ONGC still examining deepwater technical bids

Vol 7, PW 7 (18 Jun 03) Exploration & Production

ONGC IS delaying opening commercial bids in its closely-watched tender for two deepwater rigs because it is still unhappy with the technical clarifications submitted by the two front runners: Dolphin Drillingand Transocean Sedco Forex.

Price bids will be opened only after the EPC (Executive Purchase Committee) is completely satisfied with the clarifications, reveals a senior ONGC source. You must understand that ONGC is awarding a contract of this magnitude for the first time and we want to be absolutely sure of our decision.

We understand ONGC is considering holding its next EPC meeting to evaluate the Dolphin and Transocean technical bids this week on Friday, 20th June. ONGC's unhappiness with Transocean centres on its submission of bids through three different subsidiaries, a move that could potentially insulate the parent company from liability.

EPC felt that Transocean is not taking direct responsibility in line with the tender specifications," adds a senior source. "Transocean has submitted a new proposal clarifying our doubts.

Dolphin has not been spared scrutiny either. ONGC remains unconvinced of its financial health and has asked it to provide a solvency certificate showing that its balance sheet is in a sound financial condition.

Behind the scenes, we understand ONGC is making every effort to help Dolphin and Transocean by giving direction and supplying the relevant paperwork to ensure that both companies fully comply with the tender specifications. If neither company qualifies we will have to start the tender process all over again, he adds.

"We don't want this to happen." Privately though, one ONGC official confides, We are not worried about Dolphin. Its Transocean that needs to qualify." ONGC's tender is for two deepwater rigs to drill in water depths of 1,800 and 3,000 metres.