Aban in race for ONGC marginal field FPSO contract

Vol 15, PW 14 (26 Jan 12) Exploration & Production

Aban Offshore has won a minor victory by being allowed to bid in ONGC’s tender to hire a Floating Production Storage and Offloading Vessel (FPSO) for its Cluster 7 marginal fields offshore Mumbai.

PETROWATCH learns ONGC – finally (!) - sent out clarifications last month (December) to companies that attended its November 18 pre-bid at the Mumbai Cricket Association club house in Mumbai. ONGC agreed to club together Aban’s experience operating Floating Production Unit (FPU) Tahara and Floating Storage & Offloading (FSO) unit Endeavour at the Hardy-operated PY-3 field offshore Chennai.

ONGC also agreed to postpone the bid submission deadline from December 30 to January 31, acknowledging it had sent out the pre-bid clarifications late. But otherwise ONGC budged little from its strict tender terms, despite loud protests at the pre-bid and accusations that it was restricting competition.

One likely bidder complains ONGC has made its tender terms even stricter. For instance ONGC originally said ‘technical collaborators’ of otherwise unqualified bidders should submit a ‘performance bank guarantee’ equal to 5% of the annual contract value.

At the pre-bid, several companies asked for this to be scrapped. ONGC now demands separate ‘performance bank guarantees’ from both the main bidder and each technical collaborator and each must equal 10% of the annual contract value.

You would think many companies would be interested in the ‘firm’ nine-year contract on offer from ONGC. But besides Aban, only Bumi Armada, Mercator and Tanker Pacific are expected to bid, even though a dozen companies attended the pre-bid and 31 bought tender documents.

Likely bidders also criticise ONGC for insisting on five years of FPSO experience. “The global FPSO boom began only around 2008,” we hear.

“Hardly any company has five years experience.”

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