Poor response to latest ONGC tender for 3D

Vol 8, PW 16 (03 Nov 04) Exploration & Production

ONGCs latest tender to shoot 3D seismic across 13, 044-sq km off Indias east coast has met with a poor response.

On 26th October, only five out of eight invited companies turned up for a pre-bid meeting in Mumbai: CGG, Veritas, PGS, WesternGeco and Multiwave Geophysical. After initial inquiries, representatives of the five companies got down to business.

MB Singh, ONGCs head of geophysical services, chaired the meeting with other officials from ONGCs western offshore basin. Potential bidders had a common demand: scrap the Liquidated Damages (LD) clause from the tender.

ONGC rules allow it to levy LD charges of 5% of the total contract amount for an incomplete job. LD is levied for every extension till the company completes 90% of its contracted survey.

This is absurd, one company tells this report. There is no LD if I have finished 95% of the survey but I am penalised if it is 90% complete.

Instead, the companies want ONGC to exercise an option: the seismic firm will not charge extra for the mobilisation and demobilisation of any seismic shoot carried forward to the next season. But Singh refused to change the tender rules, saying they are non-negotiable.

ONGC wants this seismic job to be completed by June 2005. Another issue that dominated the meeting was the availability of vessels.

Almost all of us said that we dont have boats available for the job due to bad timing, said one participant. Veritas has won a big contract in the North Sea and plans to divert vessels there.

A common feeling is that PGS might win this tender. There is nobody else with spare boats, an ONGC source said.

ONGC has added one more block to the scope of work taking the total to 11 blocks. Of these, six are in the Mahanadi basin covering 8150-sq km and five are in the Cauvery basin.

Interested companies must submit their bids by 16th November.

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