For the first time in the country’s history, an international oil company has refused to sign the production sharing contract (PSC) for oil and gas exploration in a shallow sea block as the Energy and Mineral Resources Division failed to get prepared in due time.
Earlier, Secretary Md Mozammel Haque Khan of the division had said the contract would be signed with US-based ConocoPhillips within February for block 07.
When contacted yesterday, he refused to make any comment.
ConocoPhillips’ refusal came at a time when state-run Petrobangla is preparing to fix a final date for the signing.
Petrobangla Chairman Hossain Monsur yesterday said they ha d received a letter last week from ConocoPhillips which said they would not sign the deal.
“The US-based firm has argued that the block lies in deep waters of the Bay of Bengal, not in shallow waters. It is frustrating,” he said.
“This is a negative sign for the country. They [the company] might have assumed that there is no prospect in the block. But we think there are other reasons behind the refusal,” said M Tamim, a professor of Buet’s petroleum and mineral resources engineering.
Seeking anonymity, a Petrobangla high official said: “The energy division delayed in the process. ConocoPhillips dropped the bid in April last year. But the government y could not use the time properly.
“If the contract is signed now, it will eat up the company’s one more year time leaving them to incur loss since they will not be able to conduct the 2D-seismic survey. This survey has to be conducted within January-March period,” the official said.
After the US firm dropped the tender, Monsur had told Dhaka Tribune that the contract would be signed within June last year.
Asked why Petrobangla delayed in the singing, he said yesterday that the country’s political unrest centring the national poll had delayed the process.
In September last year, Petrobangla had signed the initial deal with ConocoPhillips. The company had submitted its tender for one shallow block out of nine, which were offered by Petrobangla in the December 2012 bidding round.
ConocoPhillips has offered to invest $23.5m to conduct surveys and drill a single exploration well in block 07. The profit-share of the government would be 55%-80% for gas and the same for oil.
Meanwhile, in January this year, the US firm and Norway-based Statoil jointly dropped bidding documents for exploring oil and gas in three deep sea blocks (12, 16 and 21) in the Bay of Bengal. Three years ago, Bangladesh had signed deals with ConocoPhillips to drill deep sea blocks 10 and 11.
The US firm, however, did not say anything about these deep-water blocks, the Petrobangla chairman said yesterday.
Petrobangla in the last couple of months awarded three shallow blocks to the IOCs. Shallow blocks 04 and 09 were awarded to a joint-venture of India’s ONGC Videsh Limited and Oil India Limited, and block 11 was awarded to a joint venture of Australia’s Santos and Singapore’s KrisEnergy.
For all the shallow blocks, state-run Bangladesh Petroleum Exploration and Production Company Ltd, or Bapex, holds 10% interest.
