$11 billion offshore investment-II: Who is going to get the best price?
Jun 26: Also projected here are revenues for subsea product companies going up to 2021 8Revenues are still in free fall, pushing companies further into a cash crunch 8There is also an annual projection of numbers of trees which have actually gone upstream so far since 2012 and how does the projection look going up to 2021. 8The projections show that the bottom may not have been reached in 2018 8These projections are crucial to understand how the subsea market is going to behave and when is a good time to place orders. 8Both ONGC and RIL-BP have announced their first gas deadlines from their investments, so orders will have to be placed sooner than later. 8The two parties will have different price determination policies even though both are circumscribed by PSC bidding conditionalities -- which require at least three bidders for each tender -- unless special sanction is sought from the management committee for placing orders on different basis. 8So if ONGC has gone through a competitive bidding process, RIL-BP cannot claim an exception to the rule. 8Eventually, when pricing matrices are compared, it will be interesting to watch who evinces the best price. 8As of now, because equipment and services costs are falling rapidly, the advantage goes to RIL-BP as they can force suppliers to quote lower in a falling market than the benchmarks which will be set earlier by ONGC. Click on Reports for more