Subsea 7 wins S2AB tender despite price

Vol 19, PW 7 (03 Dec 15) News in Brief

Subsea 7 received a LoA from ONGC on December 1 for the eastern offshore deepwater S2AB well tie-in tender.

A source says ONGC wants Subsea 7 to complete this assignment within 150 days of the LoA. Subsea 7 must arrange a Multipurpose Support Vessel for the well tie-in and is likely to hire a vessel from Bourbon Offshore.

During two rounds of negotiations on November 3 and 9, ONGC insisted on Subsea 7 reducing its quote of around Rs75cr ($12.5m) as it was found to be well above the internal estimate of around Rs62cr ($10m). As required by ONGC, Subsea 7 sent in a fresh offer on November 12 but did not budge from its original price.

“Subsea 7 probably felt it didn't need to lower its price as it was the sole valid bidder,” we hear. “Or maybe it wasn’t possible to lower the quote further, these days bidders work on thin margins.

" TL Offshore also bid by September 11 but was disqualified.