ONGC kills Jagson contract and looks for new rig

Vol 17, PW 20 (22 May 14) Exploration & Production

Bad news for Delhi-based Jagson Drilling but good news for drillers hungry for an ONGC contract.

On May 7, ONGC terminated Jagson's three-year contract for rig Deepsea Treasure, after the company missed three mobilisation deadlines and sought another extension to October 31. ONGC also encashed Jagson's bank guarantee.

But Jagson executive director Pradeep Gupta remains defiant. "Our rig was ready to be mobilised before the (original) deadline," he says.

"But ONGC did not agree and terminated the contract. We have asked ONGC (to reverse the termination).

” Last November US-based certification agency ABS denied Deepsea Treasure a fit to tow certificate but Jagson brought her to India after certification from Singapore-based SingClass International, which ONGC refused to accept. As Jagson’s contract has been terminated, ONGC has sought top management approval to add this rig to its 11-rig tender – where the bid deadline is extended to May 30.

Separately, drillers Deepwater Drilling and Hallworthy Shipping were in luck as ONGC agreed to their requests to change crucial terms of the 11-rig tender. Both yards want the option to offer rigs built by yards that have not built and delivered a rig in the past 10 years but which are part of a group having other yards with such experience.

Agreeing to this change, ONGC modified clause A.10 of the bid criteria but said a certificate should be submitted from the parent company/group “establishing the relationship between the respective companies.