Date:07/09/2004 URL: http://www.thehindubusinessline.com/2004/09/07/stories/2004090703060100.htm

Back Raha warns vendors against lobbying

Our Bureau

Mumbai , Sept. 6

MR Subir Raha, Chairman and Managing Director, Oil and Natural Gas Corporation Ltd, today warned vendors trying to bring political intervention for securing deals that they could be banned from participating in future contracts.

"There are vendors who continue to violate ethics repeatedly by trying to use political intervention to influence decisions. These are (the same) dealers who complain that ONGC takes too long to reach decisions," Mr Raha said addressing the 11th Indian oil and gas review symposium here.

Mr Raha said the company had suffered delays as a result of this lobbying. The company has projects worth $2 billion in various stages of development, apart from its $1-billion worth deepwater contracts.

ONGC has modified procedures for awarding contracts, most of them based on suggestions from vendors. Yet certain vendors, some working with ONGC for 30 to 40 years, have been violating these by trying to bring in political pressure to influence management's decision. The company holds detailed discussions with bidders before calling for bids. But some contractors keep raising the same issues even after they are discussed. Although Mr Raha did not name anyone, he gave the example of three letters that the management had received from different political sources supporting one bid against another.

"We may have to consider imposing a permanent ban on such dealers," he said.

Mr Raha said the company's investments in enhanced recovery from its existing fields including small and marginal fields should help it increase net production by 0.5 million tonnes a year by 2005-06. By the end of the 10th Five-Year Plan, the net increase will go up to 1 million tonne, he said.

"It's time we pay attention to the smaller fields, considering big finds are getting progressively rarer. We have already set in motion the process of offering marginal fields for development," Mr Raha said.

The company has given out contracts for developing close to 100 medium and small fields. Bids for 19 offshore marginal fields are expected to be called shortly.