The state-owned Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) is proposing an extension for the deadline to submit bids for offshore oil and gas exploration, following requests from several international oil companies (IOCs) for more time, said Petrobangla sources.
International bids were initially invited on March 11, 2024, with a six-month submission deadline set for September 9. Some IOCs have requested extensions of up to six months; however, Petrobangla is currently considering a three-month extension, sources confirmed.
"We have received requests from several IOCs for an extension and submitted a proposal to the Ministry of Power, Energy and Mineral Resources. The ministry will take the final decision,” said Petrobangla Director (PSC) Engineer Md Rafiqul Islam.
Petrobangla Chairman Zanendra Nath Sarker recently told the media, “Many large oil companies are showing interest in offshore oil and gas exploration and production. Several companies have requested more time and the matter is being considered.”
This bidding round covers 24 blocks in Bangladesh's maritime territory, including 15 deep-sea and nine shallow-sea blocks. Currently, India's Oil and Natural Gas Corporation Limited (ONGC) is exploring two shallow-sea blocks.
Notably, this is the first call for bids since 2016, despite an update to the Production Sharing Contract (PSC) in 2019.
Petrobangla said that this time, invitations were sent via email to 55 top-tier global oil companies, and many companies, including US companies Chevron Bangladesh and ExxonMobil, and several Japanese firms, have shown interest.
After the resolution of maritime boundary disputes between Myanmar (2012) and India (2014), Bangladesh secured ownership of 1,18,813 square kilometres of maritime territory. In 2010, ConocoPhillips began work in the DS-10 and DS-11 deep-sea blocks. After conducting a 2D survey, they demanded a higher gas price and ceased operations when their demand was not met. Additionally, Australia's Santos and South Korea's Posco Daewoo also left after signing contracts.
Myanmar has long been extracting gas from adjacent blocks, and energy experts are optimistic about the gas reserves in Bangladesh's maritime area, believing it can significantly help address the country's gas shortage.
According to Petrobangla sources, the PSC has been made more attractive to engage IOCs. Unlike previous PSCs where gas prices were fixed, the current PSC will allow gas prices to fluctuate with the international crude oil price of the Brent crude oil market.
The price of gas per thousand cubic feet has been set to be 10 per cent of the Brent crude price. For instance, if the Brent crude price is $80, the gas price will be $8.
Previously, prices were fixed at $5.6 and $7.25 per thousand cubic feet for shallow and deep sea, respectively. Now, the price of gas extracted from the sea will fluctuate with the average monthly Brent crude oil price, which will be used as the reference.
