L&T wins Sagar Uday contract from ONGC
Larsen & Toubro is set to win an ONGC contract to refurbish 25-year old jack-up Sagar Uday, beating Indian yards Pipavav Shipyard and Bharati Shipyard, as well as Dubai-based Lamprell and Singapore’s Keppel FELS.
Price bids for this year-old tender were finally opened on April 20 in Mumbai and PETROWATCH learns L&T emerged lowest bidder at Rs376.91cr ($84.5m) facing stiff competition from state-owned Cochin Shipyard at Rs379.80cr ($85.2m). Cochin Shipyard said it could complete the job in just 260 days compared to the 270 days promised by L&T.
This worried L&T, we hear, as ONGC slashes Rs25 lakh ($56,111) from the bid price for each day saved. But eventually L&T still emerged lowest bidder even after this calculation.
ONGC hasn’t yet issued a LoI to L&T as its tender committee has not yet sent the papers to top management for approval. When it does this will be L&T’s first such assignment for ONGC; Cochin Shipyard has already completed two or three similar jack-up refurbishments for the state-owned company in the past.
ONGC is believed to have selected L&T because of work the Indian contractor is carrying out to completely rebuild a LeTourneau 116-C design jack-up Foresight Driller, severely damaged in 2005 by Hurricane Katrina in the Gulf of Mexico. Work on Foresight Driller is being carried out at L&T’s Sohar shipyard in Oman for its London-based owner Foresight Drilling.
“L&T should deliver this rig in June,” says a company source. “It had to manufacture new ‘spud cans’ (part of the jack-up body) and new legs for Foresight Driller.
It was almost like building a new rig.” L&T believes refurbishing Sagar Uday will be relatively straightforward as the 300-feet Baker Marine design jack-up is still working and drilling for ONGC.
“ONGC wants some equipment replaced and some upgraded,” explains L&T. “It also wants some new equipment.
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