Charter hiring of one Well Stimulation Vessel for the

period of 3 years primarily for Mumbai Offshore

Well Services, Mumbai

Oil and Natural Gas Corporation Ltd.

 Tender Details

Type of Tender ICB Open e- tender basis (under two bid system)

Tender No. & P66NC22002 for Charter hiring of one Well Stimulation
Description Vessel for the period of 3 years primarily for Mumbai
Offshore
Sanction Value/PR USD 31,241,425.75 (INR 233.47 Crores) /
no. PR No. 2090055110

Bid validity 31.10.2022

Bid bond validity 30.11.2022

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 Chronology of Tender
Date of publication of NIT : 15.02.2022
Date of Pre-bid conference: 19.04.2022
Date of TBO  : 13.05.2022 (extended 05 times from initial
scheduled date of 08.03.2022) 

No. of Bid received: 01 i.e. M/s Schlumberger Asia Services Ltd. (SASL)
• After techno-commercial evaluation, M/s SASL was evaluated as TA & CA.
• CA approved on 01.07.2022 for opening of price bid of M/s SASL.

• Prior to opening of price bid, M/s SASL confirmed availability of following

vessel out of technically qualified vessel.

Name of bidder Name of Vessel(s) Technically Vessel confirmed by

offered qualified vessel bidder before price
bid opening
M/s SASL , Hong 1. Greatship Maya. 1. Greatship Maya. Stanford Buzzard –
Kong 2. Greatship Manisha 2. Greatship Manisha Foreign Flag Vessel
3. Stanford Buzzard 3. Stanford Buzzard (IMO No. 9533634)
4. OSL Glory 4. OSL Glory

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 Rates Quoted by M/s SASL
The price bid was opened on 06.07.2022. The rates quoted in price bid is as under:

Rate exclusive Rate inclusive of

Particulars
of GST in USD GST in USD
Name of Bidders  Schlumberger
1. Mobilization charges $ 620,000.00 $ 694,000.00
2. Demobilization charges $ 100,000.00 $ 112,000.00
3. Vessel Day Rate $ 77,378.00 $ 86,663.36
4. TOTAL amount for Vessel for 3 years
$ 85,448,910.00 $ 95,702,779.20
including mob & de-mob charges
5. Marine Diesel Consumption per month
(i.e. except the Diesel for Stimulation job) 300
per KL (D)
Total Evaluated Contract Value inclusive
of GST@12% and diesel prices (in USD) $ 110,102,921.75
= ‘SI no. 4' + 36 months x 'D' x P (1 USD
= 79.30 INR as on 05.07.2022), P = Rs (= INR 873.12 Crores)
1,05,734.38 per KL

NOTE: Latest available diesel rate conveyed by Nhava Supply Base, Finance Section vide letter dated 13.06.2022
has been considered for evaluation (i.e. Weighted average cost per KL of HFHSD Ex Nhava Supply Base amount for
the month of May - 2022 = Rs 1,05,734.38 per KL)

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 Analysis of quoted L-1 rates & Price Negotiation

• As compared to LPR of May 2022, L-1 rates for all line items are higher than
LPR rates. And total contract value (inclusive of GST@12% and diesel cost)
of L-1 bidder is 109.04% higher than the LPR.

• As compared to sanction amount, L-1 quoted vessel day rate is 214.35%

higher than sanctioned vessel day rate. In totality, total evaluated contract
value (exclusive of marine diesel cost) of L-1 bidder is 206.33% higher that
the sanction (exclusive of marine diesel cost).

• To explore possibility of obtaining reduction in rates, Price negotiation was

carried out with the M/s SASL. Three rounds of price negotiations were held
on 15.07.2022, 02.08.2022 & 22.08.2022 with the L-1 bidder via Video-
teleconferencing.

• After 03 rounds of price negotiations, M/s SASL reduced only vessel day rate
(exclusive of GST) from USD 77,378.00 to USD 69,200.00.

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 Comparison of revised quoted rates with LPR

LPR based on % variation of

L-1 (M/s SASL) rev. Contract no. L-1 rates w.r.t.
I.   quoted rate post 3rd 9010034708 dated LPR
negotiation 29.05.2022
Unit rate with
Quantity Unit rate with
Sl. No Description Unit (A) GST@12%
(B) GST @12%

1 Mobilization Charges Lumpsum 1 $ 660,800.00 $ 248,974.88 + 165.41 %

2 Demobilization Charges Lumpsum 1 $ 112,000.00 0 --

Vessel Day Rate: Charges for the

3 vessel, its operation and maintenance Day 1095 $ 77,504.00 $ 36,366.40 + 113.12 %
as per scope of work of the tender.

