ONGC says it cancelled jack-up rig tender due to steep 60% price escalation

New Delhi: Oil and Natural Gas Corporation (ONGC) said it cancelled a tender for hiring jack-up rigs due to an “unusually steep escalation” of about 60 percent in bid prices, citing concerns over pricing reasonableness and competitive integrity. The company said in a statement on April 21 that the day rate in the tender rose from USD 35,606 to USD 56,195, which it described as “significantly beyond the bounds of reasonable and competitive market behaviour.”

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The oil and gas major said that, along with the pricing spike, “the overall bidding pattern and prevailing global conditions… raised legitimate concerns regarding potential collusive practices.”

Decision linked to procurement norms

ONGC said it was “duty-bound to examine these concerns”, which “ultimately led to the decision to cancel the tender.” The clarification was issued in response to a news report on the cancellation, with the company stating that the decision was based on “pricing reasonableness, competitive integrity, and alignment with established procurement norms, without any extraneous influence.”

Emphasis on transparency and fair competition

ONGC said it conducts procurement with “a strong emphasis on transparency, fairness, and the promotion of healthy competition,” and expects bidders to submit “genuinely competitive bids.” It added that it discourages “any form of unfair trade practices, including predatory pricing, collusive bidding, or coordinated actions aimed at distorting market dynamics.”

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Commitment to safeguard public funds

The company said its actions were aimed at “safeguarding organisational interests, ensuring the prudent utilisation of public funds, and upholding the integrity and credibility of the procurement process.” ONGC added that it would continue to encourage “fair, competitive, and responsible participation” while taking steps to “prevent cartelisation and preserve the sanctity of its procurement processes”.

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