Saipem rig in court battle with ONGC and Jindal

Vol 6, PW 19 (20 Nov 02) Exploration & Production

JINDAL DRILLING HAS narrowly escaped being blacklisted by ONGC because of the sins of its partner, Saipem of Italy.

At issue is Saipem drilling rig Perro Negro-3, under contract to Jindalfor a two-year (plus optional extras) ONGC job on the western offshore. In February last year the rig suffered damage on location and was taken for repair to Dubai.

ONGC expected the rig to return two months later in April but instead Saipem returned the rig in January 2002 - almost 11 months later! When the rig returned, ONGC was furious to discover that after it had been repaired in Dubai, Saipem contracted Perro Negro-3 to its sister Italian company Agip for work in Iran! Angry, ONGC demanded compensation from Jindal for breach of contract and demanded that Jindal add the 11-month absence to the tenure of the contract. Jindal claims it knew nothing of Saipem's action nor had it given its consent for the Iran job.

ONGC stood firm and insisted that Jindal agree to extend the tenure of the contract or be banned from all future ONGC contracts for two years. "Saipem deployed the rig elsewhere without our or ONGC's consent," Jindal tells us.

"ONGC knows this. We have contractual and legal remedies against Saipem for breach of contract." Saipem meanwhile is suing Jindal and ONGC in the Bombay High Court asking for the return of its rig in January next year.

Saipem is only willing to assume a month's extension to the contract, not the entire 11 months of the absence. Today Jindal and ONGC are united against Saipem.

"Both of us will tell the court that Saipem cannot run away like this," adds Jindal. "Both of us have suffered due to their actions and should be compensated." The case will be heard this month.