In a significant move to boost oil and gas exploration in the Bay of Bengal, Bangladesh has announced a tendering process for 24 blocks.
The country aims to tap into its offshore potential, focusing on 24 deep and shallow-sea blocks to harness valuable energy resources and strengthen the economy.
Experts are hopeful of a huge reserve of gas in the Bay, considering the exploration work of India and Myanmar and the fact that 90% of the offshore blocks have not been explored yet.
The exploration journey dates back to 1974, when Bangladesh first floated an offshore exploration tender, leading to the signing of a Production Sharing Contract (PSC) with six companies.
The initial discovery of a gas reserve in Kutubdia by the US-based Union Gas Company (Unocal Corporation) marked a promising start.
However, the assassination of Bangabandhu Sheikh Mujibur Rahman on August 15, 1975, the aftermath of the assassination and the political turmoil led to the withdrawal of all companies involved.
Despite challenges, Bangladesh continued its pursuit of offshore exploration. In 1988, a tender was called, but no companies expressed interest.
Significant progress was made in 1994 when the Australian company Santos Oil was awarded a contract to dig a well in the Magnama structure (Block-15) under the Production Sharing Contract (PSC) 1994.
Cairn Energy, a British oil company, discovered the Sangu gas field (Block-16) in the Bay of Bengal in 1996.
Gas production from the field, jointly managed by Cairn and Santos, commenced in 1998. In 1999, Cairn struck a deal with Shell Oil, another British company, to transfer operatorship of blocks 15 and 16.
In 2008, the US-based ConocoPhillips won exploration rights for deep-sea blocks 10 and 11, with the exploration process unfolding over the subsequent years.
The resolution of maritime disputes with India and Myanmar in 2012 and 2014 paved the way for further advancements.
However, challenges persisted, with Santos serving notice on Petrobangla in 2012 about withdrawing its operation from Block 15 (Sangu gas field). The field was permanently shut down in October 2013 due to uncommercial production levels.
The journey continued with India’s ONGC Videsh Ltd, in consortium with Oil India Ltd (OIL), signing a PSC for two shallow offshore blocks SS-04 and SS-09 in February 2014.
The exploration landscape witnessed changes, including Posco-Daewoo Corporation, a Korean Posco and Daewoo joint venture, signing a PSC in December 2016, only to relinquish the block in December 2020.
In September 2021, ONGC initiated an exploratory drilling campaign at Maheshkhali Island, setting the stage for a renewed focus on offshore exploration.
The recent cabinet approval of a new PSC in July 2023 reflects the government’s commitment to advancing the sector.
March 10, 2024, marks a pivotal moment with Bangladesh calling tenders for 24 blocks, signalling its intent to harness the untapped potential in the Bay of Bengal and secure a sustainable energy future. Such exploration endeavours are poised to contribute to the nation’s economic growth and energy security.
Prof Dr Badrul Imam, honorary professor at the Department of Geology of Dhaka University, said there are all the necessary elements for the Bay of Bengal to have gas, with 90% of the areas yet to be explored. No drilling has ever been carried out based on 2-D or 3-D surveys.
“So far, gas has been found in the Indian and Myanmar parts of the Bay of Bengal.
“While the maritime territory can be divided by lines, its interior character cannot be separated. If gas is found in India and Myanmar with similar geological structures, it will also be found in the Bangladeshi territory that lies in between,” he said.