Dhaka Bureau: After approval of the new model PSC, Petrobangla has invited international tenders for oil and gas exploration in 24 blocks of the Bay of Bengal. The tender notice was published on Petrobangla’s website and various English newspapers on Sunday (March 10). The tender has been invited for oil and gas exploration in 9 blocks in the shallow sea and 15 blocks in the deep sea. Bids have been asked to be submitted to the specified address by 1 p.m. on September 9. After 1 hour on that day, the tender will be opened in front of the selected representatives.
The Bangladesh portion of the sea is divided into a total of 26 blocks. Of these, 15 are in the deep sea, and 11 are in the shallow sea. The Indian company ONGC is currently carrying out exploration work in two blocks. Tenders have been invited for the remaining 24 blocks.
Already, some top companies, including US companies Chevron and ExxonMobil, have contacted the government with investment proposals. This time, 55 international companies can participate in the tender.
Chairman of Petrobangla, Janendra Nath Sarkar, said, ‘This model PSC has been made more attractive and investment-friendly than before. After the call for tenders, we will conduct extensive publicity. I hope to be able to involve the most qualified and efficient organizations in the search work.
Petrobangla called the last tender in 2016 for oil and gas exploration in Bangladesh’s sea area. A new Production Sharing Agreement (PSC) was then entered into in 2019, but tenders were not called. The government last July gave final approval to the new PSC, which has increased facilities to attract foreign companies.
The 2019 PSC pegged the price of gas per 1,000 cubic feet at $7.25 in the deep sea and $5.5 in the shallow sea. No price has been set for this year’s PSC. The price of gas has been fixed at 10 percent of the price of crude oil. This price will be determined based on international market rates.
The ratio at which the block leasing company will share the profit with Petrobangla has also been changed in the new PSC.
Bangladesh’s maritime boundary disputes with India in 2012 and with Myanmar in 2014 were settled after a long legal battle in international courts. Then, in 2016, tenders were called for offshore oil and gas exploration.
At that time, the companies did not show much interest as the price of oil and gas fell in the international market and the profit share was not attractive. After that, the government started the work of renewing the model PSC. But then came the COVID pandemic, then the shock of the Ukraine-Russia war. All in all, the oil and gas market is also becoming unstable. But now the people concerned think that an environment of oil and gas exploration has been created in the Bay of Bengal.
Conoco Phillips won two deep-sea blocks in 2010 through tenders called in 2008. They conducted a two-dimensional survey but later left the work as the demand for an increase in gas prices was not met. Similarly, Australia’s Santos and South Korea’s Posco Daewoo left after the deal. Among them, Daewoo works in the deep sea block number 12. Currently, the Indian company ONGC is the only one exploring two blocks in the shallow sea.
Bangladesh’s two neighboring countries, India and Myanmar, have achieved great success in exploring the deep Bay of Bengal within their borders. Earlier this year, ONGC found large oil and gas reserves in the deep sea at a distance of 35 km off the coast of Andhra Pradesh. Another neighbor, Myanmar, has already started extracting gas from two gas wells named Mia and Shoye near the border with Bangladesh.
