ONGC Explores Drillship Acquisition and Joint Venture to Secure Offshore Capacity Under Mission Samudra Manthan

State-owned Oil and Natural Gas Corporation (ONGC) is exploring the acquisition of deepwater drillships or the formation of a joint venture to secure dedicated drilling capacity. The initiative is part of the company's efforts to accelerate offshore exploration for oil and gas reserves under the Mission Samudra Manthan programme.

To facilitate this, ONGC has issued an Expression of Interest (EOI) to engage a specialist global offshore rig-broking consultant. The consultant will help identify potential drillship owners or counterparties, assess assets and valuations, and support the state explorer in negotiating a possible ownership or joint venture arrangement.

The initiative is aimed at creating dedicated, priority-access deepwater drillship capacity. According to the EOI issued by ONGC, the company is undertaking a structured capacity-creation programme to secure this capacity in support of Mission Samudra Manthan, exploring possibilities of an ownership or joint venture model for drillship acquisition.

The Union Cabinet recently approved Samudra Manthan, the National Offshore Exploration Scheme, with an outlay of Rs 84,084 crore through 2030-31. The central-sector scheme aims to accelerate the exploration of India's offshore oil and gas resources, particularly in deepwater and ultra-deepwater areas, to boost domestic production and reduce import dependence. Under the scheme, the government will provide financial support of up to 50 per cent of the cost of deepwater exploration wells, subject to a cap of Rs 675 crore per well. The programme includes drilling 60 deepwater exploration wells, large-scale seismic surveys, common offshore production and evacuation infrastructure development, and the creation of an Oil and Gas Manufacturing and Services Zone.

Because India currently lacks the manufacturing capability to build deepwater drillships, explorers depend on foreign-owned rigs typically secured through time-charter arrangements. The proposed consultant will assist ONGC in identifying suitable global drillship owners and contractors, undertaking commercial benchmarking and technical due diligence, and negotiating a deal.

The assignment is structured in two phases. The first phase, expected to run for three months, involves identifying, screening, and shortlisting potential counterparties and establishing an indicative commercial basis for ONGC. The second phase, running for up to six months, covers ownership or JV negotiation support, documentation, financing coordination, and transaction closure, including bringing the rig into India.

The consultant's mandate includes benchmarking drillship day rates and sale-and-purchase or JV valuations against recent global transactions, coordinating technical due diligence, and leading negotiations for a non-binding indicative term sheet covering equity split, governance, charter economics, and an indicative sail-in timeline.

For the potential transaction, ONGC is also examining the structuring of a GIFT City special purpose vehicle (SPV) and assessing an equity-debt funding mix, including an external commercial borrowing route. The EOI seeks market intelligence on drillship owners and contractors with deepwater assets or newbuild capacity, including fleet specifications, financial standing, and appetite for joint ventures, with a specific focus on floaters rated for water depths of 1,500 metres or more.

"ONGC's initiative to secure dedicated deepwater drillship capacity through ownership or joint ventures highlights a strategic shift toward long-term asset control in India's energy sector. Backed by the National Offshore Exploration Scheme, this structured approach reduces reliance on foreign time-charters and addresses critical infrastructure gaps in deepwater exploration. Structuring transactions through financial frameworks like GIFT City further demonstrates a pragmatic approach to capital allocation and global sourcing." — Dr. Shishir Gupta, Founder & CEO, StartupLanes