CAG hauls up ONGC for hiring RIL drilling rig without bidding

ONGCNEW DELHI: The Comptroller and Auditor General (CAG) has hauled up state-owned oil explorer ONGC for hiring a deep sea drilling rig from Reliance Industries without calling for competitive bids on ground that are untenable.

CAG, in a report table in the Parliament today, said ONGC “deviated from the standard tendering procedure and hired a rig viz Dhirubhai Deepwater KG-1 (DDKG-1) from RIL without calling for competitive bids for a period of four years on untenable grounds”.

ONGC had in May 2009 hired DDKG-1 from RIL for four years ending July 2013 without calling for competitive bids at an operating day rate of USD 495,000 for first 180 days and at USD 510,000 from 181st day onwards.

The effective day rate worked out to USD 563,488.

CAG said the company in December 2008 projected a requirement of rig capable of drilling in ultra deep water (water depth of 10,000 feet) by December 2010 to meet its work commitment in exploration block it had won under NELP rounds.

“On the plea that no ultra deep water rig was available with it before December 2010, the company (ONGC) hired the rig from RIL,” it said in the report for 2010-11 fiscal.

The rig, CAG pointed out, was in fact hired by RIL from Deepwater Pacific-1 Inc in October 2007 for a period of five years commencing July 2009 and ending July 2014.

“Upon RIL’s willingness (in March 2009) to share the rig with the company (ONGC), the latter obtain the same rig from RIL under a tripartite assignment agreement on the same rates, terms and conditions as were applicable to RIL,” it said. -PTI

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