Hardy delays PY-3 floater tender

Hardy Exploration & Production India (HEPI) has further delayed the bid submission deadline until mid-February for a floating production vessel required for its PY-3 field in the Cauvery basin off India’s east coast.

Sources close to the tender process told Upstream that technical and commercial offers for the floating production vessel are now due for submission on 17 February, following the most recent extension by the operator.

Bids were initially expected to be submitted in December but Invenire Energy, which now operates PY-3 after its takeover of HEPI, has delayed the process by almost two months.

Another source familiar with the project says it is unlikely the operator would further extend the bid submission deadline.

“There were extension requests from multiple contractors. And we believe that this is the last such extension provided by Hardy,” the source said.

HEPI had issued a tender for chartering a floater for the PY-3 field during the fourth quarter of last year.

The operator is offering a firm charter of five years, with an option to extend that period by an additional five years, sources said.

Up to 20 contractors were issued tender documents by HEPI, with the operator aiming to mobilise the vessel by middle of this year.

Those understood to have received tender documents include Malaysia’s MISC and Bumi Armada, Indian players Aban Offshore, Asian Oilfield Services, Shapoorji Pallonji Oil & Gas, Greatship and Dynamic Drilling, US-based Oceaneering and Helix Energy Solutions, Norway’s Sevan Marine and Fred Olsen, Bluewater and BW Offshore.

Some other players are also expected to be in the fray.

However, the actual number of bidders is likely to be lower, one source pointed out.

HEPI requires a floating production vessel capable of processing up to 20,000 barrels per day of liquids and handling 3.5 million cubic feet per day of gas.

The various options include either a combination of a floating production unit and floating storage and offloading unit, a floating production storage and offloading vessel or a mobile offshore production unit.

Invenire Energy, which now operates and owns a 39% stake in the PY-3 field after its takeover of Hardy, is aiming to restore oil production within months from the offshore field, which was shut in 2011.

Along with Hardy’s 18% stake in PY-3, Invenire also owns an additional 21% stake in the field through its acquisition of Tata Petrodyne.

In addition to Invenire Energy, the other stakeholders in the offshore asset include India’s state-controlled Oil & Natural Gas Corporation on 40% and Hindustan Oil Exploration Company holding the remaining 21%.

UK-based Hardy Oil & Gas subsidiary HEPI was acquired by Invenire in October for $8.75 million.

The PY-3 shallow-water field was shut in 2011 as the government withheld approval to renew a contract for a leased floating production system. The joint venture had previously submitted a full-field development plan, which the partners supported, but it was not approved at that time.

Industry sources said the Indian government last year approved the full-field development plan for PY-3 and has also extended its production sharing contract for a 10-year period.

Initially the PY-3 production sharing contract was due to expire by end of 2019, but it will now be valid for an additional 10-year period.

PY-3 was initially capable of producing between 4000 and 4500 bpd of oil, but the new full-field development envisages output reaching 11,000 bpd by drilling additional development wells, sources suggested.

The PY-3 field is located off India's east coast, 80 kilometres south of Pondicherry, and lies in water depths ranging between 40 metres and 450 metres.