Only Indian drillers can win ONGC rig tender

Vol 16, PW 14 (07 Feb 13) Exploration & Production

US-based Transocean and Japan Drilling are in the race but stand no chance against Indian bidders in ONGC's tender to hire two new generation jack-ups.

ONGC wants to re-hire or replace Jindal Drilling’s jack-up Virtue 1 and also needs one more rig. Both must be cantilever type and equipped to drill in water depths of 300 to 350 feet.

Jindal should bid an attractive rate as it will save on mobilisation charges. Other Indian bidders Deepwater Drilling, Aban Offshore, Jagson Drilling and Kakinada Marine & Offshore are also likely to bid aggressively.

Foreign companies will find it hard to compete as Indian companies get a 10% price preference in line with government rules. For now bidders are waiting for clarifications on key issues raised during the January 18 pre-bid in Mumbai.

Most importantly, bidders asked ONGC to extend the mobilisation period from its standard 18 months for under-construction rigs to between 22 months and 26 months. "Usually it takes two years to construct a rig," explains a likely bidder.

"Then you need time to mobilise it to Indian waters after sea trials.” Another bidder adds ONGC seems to be seriously considering raising the mobilisation period to 24 months.

"But we have yet to receive any formal communication," he says. Meanwhile, ONGC categorically turned down Transocean's request to be allowed to submit just a MoU with a shipyard for an under-construction rig instead of a formal agreement.

Transocean felt there was no point going for a formal agreement unless it was certain of winning a contract. On the bright side, ONGC e-mailed companies on February 2 to say it was extending the bid deadline from February 7 to February 28.