Deepwater Rig Costs Tripling In India - Rigzone

[hatrack]

Reliance Industries and Oil & Natural Gas are among Indian explorers that expect to pay more for deepwater rigs this year as shortages caused prices to triple in the world's second-biggest market for the rigs. "This is the tightest rig market I have seen in my entire career," U.N. Bose, a director at Oil & Natural Gas, who has spent 31 years in exploration, said in a telephone interview from New Delhi last Thursday.

A boom in exploration in India, the fourth-biggest Asian economy, has tripled rig usage over the past four years, adding to a global shortage and causing delays in tapping natural gas off the Indian east coast. Transocean, the world's largest offshore drilling company, may raise rig prices further after India completes the biggest auction of offshore blocks this month.

"Most of the rigs in Asia are off India," said Tony Regan, a consultant in Singapore at Nexant, a U.S. chemicals, oil and gas consultant. "The demand for rigs will continue in response to the new exploration rounds."

India intends to offer 55 exploration areas this month, and to announce a new round for more in March, V.K. Sibal, director general of hydrocarbons in India, said Dec. 20. Explorers have drilled less than half of the 218 wells agreed under exploration licenses awarded by the government since 2000, underscoring the need for more rigs. The area covered by the licenses is the size of Texas.

EDIT

http://www.rigzone.com/news/article.asp?a_id=39731

[phantom power]

1. more and more rigs, less and less oil.

[hatrack]

2. In 2002, there were about 145 rigs in the Gulf of Mexico - there are now fewer than 90

Further proof that when money talks, rigs walk - in this case, mostly to the Arabian Sea and the Persian Gulf.

[GliderGuider]

3. I just saw a shocking graph

I'm reading Heinberg's "The Oil Depletion Protocol". One of his graphs shows the investment on exploration versus the value of the discovered oil. In 2000, 8 billion dollars of investment found 12 billion dollars worth of oil. By 2003, the same 8 billion dollars worth of exploration found 3.5 billion dollars worth of oil. The trend appears to be accelerating. Say hello to the Red Queen.