term contracts with drilling service providers.

Rig charges have risen sharply, but more than the costs, rigs are just not available, Mr Bose said.

"We are tying up rigs for three years and are looking for longer term contracts," he said.

Attrition

On manpower shortage, Mr Bose said that attrition rates in ONGC had risen. "People are going out. Very easily people are getting attractive packages from countries such as Saudi Arabia," Mr Bose said, adding that ONGC was "somehow managing". The company had done "some term-based recruitment" inducting fresh hands.

Because of such problems, oil companies are finding it difficult to fulfil their contractual commitments, Mr Karra said.

The Association of Oil and Gas Operators in India was formed recently - its first meeting was held only a month ago. Its vision is "to work on behalf of India's upstream operators to promote responsible, environmentally sound and safe operations."

Most of the oil companies operating in India are its members. These include ONGC, Oil India Ltd, Reliance Industries , Niko Resources Ltd, Hardy Oil, Gujarat State Petroleum Corporation and Cairn Energy.

Taken from Business Line