Cairn passes on Rajasthan gas risk to bidders

Vol 20, PW 22 (27 Jul 17) Exploration & Production

Anxious bidders for an estimated $300m worth of integrated development contracts to drill 111 wells in Rajasthan are worried by Cairn India's insistence they speculate on the quality of future gas.

Cairn is believed to have shortlisted Weatherford, Schlumberger, Halliburton and Baker Hughes for these three-year contracts at RJ-ON-90/1 but this could not be independently confirmed. By July 31 bids are due for 30 development wells which must be drilled, completed and fractured at the Bhagyam field; by August 7 for 39 wells at Aishwariya-Barmer; and by August 10 for 42 wells at the Raageshwari Deep gasfield.

Some believe the deadline for Bhagyam will be extended. "Under these contracts the entire risk is transferred on to the contractors," complains a source.

He adds likely bidders expressed concern to Cairn during pre-tender meetings in June and July. "For gas producer wells Cairn has asked for two sets of price quotes," we hear.

"One if the gas is of good quality and is saleable and another if the gas is not good quality and unsaleable. Likely bidders wonder how they are expected to know the gas quality before drilling? Cairn refused to change its payment methodology and told bidders they will be provided detailed sub-surface data for each drilling location.

"Bidders must do their own assessment for each proposed well and provide two (gas) price quotes," we learn.