Belarus-based RUE wins ONGC deal for 6 fields

Vol 23, PW 5 (16 Jan 20) Exploration & Production

Little-known Republican Unitary Enterprise (RUE) from Belarus is set to walk away with an ONGC contract for chemical Enhanced Oil Recovery (EOR) despite objections by more established US-based rival DeGolyer & MacNaughton (D&M).

RUE bid lowest for three reservoirs in Gujarat and three in Assam when ONGC's Ahmedabad-based Institute of Reservoir Studies (IRS) opened price bids on December 30 (2019) from six companies. RUE bid Rs4.87cr ($687,000) for each reservoir but controversially neglected to add 18% GST in its bid, unlike other bidders.

D&M, the only other bidder to quote for all six reservoirs on offer, subsequently complained to ONGC arguing that the RUE price bid should be disqualified because it did not include GST rates. According to the tender’s rejection criteria B2.4 (f): "Offers which do not conform filling of all relevant fields in the online bidding format for the items quoted by them will be rejected."

An industry source believes RUE should "technically" be rejected in line with the bid clause. But another source adds that according to ONGC’s statutory compliance it can add GST on its own.

Last week ONGC issued the LoA to RUE which now needs to complete the project in two phases: Phase-I will involve laboratory studies including screening and core flood studies to develop a surfactant-based chemical formulation for each reservoir; Phase-II will involve the preparation of a conceptual pilot programme and laboratory-based stimulation work.