Bangladesh: Petrobangla to float int’l tenders this year

Dhaka, July 12, 2014 (New Age): The state-run Petrobangla is planning to float international tenders by this year for oil and gas exploration in eight offshore blocks, the boundaries of which have been settled by the Permanent Court of Arbitration, officials have said. They said that Petrobangla, under model production sharing contract, would offer more stakes to the international oil companies than the model PSC 2012 had done for exploring the area. Petrobangla chairman Hossain Monsur said that the conditions for the tenders would be set in a way so that the international oil companies were attracted. He said that Petrobangla was also weighing the idea of engaging its subsidiary Bapex in joint venture with competent foreign firms for oil and gas exploration in the eight offshore blocks. Besides, he said that the government would itself invest in a section of the blocks by employing foreign firms. Prime minister Sheikh Hasina, who also holds the ministry of power, energy and mineral resources, asked the authorities to rearrange the boundaries of the eight offshore blocks based on the maritime boundary demarcated between Bangladesh and India by the Hague-based Arbitration Court, secretary to the PMO Abul Kalam Azad told New Age. The Arbitration Court verdict enabled Bangladesh to explore two shallow sea blocks ­– 1 and 5 – and six deep sea blocks – 9, 14, 15, 19, 24 and 25 – leaving a total of about 6,000 square kilometres area of the Bay of Bengal to the Indian side, officials said. In 2008, Bangladesh suspended a bidding process in the eight offshore blocks as India claimed its ownership over the sea area. Myanmar also claimed its ownership over a number of offshore blocks in the western area of the Bay forcing Bangladesh to conduct offshore bidding for eight blocks out of 20. In 2012, International Tribunal for the Law of the Sea settled the maritime boundary between Bangladesh and Myanmar. In February 2014, Petrobangla completed the process for international tenders for oil and gas exploration in 12 offshore blocks – nine in the shallow sea and three in the deep sea – under Model Production Sharing Contract 2012. The shallow sea blocks are 2, 3, 4, and 6 to 11 and deep sea blocks are 12, 16 and 21. In the model PSC 2012, Petrobangla had already increased the IOCs’ share of gas to $4.5 from $2.9 per 1,000 cubic feet extracted from the shallow sea, while the price for deep sea gas was increased to $6 from $4.5 in 2008. Among other benefits, Petrobangla, in the model PSC 2012, increased the margin of cost recovery to 70 per cent from 55 per cent of the oil and gas extracted from deep sea blocks.