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ONGC gets single bid from ?Schlumberger for oil field production upgrade

News Agencies | Updated on: 4 March 2019, 16:48 IST

State-owned ONGC has received just one bid from US oilfield-service company Schlumberger Ltd for its ambitious pilot to raise output from ageing oilfields through the infusion of technology, sources with direct knowledge of the development said.

India's top oil and gas producer plans to hire international oil service companies for the first time to raise output from its mature oilfields. Last year, it had shortlisted Schlumberger, Halliburton and GE subsidiary Baker Hughes for raising output from Kalol field in Gujarat and Geleki field in Assam.

At the close of bids, only Schlumberger made a financial bid for Geleki field, sources said.

No bid was received for Kalol field.

The service providers will be paid a fee for raising output beyond an agreed baseline production.

Sources said Schlumberger has sought certain deviations from the tender conditions, and Oil and Natural Gas Corp (ONGC) is discussing them with the company.

ONGC top brass, they said, are keen to conclude a contract with Schlumberger soon to get the project going.

Based on experience of the Geleki bidding, the company plans to bring out similar bidding for few other ageing oilfields.

ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi's target of cutting import dependence by 10 per cent by 2022. India currently imports over 83 per cent of its oil needs.

Originally, ONGC had on December 7, 2016, signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output.

Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them in 2017 on fears of courting controversy for handing fields on nomination basis.

Thereafter, the company in June 2017 floated an expression of interest (EoI) from service providers for undertaking production enhancement.

Thereafter Schlumberger Asia Services, Halliburton Offshore Services Inc and Baker Hughes Singapore PTE Ltd were shortlisted as firms were meeting pre-qualification criteria.

Bids were originally sought by May 25, 2018, but saw several extensions and final bids came in a couple of months back, sources said.

The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to investing in capital expenditure and operating expenditure to increase production from the existing baseline output.

A tariff will be paid in USD per barrel of oil and USD per million British thermal units for gas for any incremental hydrocarbon produced and saved over the baseline.

The baseline will be prepared by ONGC and vetted and certified by a third party of international repute.

All the oil and gas produced will belong to ONGC and the service provider arrangement is being entered into to get the best technology available, sources said.

Besides Schlumberger, Halliburton and Baker Hughes, ONGC was also in talks with Weatherford International.

Sources said based on the experience of Kalol and Geleki, the PEC model may be extended to other onshore fields.


First published: 4 March 2019, 16:48 IST