The government will probably award US oil giant ConocoPhilips and Indian Oil and Natural Gas Corporation (ONGC) three shallow sea blocks in the Bay of Bengal to explore for hydrocarbons under a production sharing contract.
The Energy and Mineral Resources Division (EMRD) will place the proposal at the next meeting of the Cabinet Committee on Economic Affairs to award the blocks 4, 7 and 9.
On June 16, Prime Minister Sheikh Hasina consented to the EMRD proposal to give them to two multinational oil companies.
A senior EMRD official said if ConocoPhilips and ONGC discovered and began to extract oil and gas from the three blocks, the acute gas crisis in Chittagong would be solved.
India’s ONGC reportedly offered to invest $38.4m to conduct 2D-seismic surveys in 2700lkm (line kilometer is a measurement for 2D-surveys), 3D seismic in 200sq-km area and drill two development wells in block 4. The government’s profit sharing ratio will be 60-85% for gas and 70-90% for oil.
They also offered to invest $64.8m to conduct 2D survey in 2850lkm, 3D survey in 300sq-km area in block 9 and drill three development wells, with the same ratio of profit share for the government as above.
Meanwhile, ConocoPhilips offered to invest $23.4m to conduct 2D survey in 2347lkm, 3D-seismic in 500sq-km areas and drill one development well in block 7. The profit sharing ratio for the government would be 55-80% for gas and 55-80% in oil.
According to the EMRD proposal, as disputes with Myanmar have been resolved through international arbitration, and so there are no complications in the way of signing contracts with the two oil companies. However, a dispute with India regarding maritime boundaries is awaiting judgment, said the proposal.
Petrobangla Chairman Hossain Monsur told the Dhaka Tribune that the two companies hope to start digging the wells this winter.
He, however, warned that the process of awarding blocks might be delayed if it took the Cabinet Committee on Economic Affairs time to approve the proposal.
“We hope they will start their work and share profit according to the production sharing contract,” he said.
