Objections galore at ONGC pre-bid for three jack-ups

Vol 13, PW 3 (16 Jul 09) Exploration & Production
     

ONGC was greeted with a chorus of objections at a pre-bid meeting held in Mumbai on July 14 for the re-hire of three jack-ups for five years after this year’s monsoon in the Mumbai offshore.

Since the tender is for the re-hire of Pride Pennsylvania, Noble Ed Holt and Kedarnath – already drilling for ONGC in the western offshore - competitors were not expected to take it seriously. But a record 30 companies bought tender documents and 18 attended the pre-bid, among them Transocean, Saipem, Jagson, Hercules Offshore, Mercator, Noble, Rowan, Foresight, Essar Oilfields, Atwood Oceanics, Ensco, Jindal Drilling, Fortune Drilling, Great Offshore, Aban Offshore and Greatship.

PETROWATCH learns drillers were unanimous in objecting to the electronic tendering system introduced by ONGC. “Electronic tendering is impractical as it was almost impossible for us to access ONGC’s network,â€‌ says a driller.

“For several days we could neither download the tender documents nor make payments online to ONGC.â€‌ Complaints about poor satellite connectivity to its network forced ONGC to extend the sale of tender documents till July 6.

Further, the pre-bid itself was postponed twice, from July 5 to July 9. How did ONGC respond “ONGC said it would revert,â€‌ says a driller.

Another objection was to the â€کreverse auction’ system ONGC wants for this tender. In a â€کreverse auction’ the lowest price - but not the identity of the bidder - is made public and other bidders are invited to offer even lower.

Bidders point out that reverse auctions are fine for selling products but unworkable in a service industry like drilling. Transocean wanted ONGC to offer three-year contracts for jack-ups, not five years.

Transocean also wanted ONGC to opt for a rig plus allied services contract and not a rig-only contract as now. ONGC rejected both and questioned why Transocean wants five-year contracts for its deepwater rigs but not jack-ups.