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Dhaka Tribune

PSCs with ConocoPhillips, Statoil on 3 deep-sea blocks recommended

Update : 19 Feb 2014, 09:33 PM

The government is likely to sign production sharing contracts (PSCs) with the US-based ConocoPhillips and Norway-based Statoil ASA for exploring oil and gas in three deep-sea blocks in the Bay of Bengal.

“We recommended signing the PSCs followed by necessary approval by the cabinet committee on economic affairs,” said Mohammad Rafiqul Islam Khan, Petrobangla director for finance and convener of an evaluation committee on bidding, yesterday.

If the contracts were signed, the international oil companies would form a joint venture to operate in blocks 12, 16 and 21, he told the Dhaka Tribune.

ConocoPhillips and Statoil recently submitted a joint tender to explore oil and gas in these blocks near the Myanmar territory of the Bay.

The two companies will conduct mandatory 2D seismic surveys on 1,412 line-kilometre area of block 12; 775line-km of block 16; and 1,376line-km of block 21 in three years.

In the next two years, they will conduct 2,000line-km of 2D or equivalent 3D seismic surveys and drill an exploratory well each in the three blocks.

The Petrobangla director said ConocoPhillips and Statoil would spend $109m for the exploratory well and other work in each block and deposit the amount as bank guarantee as per the bidding proposal.

After the initial five-year period, the two companies will drill another exploratory well in each block.

Petrobangla had first put a total of 12 blocks out for international bidding on December 17, 2012 under the Bangladesh Offshore Bidding Round 2012 – nine of them were in 51,589 square kilometres of shallow sea and three in 10,041 square kilometres of deep sea.

In October last year, Petrobangla invited international tenders again, but no company showed interest.

According to the PSC, a contractor will be allowed 20 years to work on an oil field and 25 years on a gas field from the date of approval of the development plan. They cannot export oil and gas, but they can sell gas to a third party inside Bangladesh.

Petrobangla is now ready to sign PSCs for two selected shallow sea blocks – for block 7 with ConocoPhillips and for block 11 with Australia-based Santos and Singapore-based Kris Energy Limited.

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