CGG does it again in another ONGC tender for 3D

Vol 16, PW 4 (06 Sep 12) Exploration & Production

As with the above tender, sore losers accuse CGG of quoting senseless low rates to kill the competition in a separate ONGC tender to shoot 3D on the east coast.

ONGC opened bids on August 14 in Mumbai in a tender to shoot 11,443-sq km 3D across two deepwater blocks in the KG basin, three in the Mahanadi basin, and four offshore the Andaman Islands. For the KG and Mahanadi blocks, CGG quoted $46m to shoot 5643-sq km 3D, nearly half the $77.25m quoted by second ranked Polarcus.

WesternGeco followed with $84.6m and Fugro quoted $97.5m. For the Andaman blocks, CGG bid $41.2m to shoot 5800-sq km 3D, again much lower than WesternGeco with $67.9m and Fugro with $70m.

ONGC has yet to issue a LoA. “CGG bid 70% lower than market rates,” complains a defeated rival.

“To leave so much money on the table is foolish!” Another unsuccessful bidder criticises CGG for quoting rates similar to those it offered to ONGC two years ago when the market was low. A source close to CGG dismisses such accusations.

“CGG quoted market rates,” he insists. “If others disagree, their calculations are different.

” He points out CGG’s quotes are based on eight-streamer vessels whereas rivals quoted for 14-streamer vessels. “Rates for those are naturally higher,” we hear.

More, CGG’s quotes are only 10% lower than ONGC’s internal estimates. “ONGC is upset with the rates quoted by other bidders,” adds a source.

CGG, with its 22-vessel fleet, can also benefit from ‘economies of scale’ and has offered ONGC any two of the following six vessels for the assignment to be completed by next May: Viking-II, Viking Vision, Symphony, Amadeus, Geowave Voyager and Oceanic Champion.