I.4 TOTAL for Vessel inclusive of GST@12% in USD = $ 85,639,680.00 $ 40,070,182.88 + 113.72 %

Marine Diesel Consumption per month (i.e. except

5 KL 300 262.5 + 14.29 %
the Diesel for Stimulation job) (D)

Total Diesel Prices in USD = (36xDxP)/79.30

 6 $ 14,400,142.55 $ 12,600,124.73 + 14.29 %
P = Rs 1,05,734.38 per KL

Evaluated Total Contract Value inclusive of GST@12% and

III. $ 100,039,822.55 $ 52,670,307.61 + 89.94 %
diesel prices (in USD) = ‘I.4’ + ‘6’

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Comparison of revised quoted rates with sanction

L-1 rev quoted % variation

Sanction exclusive of L-1 rates
  rate post
I. of diesel cost w.r.t.
negotiation
sanction

Sl. Quantity
Description Unit (A) Unit rate with GST Unit rate with GST
No (B)

1 Mobilization Charges Lumpsum 1 $ 660,800.00 $ 387,960.95 + 70.33 %

2 Demobilization Charges Lumpsum 1 $ 112,000.00 $ 665,075.92 - 83.16 %

Vessel Day Rate: Charges for

the vessel, its operation and
3 Day 1095 $ 77,504.00 $ 27,569.30 + 181.12%
maintenance as per scope of
work of the tender.

TOTAL for Vessel inclusive of GST@12% (In Numbers) in

I.4 $ 85,639,680.00 $ 31,241,425.75 + 174.12%
USD exclusive of diesel cost =

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 Reasonability of Rates

1. From tables shown in previous two slides, It is noted that as compared to

LPR of May 2022, L-1 rates for all line items are very high. Also, total
contract value (inclusive of GST@12% and diesel cost) of L-1 bidder is 90%
higher than LPR of May 2022.

2. As compared to vessel day rate in sanction, L-1 quoted vessel day rate is
181.12% higher. In totality, total evaluated contract value (exclusive of
marine diesel cost) of L-1 bidder is 174.12% higher that the sanction
(exclusive of marine diesel cost).

3. Since, single bid was received, market trend can’t be established.

4. Hence, as compared to LPR and sanction, revised L-1 rates post negotiation
is very high and not reasonable.

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 Urgency of WSV requirement

1. Vide Disha file no. 1018376 dated 18.08.2022 & 14.09.2022, WS, MR sought
comments from Assets for the urgency of the requirement of the stimulation
vessel for Mumbai offshore.

2. All three Assets have provided their comments on 20.09.2022 stating that
non-availability of sufficient number of stimulation vessels is negatively
affecting well stimulation jobs leading to significant oil loss and production
targets. Hence, additional stimulation vessel is urgently required.

3. In order to enhance competition, TBO date was extended 05 times and

ample opportunities were given by ONGC for wider participation of the
bidders. However, other prospective bidders like M/s Halliburton, M/s Baker
& M/s AlMansoori had not submitted their bid. Hence, there is lack of
competition in the tender.

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 Urgency of WSV requirement

 Number of stimulation vessels as well as the availabilities days of the

stimulation vessels are of critical requirement of the Assets for sustaining as
well as augmenting oil & gas production. Availability of stimulation vessels is
critical to support increased exploratory activities for reserve accretion and
exploration activities are related directly to the drilling rigs operations as well
as testing time of the well. Hence, non-availability of the stimulation vessel
will have its impact on the drilling rig waiting and increased testing time.
Impact of shortage of vessel is indicated as under:
No. of Stimulation Jobs (Both with vessel and standalone rig /
Total No. of platform based without vessel)
Year Stimulation Jobs Target Actual % of Achievement
with vessel

2016-17 1026 1334 1344 100.75

2017-18 1186 1350 1376 101.93
2018-19 552 1350 727 53.85
2019-20 795 1445 1006 69.6
2020-21 748 1687 988 58.6
2021-22 762 1879 916 48.75

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 Urgency of WSV requirement
 The availabilities and number of WSVas well as the number of stimulation jobs
over the last four years were very less and thereby the planned workloads of
stimulation jobs of the Assets could not be fulfilled. Cognizance is given to
stimulation workloads for the next five years. Availabilities of WSV is poor over
the last 6 years and led to under achievement in fulfilling the Assets’ requirement
of stimulation jobs which in turn were directly linked to the oil & gas production.

 WS, MR noted the status of the present stimulation vessel availabilities in the
offshore. As per the information shared, only one WSV i.e. Samudra Nidhi is
operating in the field. The vessel is more than 35 years old and is facing several
technical issues related to thrusters, crane etc.

 Further, the stimulation vessel Lewek Altair under contract 9010033762 is still
under temporary dehiring since 10th December’21 due to various technical,
statutory compliance and legal issues between vessel owner and contractor.
Performance notice has been issued to the contractor. The contractor in its reply
has informed ONGC that the legal issue has been resolved and vessel shall be
in Nhava likely by November, 2022.

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 Urgency of WSV requirement

 As per input from the Assets for the delay in availability of stimulation vessel,
considering the 3 months for cancellation of the present tender and re-
tendering, significant production loss is projected. However, the re-tendering
process may take even upto 4-5 months and thereby further multiplying the
projected loss in terms of annual production of crude and monetary loss.

