Welcome changes in ONGC terms for three rigs

Vol 16, PW 16 (07 Mar 13) Exploration & Production

ONGC has received a good response to its re-issued tender for three new generation independent leg 300-feet/350-feet cantilever jack-ups for five years.

Nineteen tender documents were sold between February 12 and February 26, we hear. ONGC originally issued this tender last year to re-hire or replace Jindal Drilling’s Virtue-1 and hire one more new generation rig - but it now wants three rigs.

Bids must be in by March 26. ONGC sent clarifications to bidders on February 12, conceding some of the key demands raised at the January 18 pre-bid in Mumbai.

For instance, a new build rig can now be mobilised within 730 days of ONGC’s firm order, or by May 15, 2015, whichever is earlier, against 540 days in the BEC (Bid Evaluation Criteria) demanded before. “This is a welcome change,” says a prospective bidder.

Yet ONGC stresses that after the new build rig leaves the shipyard her first assignment should be with ONGC, nobody else. "ONGC wants to prevent drillers taking short contracts before May 15, 2015 if their new build rigs are delivered earlier,” explains a source.

Another key concession concerns payments for rig audits. Previously ONGC paid auditors charges for the first 20 days and drillers paid the rest if the audit extended beyond 20 days.

ONGC has now agreed to pay these charges entirely. But bidders are unhappy about ONGC's new condition that it will not make additional payments to drillers who offer rigs with a capacity higher than required by the tender.

ONGC should be ready to pay around $128,000/day plus service tax for each rig in this tender.