ONGC's East Bassein tender planned for November

Vol 7, PW 12 (27 Aug 03) Exploration & Production

As a foreign based oilfield services and engineering contractor, you'd be well advised to ignore a forthcoming ONGC tender for the East Bassein oil and gasfield offshore Mumbai.

We learn ONGC is planning to issue a tender to develop the field in November this year. Global tender it will be, but industry sources predict only two domestic companies will compete: Larsen & Toubro and Mazagon Docks.

Look to India's discriminatory tax regime for the reason why. Bassein East lies in a customs duty payable area.

Engineering companies and contractors who can construct the required facilities within India are exempt from paying the 50% import tariff and are only subject to a 15% excise duty. Only three Indian companies could benefit from this contract: L&T, Mazagon Docks and Engineers India.

Last month ONGC appointed Engineers India as project management consultant to Bassein East, thus disqualifying it for the tender. Whichever Indian company wins will have to pass on to ONGC the 35% saving in costs due to import tariff exemption! Bassein East promises to be a significant development programme.

ONGC wants to install two lightweight well platforms: one with 12 slots and the other with nine slots. Both will have 'topside' facilities; an integrated process platform to handle production of 20,000 barrels per day and water injection of 63,000 b/d.

Also envisaged are compression facilities, six new submarine pipelines totalling 38-km length and related modifications to the existing Bassein platform complex. ONGC estimates the project will cost Rs985cr ($205m) and wants it completed by 31st March 2006.

Once these facilities are ready, ONGC will drill 19 wells of which 13 will be producers and six water injectors to produce 6.2m tonnes oil (43m barrels) and 3.12bn cubic metres of gas over 15 years. Peak oil production is expected to be 16,000 b/d while peak gas production is expected to be 1m cm/d.

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