BG forced to issue new FEED tender for PL at Panna

Vol 13, PW 3 (16 Jul 09) Exploration & Production

Reliance and ONGC have forced PMT partner British Gas to commission a new FEED report for the proposed PL platform at the Panna oilfield.

PETROWATCH learns the new Front End Engineering and Design study is likely to be released for tender at the end of the monsoon season in September. Construction of the PL platform is then likely to be included in the work programme and budget for 2010-11.

A PMT source reports that BG wanted to execute the project using an earlier FEED blueprint prepared back in 2007 but was overruled by partners Reliance and ONGC. Acceptance of the decision to commission a new FEED blueprint is now with the PMT technical committee and the board of joint operators.

“A draft of the technical committee resolution (for the new FEED study) is in circulation with PMT partners,â€‌ confirms a source. When partners agree, their decision to commission a new FEED study must still be approved by the DGH ahead of any tender.

Victorious Reliance and ONGC are understood to have backed the new FEED proposal saying rapid advances in technology since completion of the last report made it obsolete. “Today we have small, low-cost platforms being designed which can be managed in an integrated way with other facilities in the field,â€‌ adds a source.

Reliance and ONGC argued that over the past two years their understanding of the Panna field has improved and that this ought to be incorporated into the new FEED report. Under BG’s original blueprint, the PL platform was projected to cost $80m and would have been incorporated along with the new PK platform costing $170m, and the SWP platform costing $130m.

Last year the DGH opposed more capital investment for an additional work programme at Panna because the drop in crude oil prices from a record $147/barrel last July to just $32/barrel in December would have cut into the government’s share of profit oil.