Halliburton banned from ONGC drillbit tenders

Vol 21, PW 20 (12 Jul 18) Exploration & Production

ONGC has banned Halliburton Offshore Services from supplying drillbits for three years following allegations it misled the company when bidding for a premium drillbits tender.

On June 21 (2018) ONGC's high-powered Executive Purchase Committee took the decision to stop sourcing drillbits from Halliburton after finding the company guilty of violating its Integrity Pact while bidding in the 2015 tender. Four days later on June 25 (2018) ONGC's website said the ban would begin immediately and end on June 24, 2021.

According to the EPC minutes, Halliburton won the three-year contract on April 29, 2016 to supply ONGC with different-sized premium drillbits. ONGC general manager (drilling) Ajith Kumar conducted an inquiry and submitted his report on June 7 (2018) after Halliburton accepted a mismatch between the data on drillbits submitted and its global database.

In its bid Halliburton stressed it had supplied similar drillbits to the ones sought by ONGC to Saudi Aramco. But according to the EPC minutes, a lawyer from Allahabad, Ashok Kumar Pandey, wrote to ONGC's chief vigilance officer on May 22 (2017) alleging that, "Halliburton tempered/forged the data and submitted documents to score maximum grades" to qualify "by intentionally manipulating" information.

Pandey, about whom little is known, alleged the type of drillbit and well depth Halliburton cited in the bid was not the same as that used by Saudi Aramco. Pandey's complaint was received by the PMO on June 8 (2017).

ONGC wrote to Saudi Aramco on three occasions to verify Halliburton's claim but didn't hear back. Only on April 24 (2018) did Halliburton admit its mistake after a team from the company's Houston-based Global Ethics & Compliance department investigated its India office. "Investigations confirm some 'run data' (on drillbit performance) in the bid did not match the global database," conceded Halliburton. "Did the error occur during the download from the global database; or while processing or formatting data in Excel; or did someone change the information intentionally?" Halliburton told ONGC the employees who prepared the bid have since left the company. In his June 7 report ONGC general manager Kumar recommended ONGC encash a $1.6m performance bank guarantee from Halliburton but stepped back from recommending a blanket ban because allegations of fraud could not be proved. ONGC management felt Halliburton's willingness to admit its error did not "mitigate its act of misconduct" but also stepped back from a blanket ban on tenders as this would impact ONGC business. In the end only the drillbit business was banned. All attempts to contact Halliburton country head Kamal Arafeh for a comment were unsuccessful.

Halliburton banned from ONGC drillbit tenders

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