PGS BEATS WESTERN AND SCHLUMBERGER FOR UMRAT

Vol 3, PW 2 (17 Feb 99) Exploration & Production
     

PGS Reservoir has emerged the surprise winner of an ONGC tender for a 3D Ocean Bottom Cable (OBC) survey of Umrat on the Bombay Offshore.

In Mumbai, the news has taken many by surprise. It was widely believed the contract would go to Western Geophysical, which had a crew at ONGCs nearby South Bassein gasfield.

Officially, financial bids are still being examined by ONGCs Executive Purchase Committee, with a formal decision expected before the end of February. Unofficially, it is widely believed ONGC has made a decision to select PGS over Western.

On the 1st and 2nd of January, Western demobilised its South Bassein crew, possibly in anticipation of ONGCs decision. As always, ONGC appears to have been driven by the lowest price: Petrowatch learns PGS bid $31-32m, while Western bid $35-36m, and GeoPrakla, a division of Schlumberger, bid between $35m-40m.

Much of GeoPraklas equipment for the OBC survey is tied up in the Gulf of Mexico. Western, meanwhile, is reported to have written to ONGC Chairman, Bikash Bora, questioning its non-selection.

It appears Bora wrote back telling Western to lower its price. The real question, however, is this: why did Western overbid One oilman suggests the company was looking to recoup losses from its South Bassein contract.

Here, ONGC forced Western to complete an unfinished job from two years ago at rates equivalent to 30% of todays OBC rates. A correspondent writes: "If ONGC tempted Western back to Bassein with the promise of Umrat as a carrot, then they can justifiably feel double-crossed".