Superior secures 9-year vessel LoA from ONGC

Vol 22, PW 4 (29 Nov 18) Exploration & Production

After more than three years trying to enter the Indian market, US-based Superior Energy has managed to secure an ONGC assignment.

On November 23, ONGC issued a LoA to Superior for its vessel Siem Marlin for a nine-year Mumbai offshore well stimulation contract. This LoA to Superior followed more than two months of suspense over whether Schlumberger would match Superior's rock-bottom bid for its Indian-flagged vessel Tag 14, owned by Tag Offshore which ONGC is in the process of blacklisting.

An ONGC source tells us Schlumberger, which quoted $265m for Tag 14, declined to match Superior's $127m rate for vessel Siem Marlin, leaving ONGC no option but to issue the LoA to Superior. ONGC's Executive Purchase Committee had made it clear the LoA should be issued to Superior if Schlumberger did not match the lowest bidder's price.

When bids were opened on August 7, Schlumberger also claimed Right of First Refusal allowed to domestic companies. Some argue ONGC was wrong to open Schlumberger's bid after a move by ONGC's Materials Management (MM) division on July 13 (2018) to begin blacklisting Tag Offshore for two years for failing to perform on an unrelated contract.

"Pending completion of the inquiry process to put the contractor (Tag) on holiday (blacklist)," wrote ONGC general manager PK Thakur, "ONGC shall neither issue any tender to the defaulting contractor nor consider their offer in any tender."