LONDON (Alliance News) - Greka Drilling Ltd Monday said it has strengthened its relationship with multinational energy firm Essar Oil in India after securing a year-long contract worth around USD8.0 million.
Greka had been drilling wells in India on behalf of Essar under a recently ended agreement since late 2013, with Greka drilling a total of 16 wells on Essar's Raniganj East block. Greka has previously said it was looking to extend its relationship with Essar, which is the company's second biggest customer behind fellow London-listed Green Dragon Gas Ltd.
Under the new contract with Essar, Greka will supply two high quality semi-automated GD75 rigs for a period of one year, which will be used to drill vertical and directional wells. Greka will be paid on a day-rate basis compared to its previous contracts where Greka was paid dependent on how many metres were drilled.
Greka said the rigs that will be supplied are already situated in India, with the one-year contract worth around USD8.0 million to the company.
The commencement of drilling operations remains subject to the completion of pre-mobilisation requirements which are currently expected to be complete by end of this quarter, said Greka.
"While we still expect relatively limited activity in the first half of 2016, we welcome the prospect of new drilling for Essar and further drilling for Green Dragon Gas during the course of the year. In China, 17 LiFaBriC wells remain to be drilled from last year's order for Green Dragon Gas, although the timing of drilling will depend on customer mobilisation instructions," said Chairman Randeep Grewal.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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