BOATS: Lock in 5-year deals while crude low

Vol 18, PW 15 (26 Mar 15) Exploration & Production

Next week ONGC is expecting a flood of bids in a tender to hire 20 offshore vessels for five years - one of the largest boat tenders around.

ONGC originally wanted bids by March 3 but extended this first to March 16 and then again to March 30, “in response to bidder requests.” An industry source says there will be a tremendous response.

“There are hardly any vessel tenders like this anywhere (due to low global oil prices),” he says. “Everybody will bid.

” Attractive five-year contracts, unlike ONGC’s previous three-year contracts, are another draw. “ONGC last offered five-year contracts for vessels in 2007 (when the oil price was $60/barrel),” says a potential bidder.

In this tender, issued on February 12, ONGC wants two 150-tonne anchor handling tug-cum-supply (AHTS) vessels, two 120-tonne AHTS, two 80-tonne AHTS, two 3000-tonne platform supply vessels (PSVs) and 12 offshore supply vessels (OSVs) of 1500 tonnes each, all mobilised within 45 days of the LoI. Eight of the 20 vessels will be re-hires of three-year contracts ending this year.

“ONGC thinks it can get good prices and lock them in for five years,” says a source. From India GOL Offshore, Greatship, TAG Offshore, Global Offshore, Shipping Corporation of India, and Raj Shipping are expected to bid and from overseas expect Tidewater, Bourbon Offshore, EMAS and Bumi Armada.