ONGC ready to scrap CBM farm-out plan

Vol 16, PW 12 (10 Jan 13) Exploration & Production
     

Controversy over a late bid by Great Eastern might force ONGC to cancel its tender to farm-out 35% at the Jharia, Bokaro, North Karanpura and Raniganj North CBM blocks.

ONGC received bids from four companies on December 21: UK-listed Great Eastern, Brisbane-headquartered Dart Energy, Ahmedabad-based Deep Industries and Gurgaon-based Jindal Steel and Power. Companies were meant to submit bids by 3pm.

“But Great Eastern’s bid was late by 45-minutes,” says a source at a company that participated. “My representative who went to ONGC to submit our bid told me this.

” Dart and Jindal, he adds, have called for ONGC to reject Great Eastern’s bid. An ONGC source confirms it received Great Eastern’s bid after 3pm on December 21.

“Our management must decide if we can accept Great Eastern’s bid or not,” he says. Great Eastern insists it violated no rules.

“Our bid is valid,” says a Great Eastern source. “We complied with the tender and believe ONGC is evaluating our bid.

Some company is playing a dirty political game against us. Do you think ONGC would accept our bid if it was illegal” Yet ONGC’s exploration department is growing nervous and wants to cancel the tender to avoid future corruption charges, a move which could delay its farm-out plans at the four CBM blocks by another year.

ONGC invited EoIs from 19 companies last November but surprisingly received only four bids by December 21. Some believe companies stayed away because ONGC is asking for a high share of past costs and a large chunk of gas revenues.

When scoring bids, ONGC will give 50 points for technical criteria and 50 points for financial criteria.

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