Seven in race for $215m ONGC vessel tender

Vol 17, PW 6 (17 Oct 13) Exploration & Production

Seven companies will battle it out for ONGC’s estimated $215m tender to construct an offshore well stimulation vessel, which it has re-issued to avoid allegations of favouring Netherland's IHC Offshore & Marine.

ONGC has pre-qualified 15 companies but only seven are serious contenders: IHC, Hyundai, STX Offshore, Sembawang Shipyard, Keppel FELS, Drydocks World and Chantier Davie. All are expected to attend the pre-bid in Mumbai on November 11.

Other companies who downloaded tender document by ONGC's extended September 30 deadline include Schlumberger, Baker Hughes, ABG Shipyard, Pipavav Defence and Offshore and two Chinese shipyards. ONGC’s minimum qualifying criteria state the shipyard should have built at least three vessels with Dynamic Positioning-2 capability in the last 10 years.

“We also want the shipyard to have the technical capability to integrate (install and set up) stimulation equipment onboard the vessel,” says ONGC. Yards without this experience, either on their own or through a partnership with a service provider, stand no chance.

In the December 2011 tender IHC was sole valid bidder, quoting $250m when price bids were opened last year (2012), even though ONGC’s internal estimate was for only $150m. ONGC then negotiated IHC's price down to $244m and was all set to award the contract.

But on June 10 this year ONGC decided to issue a fresh tender after uncomfortable questions from independent board directors over the deal’s value for money. ONGC has increased its project cost estimate to $215m.