EPC: Swiber's shock quote for PRP-IV work

Vol 18, PW 15 (26 Mar 15) Exploration & Production

Is Swiber so desperate for work?! That's the heated question everyone is asking following the Singapore-based EPC contractor's unprecedented low quote in ONGC’s long-pending EPC tender for the offshore Mumbai Pipeline Replacement Project-IV (PRP-IV).

When ONGC opened price bids at 10:15pm on March 16 it discovered Swiber bid lowest, quoting just $361.67m, around $118m lower than ONGC's own internal $480.52m estimate. AFCONS followed far behind at $562.85m, IGOPL Offshore with TL Offshore at $583.27m and finally L&T at $632.73m.

ONGC re-evaluated prices the next day after dropping two segments. Swiber was still lowest bidder at $332.61m; AFCONS was next with $524.85m; followed by IGOPL at $544.27m and L&T at $592.73m.

ONGC issued the NoA to Swiber on March 17. “Did Swiber make a mistake?” wonders a source.

“Or are they so desperate for work that they are willing to make losses?” When contacted a Swiber source insists it quoted the right price. “We have our own barges and yards and other assets to execute this project,” he explains.

“So we can offer the best price.” Price bids from Essar Offshore, bidding alone, and UAE-based Valentine Maritime, bidding with Mumbai-based Supreme Offshore, were not opened.

A source reports both withdrew from the race citing inability to meet ONGC’s completion schedule - but this could not be independently confirmed.