Fugro in price talks with ONGC for 98/2 survey

Vol 19, PW 20 (16 Jun 16) Exploration & Production

After dismissing favouritism allegations ONGC will soon begin negotiating with Fugro Survey India to get a lower price for a geotechnical survey to prepare for the Cluster 2 field development at KG-DWN-98/2.

Last month [May] ONGC's Independent External Monitors rejected accusations by Coastal Marine Construction and Engineering (COMACOE) that the specifications and scope of work were "tailor-made" for sole valid bidder Fugro. When ONGC opened the price bid on May 28 it found Fugro quoted around $30m.

Industry sources say ONGC has budgeted $19m so it will try to bring Fugro's quote down as much as possible. "There is a huge difference (between Fugro's quote and ONGC's budget)," says a source.

"I doubt Fugro will come down so much. At most they will come down 10% or so." A geotechnical survey involves studying soil conditions, water depths, and any obstructions that might prevent construction.

Observers say it makes sense for ONGC to keep Fugro as the company had carried out a geophysical survey in April 2015 that involves the detection of electric and magnetic fields similar to a seismic survey. ONGC wants the geotechnical survey to cover a 1040-sq km area with water depths between 300 and 1500 metres where it wants to install a process platform, moor a FPSO and lay PLEMs (Pipeline End Manifolds) on the seabed.

Expect the geotechnical survey to take 100 to 120 days.