Angry ONGC terminates Halliburton contract

Vol 5, PW 20 (21 Nov 01) Exploration & Production

Even the fiercely competitive dog-eat-dog world of ONGC contractors has been jolted by this story! Last month ONGC terminated a three-year contract signed in March with Halliburton.

Rare indeed for ONGC to take such a drastic step, but in this case we are told chairman Subir Raha put his foot down. Halliburton was awarded 70% of a contract for wireline services, workovers and development for 16 ONGC offshore rigs.

The remaining 30% was given to Schlumberger. But sometime in September ONGC realised Halliburton had not mobilised the RMT tool, a logging equipment used to monitor reservoir saturation.

Why was Halliburton unable to mobilise the RMT tool Because it was an item on the India embargo list declared by the US government in May 1999 soon after Delhi conducted nuclear tests in Rajasthan. "They bid a tool on the embargo list, knowing fully well they did not have it in the country and would not be able to get it in." Halliburton's oversight enraged ONGC and the matter went up to the board and the chairman who decided to terminate the contract.

The embargo was eased after September 11th, but by then it was too late. "They would have had to apply to the US government for a licence to export the tool and there was no way it could come into India in time for the contract," reveals a highly placed source.

"The only way out for us was to terminate the contract."

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