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The Oil and Natural Gas Corporation Ltd (ONGC), has written to the Union Steel Ministry expressing concerns over possible “idling of its rig” in the Cauvery off-shore in the absence of getting required casing pipes for drilling two ultra deep wells. The value of these specialised items are said to be close to ₹400 crore. Accordingly, the country’s exploration and production giant has sought exemption from existing domestic sourcing norms and wants to import these.
In its letter addressed to one of the senior bureaucrats in the Ministry, and accessed by businessline, ONGC said, there are no Indian players who make such specialised steel items (called casings) required for its exploration activities. It has requested for “exemption from the provisions of revised steel policy” which gives preference to domestically manufactured iron and steel products in government procurement.
“Considering the fact that there is no domestic manufacturer available and these casing pipes have long delivery periods, it is requested to provide us the approval for exemption of ......casing pipes at the earliest, so that procurement action can be initiated. This will ensure continuation of ONGC’s deep water exploratory activities without idling of any resources,” the letter by one of its EDs says. .
The company would require these casings for two ultra deep (oil) wells of Cauvery off-shore, planned to be drilled in December. Various resources for drilling these ultra deep exploratory wells are being mobilised; and these include the deep water drilling rig keeping the December deadline in mind. “Non-availability of casings would lead to idling of the rig and other resources, which may result in heavy financial losses for ONGC,” the letter adds.
Meeting with Ministry officials
ONGC’s requirements include premium casing and accessories (of different specifications) worth ₹270 crore (and amounting to 15,656 tonnes in volume); casings with premium threads worth of ₹100 crore (1,860 tonnes in volume); and another set of specialised casings worth ₹15 crore. Officials said, approvals are awaited across majority of the items.
As per the letter, approvals were sought (across categories) in July 2022, December 2022 and in March 2023. Earlier this year (in March and June) a Grievance Committee meeting chaired by a senior Steel Ministry official approved the proposals. “However, approval to procure the required casing pipes through ICB tender (international competitive bidding) is still awaited from the Ministry,” the letter said.
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