Great Offshore had awarded the order for the rig to Bharati Shipyard and had contracted it to ONGC at a daily rate of around INR7.3 million.
“This is as per the terms of contract,” an ONGC spokesperson said. Industry insiders said the ONGC had entered into the contract when the demand for rigs was at high. Now that the demand has decreased, ONGC has held the opportunity to terminate the contract as it can get rigs at a much cheaper rate in the present market.
“It is a temporary setback for both Bharati and Great Offshore as their fortunes are now tied together,” said Jehangir Adi Master, an analyst tracking the industry.
Great Offshore will now have to search for a new client for the rig after it is concluded, but it is impossible to get the high daily rate at which it had contracted with ONGC after a public auction.
