Petrobangla has signed the initial for production sharing contract with Indian oil and gas company, ONGC Videsh Ltd for two shallow sea blocks in the Bay of Bengal.
“We have signed the initial with ONGC Videsh Ltd to explore two shallow sea blocks,” Muhammad Imaduddin, Director (production sharing contract) of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) told the Dhaka Tribune Thursday.
“The signed copy will be sent through the energy division for vetting by the law ministry. After vetting, the cabinet committee on economic affairs will approve the signing of production-sharing contract (PSC),” said Imaduddin. The whole documentation process is expected to be completed by November.
Earlier, the cabinet committee on economic affairs had allowed Petrobangla to sign the initial for blocks 4, 7 and 9.
On April 2, US-based ConocoPhillips and ONGC participated in the bidding process for exploration in nine blocks. ConocoPhillips submitted tender for block 7 and the ONGC for blocks 4 and 9.
“We hope that the initial signing with ConocoPhillips can be done within a month,” the Petrobangla director said.
ConocoPhillips had got two blocks in the deep sea back in 2011 while India’s state-owned ONGC is going to operate in Bangladesh for the first time.
A government-formed evaluation committee put forward its recommendations to Petrobangla following the bidding, asking it to go ahead with the signing of the initials with the foreign companies.
India’s ONGC has reportedly offered to invest $38.4m to conduct 2D-seismic survey of 2700 line-km, 3D-seismic survey of a 200sq-km area and drill two wells in block 4.
The government’s profit-sharing ratio will be 60%-85% for gas and 70%-90% for oil. It has also offered to invest $64.8m to conduct 2D survey of 2850 line-km, 3D survey of a 300sq-km area in block 9 and drill three wells.
Meanwhile, ConocoPhilips has offered to invest $23.5m to conduct 2D-seismic survey of 2347 line-km, 3D-seismic survey of a 500sq-km area and drill one exploration well in block 7.
The profit-sharing ratio for the government would be 55%-80% for gas and the same for oil.
Four foreign organisations Chevron, Santos, ConocoPhillips and Tullow are working in Bangladesh now.
On December 17, 2012, Petrobangla invited international tenders for exploring oil and gas prospects in 12 blocks under Offshore Bidding Round 2012. Of them, nine blocks are in shallow sea and three were in deep sea.
Earlier, international bidding was called under the PSC in 1993, 1997 and 2008.