Jindal Drilling sees increase in rig demand due to oil rate

Jindal Drilling has been planning to add another rig to the five rigs they have. The company has seen a couple or good days of trading as well.

DP Jindal, Chairman of Jindal Drilling, in an interview with CNBC-TV18’s Latha Venkatesh and Gautam Broker, said that reason for them buying a rig is because the rig demand has been going up for exploration and production along with the oil prices.

Jindal further said, “Out of our five rigs, four rigs are for long-term contract of three-five years and one rig is de-hiring in October which is tendered for the new contract. We are expecting around 20-25% reduction in the price. We would go for a new jack-up which would take two and two-and-a-half years for delivery.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: How is the business shaping up? There was news that you might be looking to buy one more rig. What are the long-term and short-term contracts for the five rigs that you already have?

A: Global oil market is going up. As the oil prices are getting high, the rig demand is also going up for exploration as well as production.

Q: You have renewal coming up with ONGC. Are day rates likely to be better than what you had earlier contracted? What is the situation looking like right now?

A: There is a price pressure on rigs because new rigs are being built up. During the renewal, there will be a pressure on the price. There will also be a lot of competition.

Q: What percentage fall are you expecting in the rates?

A: Out of our five rigs, four rigs are for long-term contract of three-five years and one rig is de-hiring in October which we are tendering for the new contract. We are expecting around 20-25% reduction in the price.

Q: On buying further additional rig, what kind of rigs are you looking at like jack-up rigs or deep drillers? What is on your radar right now?

A: We would go for a new jack-up rig. If we place the order now, it might take two to two-and-a-half years for the delivery.
source-http://www.moneycontrol.com/news/business/jindaldrillingseesincreaseinrigdemandduetooilrate_557549.html

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