Sagar Uday will be delayed beyond April 2012

Vol 15, PW 9 (03 Nov 11) Exploration & Production

Larsen & Toubro thought it would be easy to refurbish ONGC’s 25-year old jack-up Sagar Uday.

But it was forced to think again when it began dismantling the rig. “L&T has discovered a lot of unexpected additional work,” says a source.

“It’s probably not going to deliver Sagar Uday by April 2012 as scheduled. I don’t have a new delivery schedule.

” ONGC awarded the Rs376.91cr ($84.5m) refurbishment contract in the last quarter of 2010, he adds, but L&T received the rig at its Sohar yard in Oman only in May 2011 after she completed a drilling programme offshore Mumbai. “ONGC must approve any additional work and any ‘spare’ parts needed for this,” we learn.

“L&T is constantly talking to ONGC to speed up the process.” Costs are not expected to rise dramatically but an observer believes the delivery schedule could be delayed by at least six months.

“L&T will have a long wait for spare parts for the additional, unexpected work,” he explains. “It also has its work cut out replacing a lot of steel, the ‘top drive,’ ‘derricks,’ engines and the ‘jacking-system.

’” L&T will not be penalised for the delay or additional costs as it could not have anticipated the extra work. “There is a provision for such a scenario in the contract,” we hear.

Built at Mumbai’s state-owned Mazagon Dock yard in 1990, Sagar Uday is a ‘Baker Marine’ design jack-up that can drill in 300-ft water depths (91 metres). This is L&T’s first jack-up rig refurbishment assignment for ONGC, won against competition from privately-owned Pipavav Shipyard and Bharati Shipyard, state-owned Cochin Shipyard, Dubai-based Lamprell and Singapore’s Keppel FELS.

ONGC floated the refurbishment tender in May 2009, accepted bids on November 19, 2009, and opened price bids on April 20, 2010.