ONGC to float new tender for cancelled rig contract

Oil and Natural Gas Corporation (ONGC), the company that cancelled a five-year contract of rig supply with Great Offshore on Thursday, is planning to issue a new tender. India’s largest oil producer cancelled the contract as Mumbai-based Great Offshore could not supply the rig in time.

The Great Offshore rig, which is being constructed at Bharati Shipyard, was supposed to be provided by 15 May. It could not be constructed in time due to the financial problems and now it will take about five months to complete it.

“We will follow the usual process of issuing a new tender,” said M D Joshi, executive director, chief of drilling services, ONGC. According to an industry insider it would take about four months in getting the rig through the new tender process.

ONGC had earlier planned to hire the shallow water rig for Rs 73 lakh-a-day for five years.

The rig was contracted at a time when there was a global shortage of rigs. ONGC had to hire it at a higher rate at that time.

“The government run oil producer now expects to get the rig at a much lower rate per day and that is why it is going in for a fresh tender,” said an analyst with a Mumbai-based brokerage who did not wish to be quoted.

On Monday, ONGC stock gained 13.7 per cent to Rs 920 a share on the BSE.