India loses out to Latin America, Africa in setting up oil rigs

Drilling rigs operating in India's offshore areas have seen a sharp fall in March this year, coming down to 25 from 31 a year earlier, even as the country plans to intensify exploration of oil and gas to fuel at fast-growing economy.

The 31 rigs were operating in India's offshore areas till February this year, making the country the largest offshore rig user in the world after the US, where 56 rigs are operating. Countries such as Brazil and

Mexico have now overtaken India.

The fall in rig count has also been recorded in Chinese offshore areas, where the number of rigs operating have come down to 16 in March 2008 from 18 in March 2007, showed data compiled by US oilfield services company Baker Hughes that are available on the company's website.

Meanwhile, countries in Africa and Latin America have managed to raise their rig count, the Baker Hughes data showed. Brazil's rig count rose to 26 in March compared with 13 a year earlier, while Angola doubled its offshore rigs to 4. Saudi Arabia also had 13 rigs operating in offshore areas compared with 7 a year ago.

Countries across the world are stepping up drilling in offshore areas as most companies believe that easily accessible oil and gas in onshore areas has been found. Companies are now going into deeper waters in offshore areas to find oil and gas that will feed energy hungry economies around the world.

However, this rush to find more oil and gas has resulted in a global shortage of rigs, a Delhi-based analyst said.

The rig shortage has also resulted in India delaying its seventh round of auction of oil and gas blocks under the New Exploration and Licensing Policy (Nelp VII), as operators of blocks won under previous Nelp rounds have not yet been able to complete their drilling programmes.

"Three of our offshore rigs have been taken off for repairs. We are looking for new offshore rigs but tight supply around the world is slowing down our deepwater exploration and development work," said a senior official with Oil and Natural Gas Corporation (ONGC), India's largest oil and gas exploration company.

The company has had to put off exploration activity in its recently discovered deepwater gas block in the east coast off Andhra Pradesh. It has been able to drill only one well in the block, but not been able to develop it due to the absence of a drilling rig.

"We will get a rig for that block only in September 2009. Till then we cannot go into that block," said the ONGC official.

Two other offshore rigs, Deepwater Expedition and Actinia, hired by Reliance Industries have also been sent for repairs.