Disbelief as INTECSEA wins 98/2 mandate

Vol 17, PW 25 (31 Jul 14) Exploration & Production
     

Many wonder how WorleyParsons subsidiary INTECSEA plans to make money on a job won to prepare a concept plan for ONGC’s block KG-DWN-98/2.

ONGC confirms it hired INTECSEA Malaysia on July 17 to prepare the plan to develop the Northern Discovery Area (NDA) at the eastern offshore block for the bargain price of $1.2m (Rs7.2cr). Was ONGC right to hire a company that bid so low “INTECSEA quoted a very low rate," says a source.

"ONGC estimated this project would cost $4m and should have been cautious when they saw such a low bid.” INTECSEA has seven months to submit the concept plan for 10 oil and gas discoveries in water depths of 400 to 2000 metres.

When ONGC opened price bids on July 3 Wood Group Kenny was second lowest bidder quoting $3.9m while Aker Solutions bid $5.3m. Bids were also submitted on March 15 by Pegasus International, KBR subsidiary Granherne and UK-based Xodus, which failed to meet bid terms.

ONGC wants to begin development drilling at NDA from 2016 so production can begin from 2018. This development project is estimated to cost $5bn to $6bn.

"INTECSEA's concept plan must set out the number of wells to be drilled," adds our ONGC source. ONGC, with a 90% stake shares KG-DWN-98/2 with Cairn India (10%).

LNG Summit