ONGC should rethink Ratna platform budget

Vol 22, PW 26 (17 Oct 19) Exploration & Production

As expected, ONGC has extended the bid deadline for offers to set up a process platform at the Ratna and R-Series fields off Mumbai amid calls for it to radically rework its unrealistically low budget.

ONGC has extended the bid deadline from October 9 to November 6 with industry sources calling on the state-owned explorer to use the month-long interval to take a long, hard look at its $128m budget if it wants a good response. They cite the wide gap between ONGC's $270.22m budget for the unrelated NQRC platform project in the Mumbai High North fields and the $385.25m quoted by lowest bidder L&T when ONGC opened price bids on September 9 (2019).

Second-ranked Sapura with AFCONS was even further off at $507.32m. Under government rules, ONGC cannot issue a LoA to L&T because the difference between the quoted price and its budget is more than 10%.

All it can do is negotiate with L&T or scrap the tender - the most likely outcome. Sources fear a similar fate for the Ratna and R-Series project.

"NQRC involved just an upgrade of an established platform and the addition of crew living quarters but at Ratna a new process platform is needed," says a source. "Bids will definitely be higher than (just) $128m."

Likely bidders for Ratna include L&T, Sapura with AFCONS, NPCC and Essar, renamed E&P Offshore, with Indonesian company PT Gunanusa.