The Telegraph
Since 1st March, 1999
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Review of oil hunt tender rules

New Delhi, April 13: Oil and Natural Gas Corporation (ONGC) and the Central Vigilance Commission will examine the tendering process for major oil exploration contracts so that cutting-edge technology can be inducted, especially for hunt in the deep sea areas.

ONGC chairman Subir Raha is reported to have informed Central Vigilance Commissioner P. Shankar that the existing system, which provides for spelling out only the minimum requirements for hiring rigs for oil exploration, does not give due weightage to cutting-edge technologies. ONGC has to hire that firm which puts in the lowest bid (L1) even though it may not have state-of-the-art equipment.

Shankar, who has put in a stint as secretary in the ministry of petroleum and natural gas, has a good grasp of the hydrocarbon sector. He has reportedly agreed to study the issue for possible improvements. A team, comprising vigilance commission officials as well as senior ONGC officials, is expected to brainstorm over the issue.

The ONGC top brass feels that there has to be a provision enabling the oil major to deploy cutting-edge technology even if it costs more. They point out that private firms are at an advantage as they can use the best technology, unlike ONGC which is bound by very stringent restrictions in the tendering process.

However, it is a delicate issue as some transparent mechanism has to be in place to ensure that national interest is not compromised in these multi-million dollar contracts. ONGC has developed its own rig, Sagar Vijay, to undertake deep sea drilling in waters of up to 900-metres depth. However, beyond this depth it has to hire rigs.

Modern rigs also have advanced data processing systems on board which can give quicker and more accurate results.

ONGC is expected to hire two rigs soon for deep-sea drilling in the oil exploration blocks that it has been awarded under the New Exploration Licensing Policy.

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