Bangladesh is finally set to issue an international tender for oil and gas exploration in 24 blocks in the Bay of Bengal on 10 March after an 8-year hiatus, aiming to enhance domestic energy production.
Bangladesh Oil, Gas, and Mineral Corporation (Petrobangla) will invite 55 international companies for the bid, providing them with six months to submit their bids.
"The bid will be published as a notification in newspapers on 10 March. It will also be sent to embassies. Additionally, we will hold a press conference on 11 March addressing the matter," said Zanendra Nath Sarker, chairman of Petrobangla, on Saturday (9 March).
Maritime boundary disputes with India and Myanmar were resolved in 2012 and 2014, respectively. Despite this, there has been little progress in oil and gas exploration in the Bay of Bengal over the past 12 years. Currently, there are 15 blocks in the deep-sea and 11 in shallow-sea regions.
The most recent tender for offshore oil and gas exploration was issued in 2016. Although a new Production Sharing Agreement (PSC) was signed in 2019, tenders were not initiated. After nearly four years, the cabinet finally approved the new PSC agreement in July of last year. Facilities have been improved significantly to attract foreign companies' interest.
American multinational corporation ConocoPhillips began operations on two deep-sea blocks in 2010, conducting a two-dimensional survey. However, they later discontinued operations as their demand for a hike in gas prices was not met.
Additionally, Australia’s Santos and South Korea’s Posco Daewoo also withdrew from operations after the agreement.
Indian company ONGC is currently the sole company exploring gas and oil in two shallow-sea blocks. Excluding these two, tenders are being invited for the remaining 24 blocks.
Petrobangla stated they have updated the PSC to attract multinational companies. The new PSC does not specify a fixed price as before; instead, the price will be 10 per cent of Brent crude oil, fluctuating with changes in the global market.
"The profit distribution formula between the multinational company and Petrobangla has been revamped this time. Previously, profits were distributed after deducting investment and operation costs. However, now the total revenue from the gas field will be shared between the two companies, with Petrobangla's profit ranging between 35 percent and 65 percent."
A decade after venturing into the sea, the expected outcome, particularly regarding mineral resources, has yet to materialise. Energy experts believe that the solution to the country's energy crisis lies beneath the Bay of Bengal. With Myanmar possessing vast gas reserves adjacent to Bangladesh's blocks, it is believed that new tender opportunities will unveil a realm of possibilities.
