Onshore drilling contractor accused of ‘failure to commence services’

State-owned exploration and production major ONGC is believed to have blacklisted one of its largest onshore drilling contractor Shiv-Vani Oil and Gas Exploration Services Ltd for two years.

A listed entity, Shiv-Vani claims to have already been awarded with nearly Rs 3,000 crore worth of tenders, under implementation.

The Delhi-based company posted a turnover of Rs 209 crore against Rs 1,484 crore in 2011-12.

The company’s shares were up by four per cent to Rs 55.50 on Wednesday.

According to documents in possession with Business Line, ONGC firmed up its decision for “banning of business dealings with Shiv-Vani for two years from the date of the order (January 28, 2013)” vide office memo (file ref EOA/MM/Surface/Compressor/2012).

The action was taken following Shiv-Vani’s alleged “failure to commence the services” (installation of compressors at Kankinada processing facility) as per the terms and conditions stipulated by a tender awarded in August last year.

Prem Singhee, Chairman and Managing Director, Shiv-Vani, however, denied any black-listing by ONGC.

“The contract in question is of very small value of Rs 50-60 lakh. There was some delay by the sub-contractor (of Shiv-Vani). I am confident that ONGC will extend the timeframe for work completion and the issue will be settled,” he said.

“We are the single largest (on-shore) contractor of ONGC implementing Rs 3,000 crore worth of tenders. And, we share excellent relationship,” Singhee added.

Track record

Interestingly, this is not the first time Shiv-Vani is accused for delay in tender implementation.

In 2008, the company was awarded a Rs 1,610-crore order for supply of eight onshore rigs in ONGC assets across the country by January 2009.

However, as in June 2009, ONGC imposed five per cent penalty on Shiv-Vani for its failure to meet even the extended timeline for rig mobilisation.

Shiv-Vani was also the contractor for the Rs 900-crore integrated CBM development project of ONGC in Jharia.

The project was abandoned midway.

While Singhee blamed ONGC for the failure of the Jharia CBM project, he admitted the delay in rig deployment against the 2008 contract of ONGC.

Entry in coal

Apart from oil sector, Shiv-Vani also has a presence in coal handling sector.

The company is currently implementing a Rs 200-crore contract to set up mechanised coal loading solutions at Talcher coal mines of Sambalpur-based Mahanadi Coalfields Ltd (MCL).

According to sources, Shiv-Vani was also short-listed for another similar contract by MCL.

However, the tender was finally cancelled due to alleged discrepancies in Shiv-Vani’s bid proposal.

(This article was published on February 13, 2013)
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