ONGC wants to blacklist John Energy from rig contracts

Vol 10, PW 26 (03 May 07) Exploration & Production

ONGC managers at the company’s Ahmedabad asset want to blacklist Indian rig contractor John Energy from all future drilling contracts.

PETROWATCH learns ONGC’s Ahmedabad asset has prepared a detailed case against John Energy, following the latter’s non-deployment of rigs after it was awarded a contract earlier this year. Last year ONGC issued an open tender to hire five workover rigs of 30-tonne capacity each for 18 months at the Ahmedabad asset.

John Energy, we learn, offered two rigs and emerged lowest bidder. ONGC issued a Letter of Award (LoA) to John Energy on 8th January this year for two rigs: John 50/2 and John 50/3, each for 18 months.

John Energy was asked to deploy both rigs within a period of 45 days from the LoA and also to submit a performance bank guarantee of Rs16.7 lakh ($237,000) by 23rd January. Notes ONGC: “The bidder (John Energy) neither submitted the performance bank guarantee or deployed the rigs within 45 days.

â€‌ ONGC’s LoA to John Energy expired on 23rd February this year. Four days later on 27th February ONGC initiated action by forfeiting John Energy’s bid security deposit of Rs5.5 lakh ($78,000).

Following this, the Ahmedabad asset of ONGC asked senior management to ban John Energy from bidding in ONGC drilling contracts. Speaking to this report, Mahesh Vyas, managing director of John Energy said the dispute with ONGC was over mobilisation time.

“We asked for a mobilisation time of between three and four months as both rigs are under refurbishment.â€‌ Vyas said ONGC did not agree to this request, “and forfeited our bid security deposit.

â€‌ He said under the terms of the contract, this is the maximum penalty that ONGC can impose for default. “There’s no provision in the contract for blacklisting a contractor.

â€‌ Vyas said John Energy is still willing to mobilise both rigs for ONGC if given more time.

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