That Petrobangla only received two bids from international oil companies (IOCs), for further exploration of potential sources of oil and gas, is a stark reminder that the country must do significantly more in order to attract foreign investment.
Current gas reserves that provide fuel for over 70% of all power generation activities are being depleted exponentially. At present, from local sources, gas-based power generation receives gas at a price far lower than the regional market value. If more gas is not discovered soon, the country will have to look to other primary energy sources, most of which will have to be imported at great cost.
This makes it more important than ever that we are able to properly exploit the natural resources we may be sitting on. Our future energy security, and, consequently, the extent of our economic/industrial growth may depend on it.
That being said, the government must do all in its power to make the country a more attractive place in which to invest. A recent study by the World Bank ranks Bangladesh as 129 out of a study that includes 185 countries with regards to ease of doing business. The ranking represents why so few large companies are willing to invest much-needed capital.
The steps that should be taken in the short run include increasing the transparency of bidding procedures, doing away with bureaucratic red tape and providing further financial incentives for those who may be willing to invest – possibly by going so far as to raise the price at which gas is supplied to local power generation and industry.
These initial steps would be a good way to assuage the fears of international organisations and protect Bangladesh’s economic outlook in the long run.