India's state-controlled Oil & Natural Gas Corporation (ONGC) has cancelled a major international tender to charter at least four specialised offshore drilling rigs and has swiftly relaunched a new, modified tender process. This decision is part of ONGC's strategy to secure long-term rig charters at lower costs, a critical consideration given its role in producing nearly three-quarters of India's domestic crude oil and its substantial spending on exploration and development.

Tender Cancellation and Rationale

The cancelled tender, launched last year, sought four cantilever-type jack-up rigs capable of operating in water depths up to 300 feet for five-year terms. Despite the process advancing with several drilling players as frontrunners by February, ONGC terminated it. Sources indicate the cancellation was driven by ONGC's desire to secure more favorable day-rates, as the long-term contracts carry significant financial implications. Although the lowest bids received were between $55,000 and $56,000 per day—a marked improvement over previous tenders—ONGC believed there was scope for further reduction before finalizing a long-term charter. Industry sources described ONGC's rig tendering as a "complicated bidding" exercise, noting the company has cancelled several tenders in recent years in pursuit of lower prices.

New Tender Specifications

Shortly after the cancellation, ONGC issued a new tender with altered requirements. The new solicitation seeks two or more cantilever-type, self-elevating jack-up rigs for three-year charter terms, capable of year-round operation in the weather conditions off India's west and east coasts. Bids are due on 4 May. Sources added that while the minimum requirement is for two rigs, ONGC could charter additional units if the pricing is sufficiently attractive.

Bidding Evaluation and Recent Contracts

ONGC has shifted its evaluation criteria, no longer automatically awarding contracts to the lowest bidder (L1 model). Instead, it now assesses contenders based on a combination of technical and commercial parameters, though pricing remains a key factor. This change follows last year's awards for four jack-up rigs, which were won by several domestic contractors and Middle East-based Shelf Drilling. For instance, Shelf Drilling secured a three-year, $40 million contract for the jack-up rig JT Angel for operations at Mumbai High starting in July 2025.