Oil and Natural Gas Corp (ONGC) has extended until January 3 a deadline to accept bids from private players interested in operating its 64 small producing fields.
The original deadline was December 20 for bids that were invited in June. ONGC has met several concerns raised by potential bidders in pre-bid meetings, although it has left some unaddressed. Contractors will now have more time to present performance bank guarantees and field development plans, and can offer lower performance guarantees than initially proposed, according to the amended tender documents.
A contractor can now exit a field before three years by forfeiting the full performance bank guarantee.
Initial provisions provided for an exit only after three years.
ONGC, however, has not agreed to requests by some potential bidders to adjust the baseline production forecast in the future.
“Baseline production is estimated considering the historical decline rates and current field inputs. The same is duly vetted by the third party of international repute,” ONGC said in its reply to pre-bid queries. “As per the terms of the contract, it is non-negotiable and the contractor is obligated to maintain the same during the contract period.”
ONGC has also not acceded to a key demand by potential bidders – that they get a share in the baseline production.
Private operators will bear all new costs but receive a share only in the additional production beyond the baseline output.
Source: Economic Times