ONGC Weighs Drillship Buyout Or JV To Boost Deepwater Exploration

State-run Oil and Natural Gas Corporation (ONGC) is looking at buying deepwater drillships or partnering with global rig owners through a joint venture as it seeks to secure dedicated drilling capacity for its offshore exploration plans under Mission Samudra Manthan.

The company has floated an Expression of Interest (EOI) to appoint a specialist offshore rig-broking consultant. The adviser will help ONGC identify potential drillship owners and contractors, evaluate available assets and their valuations, and support discussions around a possible acquisition or joint venture.

ONGC said the exercise is aimed at creating dedicated, priority-access deepwater drilling capacity for the exploration programme. The EOI does not specify how many drillships the company intends to acquire or the likely cost of the proposed transaction.

ONGC Plans Dedicated Deepwater Drilling Capacity

The move comes as ONGC prepares to step up exploration in deeper offshore areas, where drilling requires specialised rigs capable of operating in significant water depths.

Under its proposed plan, ONGC is seeking market intelligence on drillship owners and contractors, including fleet specifications, financial strength and their interest in potential partnerships. It has specifically sought information on deepwater-capable floating rigs rated for water depths of at least 1,500 metres.

The proposed consultant will also benchmark drillship day rates and asset valuations against comparable global transactions. Technical due diligence and negotiations with shortlisted counterparties will form part of the assignment.

ONGC is considering a two-phase process. The first phase, expected to last three months, will focus on identifying and shortlisting potential partners and establishing the commercial framework. The second phase could run for up to six months and cover negotiations, documentation, financing arrangements and transaction closure, including bringing the selected rig to India.

Mission Samudra Manthan Gets Major Push

The drillship initiative is linked to the government's National Offshore Exploration Scheme, Mission Samudra Manthan, which received Cabinet approval last month with an outlay of ₹84,084 crore through 2030-31.

The programme is intended to accelerate exploration of India's offshore oil and gas resources, particularly in deepwater and ultra-deepwater blocks. It includes plans for 60 deepwater exploration wells, extensive seismic surveys and common offshore production and evacuation infrastructure.

The government will provide financial assistance covering up to 50% of the cost of deepwater exploration wells, subject to a maximum of ₹675 crore per well. India currently lacks the manufacturing capability to build deepwater drillships, leaving oil and gas explorers dependent largely on foreign-owned rigs secured through charter arrangements.

For the potential transaction, ONGC is also examining the possibility of setting up a special purpose vehicle in GIFT City and using a combination of equity and debt financing, including external commercial borrowings.

The proposed ownership or JV structure would give ONGC greater control over access to deepwater drilling capacity. However, the company has not yet finalised the number, type or cost of drillships it may ultimately pursue.

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