Storm gathers over TGS Nopec seismic deal

Vol 13, PW 20 (25 Mar 10) Exploration & Production

Seismic contractors are outraged over DGH moves to hire Norway’s TGS Nopec to shoot 15,500-lkm 2D on the western and eastern offshore without floating an open tender.

PETROWATCH learns the DGH sent a proposal to the oil ministry a month ago for approval to hire TGS Nopec for this major acquisition programme to shoot 7000-lkm near the Andaman Islands in the Bay of Bengal and another 8,500-lkm in the Saurashtra and Kutch basins on the west coast. In its proposal the DGH says it wants TGS Nopec to shoot â€کlong offset’ 2D to the west of the Andamans and stresses that the Saurasthra-Kutch 2D will “significantly improve imaging of the prospective Jurassic sediments beneath the Deccan trapsâ€‌ leading to “new exploration opportunities.

â€‌ Widespread cynicism has greeted the DGH request: TGS Nopec, we hear, is to be paid $2125/km for this â€کmulti-client survey’ - much higher than the current market rate of between $600 to $800/km for â€کexclusive single client’ 2D, where results are promised only to one company. “Multi-client survey rates should actually be lower than single client survey rates!â€‌ complains a rival seismic contractor.

Others claim this proposal will result in “big financial losses for the countryâ€‌ if the oil ministry accepts. Several seismic contractors have written letters to the ministry and to the DGH demanding details of all future seismic plans over the next three years so they can send in competitive proposals.

“Why didn’t the DGH invite bids from other contractorsâ€‌ asks one. “The ministry should scrap this proposal and ask the DGH to invite bids! They will get lower bids and also show they are transparent.

Results would also be faster if the assignment were split between several companies.â€‌ Oil ministry officials are believed to be wary of approving the DGH proposal following the storm left by former DGH boss VK Sibal.

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