ONGC Close to So­lu­tion for $800m Projects Stuck Post Swiber Crash

ONGC CHAIR­MAN SAYS CO CLOSE TO FI­NAL­IS­ING THE METHOD TO COM­PLETE THE THREE PROJECTS

Resource Digest - - CONTENTS -

State-run ex­plorer Oil and Nat­u­ral Gas Cor­po­ra­tion (ONGC) is close to fi­nal­is­ing ways to com­plete its $800 mil­lion projects stuck mid­way af­ter the con­trac­tor, Sin­ga­pore's Swiber Hold­ings Ltd, col­lapsed last year fol­low­ing an oil slump.

ONGC'S three projects off the western coast faced de­lays af­ter Swiber, the off­shore con­struc­tion and sup­port ser­vices provider for oil and gas field de­vel­op­ment, filed for liq­ui­da­tion in Sin­ga­pore fol­low­ing deep fi­nan­cial trouble.

“We are close to fi­nal­is­ing the method to com­plete the projects,” said Di­nesh K Sar­raf, chair­man at ONGC. “We would be able to bring all stake­hold­ers to­gether. There won't be much de­lay in these projects.” A fi­nal de­ci­sion will be taken by mid­jan­uary, he said.

ONGC is con­sid­er­ing us­ing sub­con­trac­tors to com­plete the C-26 clus­ter de­vel­op­ment project, which is about 90% done, sources fa­mil­iar with the mat­ter said. Terms and con­di­tions for sub­con­trac­tors will re­main the same as be­fore. Swiber was sup­posed to pro­vide sub-sea pipelines and carry out plat­form mod­i­fi­ca­tions in this. ONGC has in the past used sub­con­trac­tors to fin­ish when the con­trac­tor left a project mid­way. Wells have al­ready been drilled in the C-26 clus­ter and com­ple­tion will un­lock about 2.5 mil­lion met­ric stan­dard cu­bic me­ters a day (mm­scmd) of nat­u­ral gas, help­ing en­hance In­dia's do­mes­tic out­put fall­ing for years, sources said.

About 60% of the project at Da­man is com­plete, where five plat­forms and as­so­ci­ated pipelines were to be built by Swiber. A pipeline re­place­ment project at Bom­bay High is also stuck. ONGC may is­sue lim­ited ten­ders for the com­ple­tion of these projects, sources said. All three projects were tar­geted to be com­pleted at dif­fer­ent points of time in 2017 and will now likely get de­layed by at least a few months, sources said.

Swibers trouble started last July when it failed to raise fresh funds and de­faulted on loans.

Af­ter this, it ap­proached a Sin­ga­pore court for wind­ing up the com­pany. The pro­tracted oil down­turn that re­sulted in fewer projects, lower mar­gins and re­duced cash flows has hurt Swiber.

ONGC had ear­lier at­tempted to in­voke Swiber's per­for­mance bank guar­an­tees but fol­low­ing the Sin­ga­pore firm's ob­jec­tion and a ju­di­cial in­ter­ven­tion, it agreed to use the money to fin­ish the projects.

DI­NESH K SAR­RAF, CHAIR­MAN, ONGC

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