State-owned (ONGC) is planning a major overhaul of its western offshore supply chain operations by outsourcing the entire logistics ecosystem to a single integrated service provider, replacing the current multi-vendor model that reportedly costs the company around $600 million annually.
Speaking to ET Infra, Pankaj Kumar, Director (Production), ONGC, said the company intends to focus on its core exploration and production business while leaving logistics management to specialised operators.
“The thought is big. It’s not our expertise. We need output,” Kumar said.
As part of the initiative, ONGC has floated an Expression of Interest (EoI) to identify a partner capable of delivering integrated end-to-end marine logistics, fleet management and shore base management services for its key western offshore assets.
The proposed outsourcing covers ONGC’s major offshore producing hubs including Mumbai High, Bassein & Satellite (B&S), and Neelam-Heera complexes located 30 km to 180 km off the Mumbai coast. Operations are supported through supply bases at Nhava Sheva and Pipavav ports and cater to 68 offshore locations, including rigs, platforms, FPSOs and MSVs.
ONGC currently operates a large marine fleet comprising 27 offshore support vessels, 9 platform supply vessels and 21 anchor-handling tug supply vessels.
Kumar clarified that ONGC will continue to handle strategic procurement activities such as rig hiring, while operational logistics could be streamlined significantly under a single operator model.
“Today I am running over 50 offshore support vessels. It’s quite likely that some efficient operator may come and do it with 40, that’s the value I am looking at,” he said.
The western offshore logistics network manages substantial monthly cargo volumes, including 14,000 metric tonnes of deck cargo, 22,000 metric tonnes of bulk supplies such as cement and barite, 25,000 kilo litres of diesel, aviation fuel, potable water, as well as rig moves, towing, anchor handling and helicopter-related vessel operations.
Under the proposed contract, the selected vendor will manage warehouses, paved yards, transportation, customs clearance, port coordination, reverse logistics, weighbridges, cargo scanners, and liquid mud and bulk handling plants. The contractor will also oversee the planning and scheduling of offshore support vessel operations to ensure uninterrupted offshore production activities.
ONGC indicated that the initial contract could be awarded for a period of three to five years to attract capable global logistics operators.
Industry participants have welcomed the move, describing it as a globally accepted model aimed at cost optimisation and operational efficiency. However, some experts suggested that ONGC should consider phased outsourcing rather than a complete transition in a single step.
Reliable and efficient logistics remain critical for sustaining offshore exploration and production activities and ensuring India’s energy security.
(source: ET Infra)