In the wake of a nagging energy shortage, state-owned Petrobangla is set to sign deal with a joint venture of US-based ConocoPhillips and Norwegian Statoil ASA within two months to explore hydrocarbon in three deep-sea blocks in the Bay of Bengal.
If gas is found, according to the amended production sharing contracts (PSCs), Petrobangla will purchase gas from the blocks at a rate of $6.5 per 1,000 cubic feet. There are allegations that the revision was made under pressure from the international oil companies operating in Bangladesh.
“One year after the recommendation, we got approval from the [cabinet] committee on Wednesday. Now we are taking preparations to sign a deal with the joint venture,” Petrobangla Chairman Istiaque Ahmad told the Dhaka Tribune yesterday after getting approval from the Cabinet Committee on Economic Affairs.
In its meeting yesterday, the cabinet committee headed by Finance Minister AMA Muhith approved the Energy and Mineral Resources Division’s proposal to pen PSCs with the international oil companies.
“It will be a great scope for oil-gas exploration and production in the deep sea for us,” said the Petrobangla chairman.
“Now, no company is operating at the deep-sea area. The government accepted the US-Norwegian joint venture offer for three blocks; we think it is a great opportunity for Bangladesh,” Ijaz Hossain, a professor at Bangladesh University of Engineering and Technology (Buet) told the Dhaka Tribune.
“I think this will help to explore hydrocarbon that will meet the energy shortage,” he said.
In January 2014, ConocoPhillips and Statoil jointly submitted bidding documents to explore for oil and natural gas in three deep-sea blocks in the Bay of Bengal – 12, 16 and 21 – under the amended Model PSCs 2012.
Interestingly, after six years of negotiation, ConocoPhillips was earlier awarded two more gas blocks in the deep sea through an international bidding process in 2008. But after 2D seismic survey, it pulled out from the blocks.
ConocoPhillips has also recently refused to sign the PSC for oil and gas exploration in shallow sea block number 7.
Petrobangla has recently invited tenders to conduct a marine 2D seismic survey of the sovereign offshore areas of Bangladesh on a non-exclusive multi-client basis for fresh bidding round tenders for new oil and gas blocks.