Bid & Tender
ONGC Floats First Tender for Boosting Mature Fields’ Output under PEC Contracts

Date : Apr 05, 2018

Oil and Natural Gas Corporation Ltd (ONGC), India’s state-run petroleum explorer, has invited a global tender for undertaking work to boost production from mature fields under Production Enhancement Contracts (PEC).

 

The PEC contracts, first such pacts for ONGC, will be signed for production work in Geleki field in Assam and Kalol field in Gujarat, two ONGC executives told source.

 

The company had, in a Notice Inviting Tender issued in January, said Schlumberger Asia Services Ltd, Halliburton Offshore services and Baker Hughes Singapore PTE Ltd have been pre-qualified as they met the Pre-Qualification Criteria (PQC). The notice also states the tender enquiry can also be issued to firms who request ONGC for issuance of tender enquiry and who meet the pre-qualification criteria.

 

“We had floated an Expression of Interest (EOI) in June last year calling for suitable service providers with expertise, financial capability and proven track record of increasing production from mature fields. We received interest from nine companies of which we have qualified three, including Schlumberger, Halliburton and Baker Hughes,” said a senior ONGC executive who did not wish to be identified.

 

He added that in the next stage, a pre-bid round will take place later this month and the company expects it will be able to award the contract by the end of the second quarter (July-September) of current fiscal.

 

Former ONGC Chairman and Managing Director R S Sharma said it is customary for companies to float an EOI before inviting tenders while venturing into new contracts. "As this is a first-of-its-kind contract for the company, it is prudent to first float and EOI in order to understand the level of participation. Subsequently, a tender is floated after appraisal of the response and feedback of the participants," he said.

 

The EOI floated in June last year states that the duration of the PEC will be 15 years with a fixed service fee to be paid for any incremental oil or gas produced over the baseline. Also, the service provider will have to make its own investments to increase the production without any interference of monetary support from the company.

 

“In fields which are ageing and mature, you have to continue investing more to maintain the baseline production. PEC contracts will help us shift the risk on the service provider, who will have to invest and increase production for these fields. We are not looking at other fields at the moment,” another senior ONGC executive said.

 

ONGC’s onshore crude oil production increased by 2 per cent to 6.064 Million Tonne (MT) for the financial year 2017-2018 as compared to the previous fiscal. The company’s natural gas production from onshore fields rose 8 per cent to 6 Billion Cubic Meter (BCM) last fiscal.