ONGC changes mind and opens Prize field bid

Vol 9, PW 20 (26 Jan 06) Exploration & Production

ONGCs long-drawn out saga for the award of western offshore marginal fields seemed to draw to a close on 19th January when it opened the price bid from Hindustan Petroleum subsidiary Prize Petroleum in Mumbai.

Prize had bid in partnership with Malaysias M3nergy for clusters 7 and 8. But ONGC decided to open the bid for cluster 7 only as it wants to retain cluster 8 for itself.

PETROWATCH learns Prize offered 44% of the oil to ONGC and proposed to keep 56% with itself. Prize offered 25% of the gas to ONGC and wants to keep 75% with itself.

Prizes bid is more attractive than the Oil India led consortium, which wants to offer only 35.21% of the oil and 2% of the gas to ONGC, retaining the entire balance with itself. Despite its offer, Prize might still be denied the block.

An industry source tells us vested interests in ONGC have hinted to Prize that the bid validity might be extended by another three months because of pressure from some aggrieved companies. Why should anybody be aggrieved asks a source.

Maybe some people within ONGC are preparing these representations. Oil India had bid in an alliance with Tata Petrodyne and Langkawi Oil and Gas of Malaysia for clusters 7 and 8.

In October, ONGC opened the price bid of only the Oil India led consortium after disqualifying Prize saying it didnt meet the bid evaluation criteria. Prize protested loudly and complained of unfair treatment.

ONGC backed down and in December said the Oil India bid was commercially not attractive and that the tender needs more competition, allowing Prize to re-enter the fray. At the same time, ONGCs powerful executive purchase committee also decided to review the entire case and not re-invite bids, overturning a recommendation from ONGC officials at the western offshore asset to invite fresh tenders for clusters 1 to 9 except cluster 7.

For cluster 7 the western offshore basin recommended starting price negotiations with Oil India.