Newsco trouble after losing to Schlumberger

Vol 16, PW 21 (16 May 13) Exploration & Production
     

Canadian driller Newsco International is reeling after the loss of two prestigious Oil India contracts in Assam to Schlumberger amid claims sensitive price information was leaked from within the company.

In February Oil India issued a Letter of Award (LoA) to Schlumberger for an 18-month directional drilling contract after it submitted a knock-out $9m bid for the estimated $20m contract for LWD and MWD (logging while drilling and measurement while drilling) tools in Assam. Newsco - which held the contract before Oil India re-tendered in May 2011 - bid $11m; Halliburton bid $13m; and Baker Hughes bid $18m.

Weatherford, disqualified on technical grounds, was expected to bid $20m. Speaking to this report, Newsco chief Kuntal Kar strongly denies Newsco lost the contract because of a price leak.

“Schlumberger has been bidding aggressively for the past six to eight months,” Kar tells us. “Everybody in the market knows this.

It has nothing to do with someone leaking our price to them.” In a second tender published in June last year (2012), Schlumberger again bid lowest, quoting $11.9m for a three-year contract, while Newsco bid $12.7m.

“No one expected Schlumberger to win,” we hear. “Newsco has a reputation for bidding lowest so it was a very big surprise to see Schlumberger bid even lower.

” As with the first contract, this one too was earlier held by Newsco. Schlumberger, says a source, is expected to receive a LoA from Oil India next month (June).

“Newsco has always cornered Oil India directional drilling contracts,” adds our source. “These were the company’s two main contracts with Oil India.