Schlumberger anger at Platinum win for Baker

Vol 14, PW 13 (16 Dec 10) People & Policy

Schlumberger bosses must be feeling as if the rug has been pulled from under their feet.

PETROWATCH learns rival Baker Hughes has surprised industry watchers by winning an integrated services contract from ONGC for Vantage Drilling’s deepwater drillship Platinum Explorer, expected to reach India this month. When bids were opened on December 9, Baker submitted a winning quote of $270m for the five-year contract, well below ONGC’s internally estimated cost of $387m.

Schlumberger was barely a hair’s breadth behind with a marginally higher quote of $274.8m; Halliburton, which in private was ambiguous about the contract, came third, quoting $285m. Schlumberger is naturally furious and has approached ONGC’s group of Integrated External Monitors (IEM) to question the online bidding process and Baker’s award.

This makes it unlikely the new owner of BJ Services (Baker) will receive confirmation of its winning bid this weekend with an endorsement from ONGC’s all-powerful Executive Purchase Committee. One analyst is incredulous at the near identical bids of Baker and Schlumberger on most of the 800 biddable items.

“Baker won by a very thin margin,” he says. “Its bid is hardly $2000/day cheaper than Schlumberger’s bid.

” Uncorroborated rumours of foul play inevitably fill the air; no doubt these will be aired during the first meeting between the monitors and ONGC on December 16 (today). No firm date is yet fixed for Baker or Schlumberger to meet the IEM, if indeed such meetings take place.

“Possibly the monitors will fast-track a decision and allow Baker’s win,” we hear. “Platinum Explorer is reaching any day and it’s too expensive to keep her hanging around.

” Schlumberger’s only consolation is that it won ONGC’s separate wire logging contract for Platinum with a $14m bid, beating Baker’s bid of $18m.