Angry drillers reject ONGC 'convenience' clause

Vol 19, PW 23 (28 Jul 16) People & Policy
     

Angry drillers are furious over an ONGC move to introduce a controversial clause in its offshore rig contracts allowing termination after 12 months.

Happily it seems ONGC chairman DK Sarraf is taking their concerns seriously. Sarraf met contractors on July 25 at his office in Delhi and listened patiently to their principal complaint: that if ONGC includes the 'convenience' clause this would be tantamount to treating all contracts as if they are valid for one year only.

"The risk of early contract termination will be loaded onto the price," says an industry source. "No bank will finance a rig for short-term contracts." Among drillers at the meeting, which began at 10.30am, were Aban Offshore, Greatship India, Great Offshore, Dynamic Drilling and Transocean.

Shashi Shanker, director technical and field services and TK Sengupta, director offshore, were also present, as were representatives from the Indian chapter of the International Association of Drilling Contractors. "The meeting went well," says a driller.

"It was organised properly. Name cards of all representatives present were placed around the table.

Sarraf shook hands with everyone. ONGC was told rig hire contracts should be consistent.

 They should not keep adding clauses at will." Sarraf listened patiently for more than two hours and promised to look into the matter.