Sevan Marine bids lowest for ONGC deepwater tender

Vol 12, PW 2 (12 Jun 08) Exploration & Production

Norwegian drilling contractor Sevan Marine has emerged lowest bidder in ONGC’s long-drawn-out tender to hire a deepwater rig, which can operate in water depths of 10,000-feet.

Sevan surprised everyone when price bids were opened at 3pm local time in Mumbai on June 5, offering an Operating Day Rate (ODR) of $524,900 for â€کcircular hull’ rig Sevan Driller-II, which is under construction. Add mobilisation and demobilisation fees, plus the cost of fuel and hire charges for the hydrogen sulphide system, and Sevan’s Effective Day Rate (EDR) jumps to $579,000.

Vantage Energy was second, quoting an ODR of $585,000 for Platinum Explorer with an EDR of $645,000. Transocean was the most expensive, offering Deepwater Pathfinder at an ODR of $695,000 and an EDR of $750,000.

Transocean originally offered Global Santa Fe Hull No.2148 as an alternative to Deepwater Pathfinder but later withdrew this rig, as it did not meet all of ONGC’s requirements.

Global Santa Fe Hull No.2148 is under construction by Hyundai in South Korea while Deepwater Pathfinder is currently offshore Nigeria.

As lowest bidder, Sevan Marine should get the contract for the rig, which ONGC wants mobilised by December 2010. “The ball is now in ONGC’s court,â€‌ says a drilling contractor.

“Sharma (ONGC chairman) is on record saying he can’t get deepwater rigs through tender but now he has three qualified bidders with one offering a very good rate. Nothing should stop ONGC from signing a contract with Sevan Marine.

â€‌ Other drillers are surprised that Vantage was allowed to bid, as its documentation doesn’t meet ONGC’s standards. There is also surprise that ONGC has approved the unproven â€کcircular hull’ design of Sevan Driller-II.

“ONGC did not want Transocean to be the sole bidder and walk away with the contract after bringing down the rate slightly through negotiation,â€‌ says a source. “So they allowed Sevan and Vantage into the race.