ONGC in shale war with Schlumberger

Vol 17, PW 26 (14 Aug 14) News in Brief

ONGC is accusing Schlumberger of ‘gross negligence’ in a sharp escalation of its dispute with the oilfield services giant over the Rs229cr ($38m) cost of a four-well shale gas drilling pilot programme in 2012.

ONGC’s verbal assault was delivered on July 16 to a three-man arbitration panel of former Supreme Court judges Deepak Verma (Schlumberger’s choice) SB Sinha (ONGC’s choice) and RC Lahoti (neutral). “This is the first time ONGC has made such a serious accusation,” says a source.

“Until now it said only that Schlumberger was inefficient and delayed rig mobilisation.” Schlumberger launched arbitration in 2013 claiming Rs57.2cr ($9.5m) that ONGC is withholding in punishment for an alleged 229-day project overrun.

In turn ONGC launched an Rs216cr ($36m) counter-suit arguing Schlumberger’s pilot programme was a dismal failure - a charge Schlumberger vigorously denies, saying it managed to ‘flare’ gas from one well. Two shale wells were drilled in Bokaro and two in the Damodar Valley.

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