Give advanced rig features for free - ONGC
Greatship has warned ONGC of potential legal battles over contentious terms in its five jack-up tender that allow it to use advanced rig features without paying extra.
A source at the July 12 (2023) pre-bid says Greatship asked challenging questions with a warning that the terms could invite arbitration if ONGC does not modify them. ONGC invited offers to hire the five rigs on June 30 (2023), with an August 9 (2023) bid deadline.
Others attending the pre-bid were Aban Offshore, Jindal Drilling, Dynamic Drilling, Shelf Drilling, Abu Dhabi-based Ocean Oilfield Drilling, and Jagson Drilling. At the pre-bid, Greatship stressed that if a bidder provides a rig with advanced capabilities, such as drilling in deep waters, the present tender terms allow ONGC to use those features without paying more, whether or not the bidder wants to offer the features.
ONGC would similarly force bidders to provide all equipment onboard the rig for free, regardless of whether these specs appear in the tender. Greatship argued this is unfair to contractors but common in ONGC rig tenders.
"ONGC always dismisses this query," admits our source. Greatship consulted retired Supreme Court Justice R Banumathi on the legality of this clause.
"As a state-owned company, ONGC must conduct itself in a fair and non-arbitrary manner," stresses our source. "Justice Banumathi said this clause is against the law and the constitution."
Greatship reminded ONGC that the QCBS (Quality and Cost-Based Selection) system was introduced to give weight to superior specs. But the QCBS parameters are limited, undermining the effectiveness for bidders with higher-spec rigs.
Greatship suggested that if ONGC wants to use a rig's advanced features, these features should be included under QCBS or reflected through an increased day rate. Another contentious tender condition is ONGC's ban on bidders offering the same rig in different categories.
"A bidder should be allowed to offer the rig in two separate categories but to confirm availability in only one category," we hear. "This will help ONGC get more rigs."
As expected, ONGC rejected all pre-bid suggestions.