US sanctions cloud Sagar Ratna refit at UAE shipyard

Vol 9, PW 8 (28 Jul 05) Exploration & Production

Only two Middle East shipyards responded to ONGCs tender to select a dry dock for Sagar Ratna: MIS Shipyard Sharjah and Arab Shipyard Bahrain.

Both shipyards sent representatives to ONGCs pre-bid conference in Mumbai some weeks back. Significant issues were discussed during the meeting the most important relating to potential problems over US sanctions against Iran: most of the drilling equipment on Sagar Ratna was supplied by either US companies National Oilwell and Varco.

Both companies refused to even quote for spares since US laws prohibit them from doing any business with Iran, directly or indirectly, leaving ONGC no choice but to offer spares from its own inventory. Then there were unresolved differences between ONGC and the shipyards.

ONGC wanted bids within 15 days of it clarifying all issues and Sagar Ratna ready for mobilisation in Iran within 45 days from receipt of the Letter of Intent. Both shipyards asked for three weeks from the date of clarification to submit bids and at least 90 days from LOI for mobilisation.

How can we say what kind of refit needs to be done unless we open the rig, reveals a source. The rig is 23 years old and has never been dry docked.

It seems ONGC officials agreed to give three weeks time to submit bids and 60 days for mobilisation from the date of LOI. ONGCs executive purchase committee was asked for its approval at a meeting in Mumbai last week.

But a decision was postponed, raising doubts if ONGC is under political pressure to go slow on Iran or if plans to send Great Easterns Kedarnath have been revived. A senior ONGC source clarified that there is no change in plans to deploy Sagar Ratna.

Because of the dry docking Sagar Ratna will be delayed and we want OVL to check with the Iranians if they have any problems with that. (Back)