Fuel cloud hangs over Halliburton's ONGC award

Vol 20, PW 3 (20 Oct 16) People & Policy

As if it wasn't generating enough controversy, ONGC now faces criticism for failing to include a cap on fuel consumption by Anchor Handling Tug Supply (AHTS) vessels in a $224m integrated services contract awarded to Halliburton on October 6.

"Fuel can even be stolen since there is no cap on consumption," says a source. This report learns ONGC will have to spend millions of dollars on top of the contract value, with some alleging fuel costs could be an additional 20% or $45m.

Last week Halliburton hired two AHTS vessels: 21,456-bhp Lewek Teal and 17,600-bhp Lewek Trogon. Trogon will consume 15-20-kilolitres/day and Teal will consume at least 25-kilolitres/day so with fuel prices at $650/kilolitre, the fuel bill for these two vessels hired from Emas Marine could touch an additional $15m.

Halliburton has also hired 12,240-bhp Lewek Stork for a brief 21-day period until Teal is ready to mobilise. In total Halliburton plans to hire at least eight vessels to support five deepwater rigs for ONGC: three DP drillships and two anchor moored semis.

Many are also watching closely to see if Halliburton can mobilise a RSS directional drilling tool for ONGC within 45 days of the LoA or by November 20. Halliburton had originally contested ONGC's demand for a 4¾-inch tool to drill through a six-inch hole and instead offered a 5¼-inch tool.

Second-ranked Schlumberger was surprised when Halliburton's bid was accepted nonetheless and initially appealed to ONGC's independent external monitors before quietly dropping its protest.