Global Vectra drives hard bargain at PMT

Vol 14, PW 4 (12 Aug 10) Exploration & Production
     

Despite mutual suspicions and heated negotiations lasting over a month, it seems British Gas and its partners Reliance and ONGC have chosen to re-hire two Global Vectra helicopters at the Panna, Mukta and Tapti fields.

PETROWATCH learns Global Vectra agreed at an August 3 meeting held in Mumbai to hire out two Bell 412 helicopters for three years for Rs98cr ($20.9m). Together these helicopters will fly for 110 hours/month carrying crew and equipment to the PMT platforms and wells offshore Mumbai.

Emails were sent out on August 5 confirming the fresh contract would begin with backdated effect from July 19, when the previous contract ended. Industry sources say Global Vectra has won this contract despite PMT consortium suspicions that it had an ‘insider’ among them working on its behalf.

PMT partners also reportedly felt that Global Vectra and United Helicharters, the only other bidder, were cooperating as a ‘cartel’ to keep rates unusually high. When price bids were opened end-June, BG and partners were shocked that Global Vectra as the lowest bidder had quoted Rs115cr ($24.5m) for the three-year contract.

This was 38% higher than its rate in the old contract. Tough bargaining followed and PMT and Global Vectra met four to five times in July before finally striking a deal.

“There was no way the consortium would accept Vectra’s bid even though it was lowest,” says an analyst, “because about two months ago ONGC awarded Global Vectra a similar contract for just Rs90cr ($19.2m).” Vectra was very aggressive at the first negotiation meeting, leading PMT partners to suspect it had a “private deal” with one of them.

But many believe BG has only itself to blame for Vectra’s high price. “Why don’t they float an open tender” questions an observer.

“They’re asking for trouble by restricting competition to a few bidders.” ONGC affiliate Pawan Hans had also been pre-qualified by BG for this tender, but did not bid.