 Further, LPR of the awarded contract (9010034708 dated 29.05.2022) may

not be compared with the market trend of vessel rate as that being a roll over
contract and the contractor had the advantage of having that vessel already
in an ONGC contract.

 It is observed that total rates of M/s SASL (USD 100,039,822.55 inclusive of

GST@12% and diesel cost) in present tender is 25.08% lower than the rates
quoted by them (USD 133,537,766.30 inclusive of GST@12% and diesel
cost) who was L-2 bidder in last tender no. P66NC21012.

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 Vessel Day rate in previous contracts

 In case of hiring of vessel, vessel day rate constitutes major part of total contract
value, the details for vessel day rate (exclusive of taxes and duties) in previous
contracts are shown below:
80,000.00 69,261.30
58,728.19
60,000.00 50,099.68
40,000.00 35,000.00 32,470.00

20,000.00 16,178.14 16,178.14

0.00

Siem Marlin (NOA dated 22.11.2018)

Ramya (NOA dated 03.04.2014)

Ocean Turquoise (NOA dated 07.04.2018)

Lewek Altair (NOA dated 20.03.2018)

Ocean Turquoise (NOA dated 29.05.2022)

Vestfonn (NOA dated 25.03.2010)

Vestfonn (NOA dated 08.05.2014)

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 Urgency of WSV requirement
 In case of cancellation of instant tender and re-tendering, ONGC may lose 3-4
months and following situation may arise.
• Reduced rates compared to the instant tender rate
• Increased rates compared to the instant tender rate
• No participation of vendors
• Single bid scenario
 Cancellation of the instant tender will definitely lead to further delay in
mobilization of the stimulation vessel in the offshore and Mumbai offshore Assets
will be impacted as noted from the comments of the three assets above for the
urgency of the stimulation vessels.
 After 3rd round of price negotiations, final reduced total evaluated contract value
(inclusive of GST & exclusive of diesel rates) offered by M/s SASL is 113.72%
higher than LPR of May 2022 and 174.12% higher than sanction. Thus, rates
are still not reasonable in comparison to LPR and sanction.

 Hence, considering the urgency of requirement of stimulation vessel as

conveyed by all the three Assets, there is no other option left except for
award of contract.

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 WSV Status

 Samudra Nidhi: Vessel is in operation. It will undergo drydock in 2023-24 for 100
days. Present class fitness validity is till 19.08.25.

 P66NC21012: Vessel Ocean Turquoise: LOA placed on 29.05.22 with

mobilization of 180 days. Expected mobilization by November’22.

 P66NC17006: Vessel Lewek Altair: Contract awarded on 20.03.2018. The

scheduled date of mobilization of vessel was 15.09.2018 and it was mobilized by
the Contractor on 29.09.2021. Vessel is under temporary dehiring from
10.12.2021 due to various technical, statutory compliance and legal issues
between vessel owner and contractor. Performance notice has been issued to
the contractor. The contractor in its reply has informed ONGC that the legal issue
has been resolved and vessel shall be in Nhava likely by November, 2022. DG
shipping permission received for 6 months extension of compliance of revised
IBC codes for carriage of noxious fluid. Only one covered life boat can be
installed against the required norm of 2 life boats.

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 WSV Status

 P66NC22003: Long term 9 years charter hiring WSV Tender in process. 1 st round
clarification letter issued with cut-off date of 31.10.2022. Mobilization period 18
months. Two bidders (M/s HOSI & M/s SASL) participated. Considering
finalization of tender by December’22, expected mobilization is in Q2- 2024-25.

 P66NC22004: 3 years charter hiring of only Acid facilities WSV with short
mobilization of 90 days. Prebid held on 06.10.2022. Three prospective bidders
(M/s SASL, M/s HOSI & M/s Hoger Offshore) participated. All bidders requested
for mobilization period between 150 – 270 days. Record notes as a sequel to
pre-bid conference uploaded on e-tender site.

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 Financial Implications & Additional Sanction

Description Amount in USD

Total contract value for 3 years (Incl. GST@12% & with diesel cost) $ 100,039,822.55

Total contract value for 3 years (Incl. GST@12% & without diesel cost) $ 85,639,680.00

Expenditure Sanction/ PR value (Incl. GST & without diesel cost) * $ 31,241,425.75

Additional Sanction required $ 54,398,254.25

* The sanction is exclusive of diesel expenditure. For the sanction of diesel,

separate sanction is obtained by OLG, MR.

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 APPROVAL SOUGHT

Approval of EPC is sought for following:

To award contract to L-1 bidder M/s Schlumberger Asia Services

Limited, Hong Kong for Charter hiring of one Well Stimulation Vessel
(“Stanford Buzzard” IMO No. 9533634 - Foreign Flag) for the period of
3 years primarily for Mumbai Offshore, at their revised quoted rates,
based on the urgency of the requirement in the Mumbai offshore and
the impact of non-availabilities of vessel in oil & gas production as per
the comments received from the three Assets even though the quoted
rates by the bidder after three rounds of negotiation is still higher as
compared to LPR/sanction.

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 Thank you

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