re: clough wins big indian job and considers clif Clough wins...

re: clough wins big indian job and considers clif Clough wins big Indian job and considers Cliff Head boycott

Alfean Hardy, Malaysia, Brendan Egan, Steve Rotherham


Friday, November 19, 2004
TOWARDS the end of what has become a difficult year Clough has had a big win, landing an as-yet-unreported US$128 million contract to build offshore platforms and pipelines in India. But the firm is also considering boycotting the Cliff Head project due to the involvement of BassGas partner and adversary AWE.

Clough group manager corporate affairs Peter Collins confirmed Clough Projects International had received a letter of intent from the British Gas-led Panna, Mukta and Tapti (PMT) consortium and is about to be awarded a US$128 million contract to construct pipelines and three well platforms in these fields off the coast of Mumbai, India.

"We've received the letter of intent and we're pretty damned close to signing the contract," Collins told EnergyReview.Net this morning.

The PMT consortium will undertake an infill-drilling program of up to 18 wells in the Panna-Mukta oil and gas fields and a four-well re-completion drilling program in the Tapti gas field.

Two new platforms, PH and PJ, will be built in the north-west and south-west of the Panna field along with pipelines. A third platform, STD, will be built in the South Tapti field. Clough has until mid 2006 to complete the job.

Back in Australia, the BassGas dispute has cast a long shadow with Clough now reconsidering its possible involvement in the Cliff Head project located in the company's backyard.

This Perth Basin project consists of an unmanned offshore platform, six production wells and two water injection wells located in Commonwealth waters, an onshore processing facility, onshore and oil and water pipelines and oil transport to Kwinana and/or Geraldton.

The job seems tailor-made for Clough, given that the company is a Perth-based contractor with enormous experience in similar projects.

But one of the Cliff Head partners is Australian Worldwide Exploration (AWE) which is also a partner in the BassGas joint venture. Clough and BassGas have accused each other of failing to fulfil contractual obligations and each party is claiming damages from the other party.

Clough sources say a Clough-led bid would possibly be blackballed by AWE, which along with Origin Energy, has been speaking out publicly against Clough.

AWE is a non-operating partner in both the BassGas and Cliff Head projects, but it has publicly backed Origin – the BassGas operator – in its criticisms of Clough.

"There's a lot of ill-feeling on both sides," Collins said.

"We're talking to the [Cliff Head] operator, Roc Oil and considering our options."

He said it was possible that Clough would be involved in Cliff Head via Mermaid Marine. Clough is a significant shareholder in Mermaid and Mermaid could offer Clough some work as a subcontractor.

Given the unseemly public dispute has already threatened to impact other Australian oil and gas projects, one possible outcome is to remove the Origin project manager who to this date has remained unnamed but has been publicly scarified.

There are now 12 days until the stakeholders become forced to go to arbitration and therefore lose control of the process. A team of 'cleanskin' project leaders with no baggage would then have a clear mandate to resolve the dispute which has severely impacted the reputation of Origin Energy, undertaking what must be remembered is their first major offshore development.

In other news, Clough business development manager Ian Ripley resigned last week, leaving to undertake consultancy work.

"He's one of 20 or 30 business development managers, so it's no big deal," Collins said.

But given Ripley's title was group manager business development this seems unlikely. ERN asked Collins if Ripley and Clough parted ways on good terms.

"I wouldn't say that," he said.

"But you know what it's like nowadays. When someone resigns you get them out as quickly as you can."

He denied that Ripley's resignation had anything to do with the BassGas dispute.