International oil companies (IOCs), Australia-based Santos and Singapore-based Kris Energy on Monday jointly dropped bidding documents for exploring oil and gas at one of the shallow sea blocks in the Bay of Bengal.
"We hope to sign the PSC [production sharing contract] with the companies only after evaluating their bid and its approval from the cabinet committee on economic affairs at the end of December," said Hossain Monsur, chairman of Petrobangla. The blocks earmarked for the bidding were shallow sea blocks 2, 3, 6, 8, 10 and 11.
"Though we assumed we would receive tenders for at least two blocks, Santos and Kris Energy have submitted a tender for block 11, which is close to the Myanmar border," said Muhammad Imaduddin, director (PSC) of Petrobangla.
If the contract is signed with Santos and Kris Energy, we will form a joint venture company, which will operate on block 11, he said
"Santos and Kris Energy have offered to explore block 11, conduct the 870 line kilometres of mandatory 2D seismic survey and 300sq-km of 3D seismic surveys, and to drill one well – within the initial period of five years," Imaduddin said.
The companies will spend $32m for the exploratory well and other works. They will also conduct additional 2D seismic surveys over 1006 line kilometres.
They will deposit bank guarantees worth $15m as proposed in the bidding, said the Petrobangla director.
Santos is currently producing gas at block 16 while Kris Energy has signed an agreement to take over Tullow Bangladesh Limited's operations on the Bangora gas field at onshore block 9 for 16 years at an expense of $42.35m.
Petrobangla fixed June 27 for the submission of bidding papers but when none of the IOCs replied, it extended the deadline to July 29.
On December 17, 2012, Petrobangla invited international tenders for exploring oil and gas in 12 blocks under the Offshore Bidding Round 2012. Nine of the blocks are in shallow sea (51,589 sq-km) and three in deep sea (10,041sq-km).
The Petrobangla chairman said the government was now ready to award three selected shallow sea blocks.
US-based ConocoPhillips submitted tenders for block 07, while India's state-owned ONGC Videsh Ltd bid for blocks 04 and 09.
Under the new PSC, there is no scope to export oil and gas, but it can be sold to a third party in the country. Earlier, international bidding had been called under the PSC in 1993, 1997 and 2008.
