EPC meeting raises more questions than answers
TENSION DOMINATED ONGC's last meeting of the Executive Purchase Committee to discuss the deepwater tender.
Held on 25th June at the Oberoi Towers Hotel in Mumbai, it was called to coincide with a meeting of the company's institutional investors. PETROWATCH learns the EPC meeting of five ONGC directors and two other managers began at 2pm for a mammoth 4-hour session during which the deepwater bids submitted by Transocean Sedco Forex dominated discussions.
We understand Nathu Lal, director technical & field services, arrived at the meeting with a pile of legal paperwork supporting Transocean's stand that its bid through separate commercial entities complies with tender criteria. The documents suggest that TSFs bids can be treated as independent entities and still comply with the technical terms, reveals a source.
Despite this, we understand the EPC was unable to endorse the Transocean bid because of an unwillingness by Lal to endorse it without unanimous approval from others present and in particular from Subir Raha, ONGC chairman and EPC chair. Surprisingly, Raha didn't attend the meeting, fueling rumours of a rift.
One source tells us Raha is unwilling to endorse Transocean's bid unless Lal endorses it first. Contacted by PETROWATCH for a reaction, Raha denies speculation of a rift with any of his directors and offered the following explanation for his absence.
"I did not attend the meeting because I was busy preparing a presentation for the investors meeting in the evening," he said. "As per the rules, the senior most director conducted the meeting and the outcome was reported to me later in the evening.
At 6pm, the EPC adjourned for the investors meet and re-assembled at 7.30pm for another two-hour session. At some point, we understand the EPC also took the surprise decision to re-examine the 'Rig Only' and 'Service Only' option, while simultaneously pursuing technical clarifications from Transocean and Dolphin for the 'Integrated Package' option.
We know that several clarifications will be needed under the 'Rig Only' and 'Service Only' option," reveals a source. "The EPC is now trying to take a total view of the tender." One contractor is scathing: "If ONGC goes for the other two options it'll be more messy than what we've seen with the 'Integrated Option'," he said.
"They'll be dealing with hordes of companies."
