Bangalore: India’s biggest oil explorer, Oil and Natural Gas Corp. Ltd (ONGC), has tightened norms for hiring offshore support vessels to ensure owners deliver ships on time.
The state-owned company has included the new rules in a call for bids for hiring 11 vessels for three years beginning 30 April, an ONGC executive said, who didn’t want to be named because of company policy on speaking with the media. The invitation closed on Thursday.
“Such extensions and delays in getting vessels were hampering our production programme due to inadequate number of ships,” he said.
Getting tough: An ONGC oil drilling platform at Bombay High. The state-owned company has included new rules in a call for bids for hiring 11 offshore support vessels for three years beginning 30 April. Bloomberg
ONGC has received initial offers from 12 firms for 37 ships, said a person from one of the bidding companies. He, too, didn’t want to be named. “There is no provision for extension even for a day,” he said. “ONGC will straightaway cancel the contract with firms who fail to give the ships by the contracted date. They will also be excluded from participating in future tenders (for two years).”
So far, ONGC sometimes allowed extensions to the deadlines after imposing penalties, and would cancel contracts only in cases of indefinite delay, this person added.
The oil explorer deploys support vessels to carry water, cement, food and chemicals to its oil fields off India’s coast. These vessels play a key role in the firm’s hunt for oil.
ONGC decided to tighten supply guidelines after many shipowners, such as Norway’s Rolv Berg Drive AS and India’s Samson Maritime Ltd and ABG Shipping Ltd, sought repeated extensions to supply the support vessels after winning contracts to do so. ABG Shipping, now known as PFS Shipping India Ltd, is the ship owning unit of Mumbai-based ABG Group.
“Finally, ONGC had to cancel the contracts because these shipowners were not able to deliver the ships,” the ONGC executive quoted earlier said. “Hence, we have decided not to entertain any such delays in our new contracts.”
V.K. Malik, managing director, PFS Shipping, blamed delays in getting propulsion equipment from suppliers. “We submitted all the necessary documents to ONGC regarding the delay and sought extension of time to give the ships, which was not granted and the contract was cancelled,” he said. Such defaults attract a two-year exclusion from participating in ONGC’s subsequent calls for bids. PFS Shipping, therefore, did not participate in the recent tender, Malik said.
“It is a do-or-die kind of situation,” an official with state-run Shipping Corp. of India Ltd (SCI) said on condition of anonymity, referring to the new rules.