ONGC accused of foreign bias in FPSO tender

Vol 14, PW 15 (27 Jan 11) Exploration & Production

ONGC’s tender to hire a Floating Production and Storage Offshore (FPSO) vessel is descending into chaos, as Indian contenders accuse it of favouring an unnamed foreign bidder.

ONGC extended the bid submission date last week from February 1 to February 15 for the seven-year contract, amid allegations the tender is ‘loaded’ against Indian bidders. Angry Indian bidders wrote to ONGC last week setting out their grievances.

“ONGC normally allows Indian companies to have a technical collaboration with experienced global companies so they can qualify,” says a source. “But in this tender ONGC has for some mysterious reason said it won’t accept technical collaboration between Indian bidders and foreign companies.

” Asks another aggrieved Indian bidder: “What’s so special about a FPSO that ONGC is stopping us having a technical collaboration” The answer, we are told, is that ONGC and its UK-based consultant DPS Bristol favour a Southeast Asian bidder, who has an idle FPSO. By closing the door on Indian bidders in this tender, says another bidder, ONGC is ensuring that no domestic bidder “even with sufficient financial strength” can qualify when it floats a fresh tender after seven years.

Another clue to ONGC’s real intentions is the condition in the tender document that the bidder should own or operate a minimum two FPSOs each of at least 50,000 dead weight tonnes. “During the (November 16, 2010) pre-bid we asked why the minimum requirement was 50,000 dwt when ONGC’s actual requirement is 100,000 dwt” we hear.

“But the explanation was unconvincing.” We are told the favoured Southeast Asian company owns an idle FPSO of 58,000 dwt.

“ONGC wants the FPSO to be commissioned within 15 months of Letter of Intent. This is an impossible schedule, which has been deliberately laid down so nobody will meet it.

Eventually the idle FPSO with the favoured bidder will be selected.”

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