Oil firms struggle for rigs as crude spike sparks shortage

Companies world over try to cash in on higher crude prices, leading to an acute scarcity

- Rituraj Baruah

Indian oil firms are facing a massive shortage of rigs amid a global rush sparked by rising oil prices, potentially upsetting their upstream exploration plans.

State-run exploration and production companies are finding it difficult to hire offshore rigs, with global and West Asian oil companies having tied up a large number of them. A similar shortage has also hit onshore rigs.

The spike in global oil prices has prompted oil companies the world over to dig deeper in existing oil fields and try and locate new fields, which has caused the big demand for rigs.

However, the availability of rigs that are suited to India’s shallow waters are in the single digits. They are expensive too, with a 3,000 horse power rig costing around ₹350 crore apiece.

A good case in point is Oil India Ltd. With its latest tender for onshore rigs finding no takers, the company is planning to float a fresh tender for chartering new rigs and is also looking at purchasing rigs.