Ramunia goes on ONGC blacklist over missed deadlines

Vol 12, PW 1 (29 May 08) People & Policy

Malaysian service provider Ramunia’s first direct assignment in India has ended on a sour note with ONGC terminating its contract for the B-193 field and also blacklisting the company.

PETROWATCH learns ONGC was compelled to take this extreme decision on May 15 after much drama and a series of lapses by Ramunia. The first of these began almost immediately after ONGC awarded the contract in January this year when Ramunia should have submitted a performance bank guarantee and insurance cover within a week for the project before starting work but did not - despite reminders from ONGC.

Ramunia instead extended the bid bond validity date three or four times. ONGC officials were apparently so keen to get the project off the ground they flew to Malaysia three times to meet Ramunia managing director Daniel CS Ahn.

“They never managed to meet him,â€‌ reports a source. “Every time ONGC turned up he took off somewhere else.

â€‌ In early April, Ramunia asked ONGC for an advance payment against the contract but was refused. Moreover, ONGC still hadn’t received the performance bank guarantee or the insurance cover.

“Ramunia had not even started a proper site survey for the project,â€‌ we hear. Then, ONGC set an April 30 deadline for Ramunia’s performance bank guarantee.

This deadline passed by uneventfully; except for a letter from Ramunia asking for a fortnight’s additional time. But by now ONGC had made up its mind to â€کinvoke’ the bid bond and on May 15 told Ramunia’s bankers.

Curiously, a day before this, Ramunia told ONGC it had worked out a new proposal to execute the project but ONGC declined to go along, as the proposal contravened its rules. ONGC’s delay in taking speedy action against Ramunia is raising eyebrows in industry circles.

“ONGC should have terminated the contract right away when Ramunia couldn’t submit the bank guarantee within a week,â€‌ we hear. “By waiting five months ONGC has lost precious time and now the project has missed a season.

â€‌ ONGC and Ramunia are now both believed to be contemplating legal action.