Doing it the ONGC way for Platinum Explorer

Vol 14, PW 12 (02 Dec 10) Exploration & Production

Accusations are being levelled against ONGC for breaking its own rules while evaluating bids in a $387m tender to provide ‘bundled’ services for Platinum Explorer.

This ‘new build’ deepwater drillship has been hired by ONGC from US-based Vantage Drilling for five years and should be mobilised by the end of this month (December). On November 23, the Executive Purchase Committee (EPC) at ONGC approved the short-listing of Schlumberger Asia Services, Halliburton and Baker Hughes to provide boats, helicopters, cementing, mud services, drilling fluids, wireline logging and other services once Platinum begins working.

The EPC asked the tender committee to seek clarifications from the three bidders, and the tender committee then sent letters on November 24 asking bidders to respond by November 30. But an industry source complains the EPC did not “apply its mind” while approving the tender committee’s recommendations which “effectively condone” violations of ONGC’s ‘Bid Evaluation Criteria and Integrity Pact.

’ Under scrutiny are the bids submitted by Baker Hughes and Halliburton. Baker bid in partnership with its subsidiary BJ services and helicopter service provider Global Vectra; Halliburton’s bid mentions Global Vectra and United Helicharters as helicopter service subcontractors.

And here lies the problem: ONGC rules clearly say a company that is part of one consortium in one bid, cannot also be a sub-contractor in another bid for the same tender. Schlumberger had raised a query about this rule in an October 10 letter to ONGC, prompting ONGC to send all bidders an unambiguous clarification.

“No,” wrote ONGC, “a firm which is a consortium member in one bid cannot be a sub-contractor in another bid.” If ONGC follows its rules, Baker’s bid with Global Vectra should be disqualified.

But Halliburton could emerge unscathed as it proposes both Global and United as helicopter sub-contractors so can tie up with one if the other is disqualified.

LNG Summit