Anisul Islam Noor :
The US energy giant ConocoPhillips has threatened to pull out of its investment from offshore block Nos 10 and 11 in the Bay of Bengal as the government has turned down the proposal of amending the PSC midway, saying that will set up a bad precedence.
The oil giant argued, exploration cost is high in the deep sea.
The company claims there is about five to seven trillion cubic feet of gas in deep sea blocks 10 and 11.The conclusion has been drawn based on the two-dimensional seismic surveys conducted in the blocks.
Power and Energy Ministry official has confirmed The New Nation that they received a letter from ConocoPhillips last week regarding the issue.
ConocoPhillips again requested the government to review gas tariff on blocks 10 and 11. They (ConocoPhillips) said that further investment on blocks 10 and 11 would not be economically viable if the government did not review gas tariff, the official said.
While contacted over phone, Managing Director of ConocoPhillips Bangladesh Exploration 10-11 Ltd Tom Eaeley, however, declined to comment over the issue.
But he admitted that a letter had been sent to Petrobangla about their investment on offshore blocks 10 and 11 in the Bay.
About the proposal of ConocoPhillips, Energy and Mineral Resources Division Secretary Abu Bakar Siddique said, the government has already rejected to review its proposal.
If ConocoPhillips pulls out its investment on blocks 10 and 11 in the Bay, then the government will invite fresh tender on these blocks, he added.
The offshore blocks 10 and 11 have the prospect of having gas reserve ranging from five to seven trillion cubic feet (TCF), the company earlier informed the State Minister for Power and Energy Nasrul Hamid.
ConocoPhillips Bangladesh Exploration 10-11 Ltd has shared the prospect of hydrocarbon reserve on the offshore blocks 10 and 11 as indicated in the report of a 2D seismic survey carried out by the US firm on the deep-sea blocks, the State Minister said.
The US firm has sought a revision of the tariff as like as Myanmar to invest in the deepwater blocks. I think the tariff would not exceed $5 per mscf after adjustment of corporate tax, he said. He said the company also sought two percent hike in gas price.
The Myanmar government has set the gas tariff at $6.06 per mscf for international oil companies, according to the Myanmar Oil and Gas Summit 2013.
ConocoPhillips earlier on June 9 last submitted the progress result of its 2D seismic survey on the two offshore blocks – DS-08-10 and DS-08-11 to Petrobangla.
The two blocks that ConocoPhillips has been awarded are located some 280 km from Chittagong.
In its bid, ConocoPhillips pledged to invest $110.66 million and offered a bank guarantee of the same amount for the two blocks. The company signed a production sharing contract (PSC) with Petrobangla for oil and gas exploration in the two offshore blocks in the Bay in June 2011.
Under the PSC-2008, ConocoPhillips was given nine years to conduct exploration, with five years as a primary exploration period and two years each for the first and second extended exploration periods.
100 percent of the country’s gas has been produced from onshore blocks. Irish company Cairn had discovered the Sangu structure in shallow water in the 1990s, which was abandoned by Santos early last year due to depletion of hydrocarbon reserve on the country’s lone offshore block.
The US energy giant ConocoPhillips has threatened to pull out of its investment from offshore block Nos 10 and 11 in the Bay of Bengal as the government has turned down the proposal of amending the PSC midway, saying that will set up a bad precedence.
The oil giant argued, exploration cost is high in the deep sea.
The company claims there is about five to seven trillion cubic feet of gas in deep sea blocks 10 and 11.The conclusion has been drawn based on the two-dimensional seismic surveys conducted in the blocks.
Power and Energy Ministry official has confirmed The New Nation that they received a letter from ConocoPhillips last week regarding the issue.
ConocoPhillips again requested the government to review gas tariff on blocks 10 and 11. They (ConocoPhillips) said that further investment on blocks 10 and 11 would not be economically viable if the government did not review gas tariff, the official said.
While contacted over phone, Managing Director of ConocoPhillips Bangladesh Exploration 10-11 Ltd Tom Eaeley, however, declined to comment over the issue.
But he admitted that a letter had been sent to Petrobangla about their investment on offshore blocks 10 and 11 in the Bay.
About the proposal of ConocoPhillips, Energy and Mineral Resources Division Secretary Abu Bakar Siddique said, the government has already rejected to review its proposal.
If ConocoPhillips pulls out its investment on blocks 10 and 11 in the Bay, then the government will invite fresh tender on these blocks, he added.
The offshore blocks 10 and 11 have the prospect of having gas reserve ranging from five to seven trillion cubic feet (TCF), the company earlier informed the State Minister for Power and Energy Nasrul Hamid.
ConocoPhillips Bangladesh Exploration 10-11 Ltd has shared the prospect of hydrocarbon reserve on the offshore blocks 10 and 11 as indicated in the report of a 2D seismic survey carried out by the US firm on the deep-sea blocks, the State Minister said.
The US firm has sought a revision of the tariff as like as Myanmar to invest in the deepwater blocks. I think the tariff would not exceed $5 per mscf after adjustment of corporate tax, he said. He said the company also sought two percent hike in gas price.
The Myanmar government has set the gas tariff at $6.06 per mscf for international oil companies, according to the Myanmar Oil and Gas Summit 2013.
ConocoPhillips earlier on June 9 last submitted the progress result of its 2D seismic survey on the two offshore blocks – DS-08-10 and DS-08-11 to Petrobangla.
The two blocks that ConocoPhillips has been awarded are located some 280 km from Chittagong.
In its bid, ConocoPhillips pledged to invest $110.66 million and offered a bank guarantee of the same amount for the two blocks. The company signed a production sharing contract (PSC) with Petrobangla for oil and gas exploration in the two offshore blocks in the Bay in June 2011.
Under the PSC-2008, ConocoPhillips was given nine years to conduct exploration, with five years as a primary exploration period and two years each for the first and second extended exploration periods.
100 percent of the country’s gas has been produced from onshore blocks. Irish company Cairn had discovered the Sangu structure in shallow water in the 1990s, which was abandoned by Santos early last year due to depletion of hydrocarbon reserve on the country’s lone offshore block.
