Warning to ONGC over EOR terms in Gujarat

Vol 22, PW 11 (21 Mar 19) People & Policy

As expected ONGC plans to carry out chemical injection at 12 reservoirs across Gujarat and Assam has attracted huge interest from India and abroad.

Despite the interest however, there's mounting concern over ONGC's demand for a performance bank guarantee worth 50% of the contract. "That's a 'deal-breaker' for us," says a likely bidder, who attended an EoI meeting held by ONGC's Institute of Reservoir Studies in Ahmedabad on March 12.

"Most companies with expertise in chemical EOR (Enhanced Oil Recovery) are academics - they don't have huge budgets to lock-in for long periods." He adds ONGC told companies it would consider their concerns about bank guarantees while preparing the tender, likely to be issued by end-April 2019.

After starting the meeting at 11am, ONGC made a 20-minute presentation then heard 10 minute presentations by each company followed by one-to-one meetings. ONGC announced to those gathered it wants to submit pilot programmes for each reservoir to the DGH and oil ministry by April 2020.

ONGC has divided the project into three phases: Phase-I, lasting eight months, will involve laboratory studies to develop a surfactant-based chemical formulation for each reservoir; Phase-II, lasting two months, will involve the preparation of a conceptual pilot programme and stimulation work in the laboratory; Phase-III will be the pilot programme, lasting two to four years, which ONGC will monitor and evaluate to suggest any change of approach.