ONGC accused of favouring Aban and Jagson

Vol 16, PW 24 (27 Jun 13) People & Policy

ONGC stands accused of favouring Aban Offshore and Jagson Drilling by hiring old rigs.

Allegations have been levelled by Sabir Ali, a MP from Bihar and member of the Parliamentary Standing Committee on Petroleum & Natural gas. Ali wrote to Prime Minister Manmohan Singh on June 3, demanding a probe into ONGC's drilling operations.

“ONGC is deploying obsolete rigs from favoured contractors,” he writes. “Current drilling operations by ONGC need a thorough probe to put an end to the public looting (sic).

" Ali points to ONGC's contracts with Aban for jack-up Aban-III and with Jagson for Deepsea Matdrill. “How can some rigs continue with ONGC for more than 35 years even if they are not technically advanced” adds Ali.

"Contractors push their old rigs onto ONGC because nobody else will hire them. This goes against international standards where rigs older than 20 years are not accepted.

” Jagson jack-up Matdrill was designed by Baker Marine Services and built by Nippon Kokan in Japan in 1981. Matdrill underwent refurbishment and drydock repairs in 2004.

Aban-III was designed and constructed by Marathon LeTourneau in 1974 and refurbished in 2003. Ali also accuses ONGC of not hiring equipment recommended by the American Petroleum Institute (API) or an Original Equipment Manufacturer (OEM).

This, he believes, compromises safety. When contacted, Aban dismisses Ali's allegations.

"We participated in a public tender for ONGC's contract,” says Aban. “How does age matter What matters is if our rig is fit and we keep modernising it.

Right now it is in Singapore for an upgrade.” Note: Jagson also defends ONGC's use of its rig.

"Agreed our rig is old," says Jagson. "But ONGC uses Matdrill because it has a ‘mat’ feature which is useful for shallow water blocks.

When we deploy the rig in shallow waters the mat opens and supports the rig to stand firmly.” ONGC says it uses a transparent system to hire rigs.

“We hire rigs through competitive bidding," says a source. "Whoever quotes less according to our specifications gets the order.

We inspect the rigs and if they are fit we hire them. Spending more money on new rigs makes no sense when old rigs are working fine.

” ONGC re-hired mat-supported rig Matdrill from Jagson for three years in 2011 at $43,000/day to work offshore Mumbai. On February 15, 2011, ONGC rehired Aban-III and Aban-IV from Aban at $156,600/day to work in the Mumbai offshore for three more years.