ONGC under fire for Alphageo seismic awards

Vol 19, PW 20 (16 Jun 16) Exploration & Production

Putting all your eggs in one basket is never a good idea.

But ONGC critics say this is exactly what it has done by awarding seven of 11 sectors in its tender to shoot 40,835-lkm 2D to Hyderabad-based Alphageo. LoAs were also dispatched on June 6 to Advent Oilfield and Gazprom-affiliate Sibneft in the tender where bids were submitted in September 2015.

One source wonders if Alphageo has taken on more than it can handle: it is already shooting 2010-sq km 3D for ONGC in the Vygreswaram area of Andhra Pradesh and also has a 2360-lkm 2D job from Oil India in unexplored areas of Assam and Arunachal Pradesh. "I heard Alphageo quoted less than Rs20,000/lkm ($300) for the (40,835-lkm) job," speculates a source.

"The costing should definitely be more than Rs30,000/lkm ($450)." Alphageo supporters dismiss such claims saying its "good work" speaks for itself. "Till date Alphageo has delivered all its projects on time and within budget," says a well-wisher.

"How they manage costs is their problem. The end result is there for everyone to see." Alphageo told the BSE on June 7 that ONGC has awarded it the Rs1482cr ($222m) contract to shoot 2D in seven sectors: Cambay; Rajasthan and Kutch; Andaman; North Deccan; South Deccan; Madhya Pradesh and Jharkhand; and the Himalayas.

Alphageo's share price shot up from Rs660.80 ($9.90) on June 7 to Rs827.90 ($12.41) on June 9.