The government is going to award contract to the Korean Company ‘Daewoo International Corporation’ for gas and oil exploration from the deep-sea block-12 in the Bay adjacent to the Myanmar’s territory without floating tender.
“As the Prime Minister has given her consent before the Eid-ul-Azha, the energy division of power, energy and mineral resources ministry, has already prepared a proposal in order to send it to the cabinet committee on economic affairs for its approval,” a highly placed source in the ministry said.
According to the source, before signing of a Production Sharing Contract (PSC) with any foreign company, it needs an approval from the cabinet committee on economic affairs.
Daewoo has shown its keen interest for exploration gas from the block-12 as it has already discovered a gas field in Myanmar’s territory adjacent to the Bangladesh one.
In February, Daewoo and its Australian partner Woodside Energy announced the discovery of the gas filed in Myanmar’s block AD-7.
Daewoo will be paid $6.50 for each thousand cubic feet of natural gas it owns under the PSC, to be signed in a few months, the sources said.
The company also agreed with the other terms and conditions set out in the Model Production Sharing Contract-2012. But it did not participate in the bidding process, sources said.
The hydrocarbon block- 12 was freed along with two other blocks 16 and 21 last year, as Norwegian company Statoil claimed additional fiscal benefits beyond the bid it submitted under Model Production Sharing Contract- 2012.
Statoil in a joint-venture with the US oil company ConocoPhillips, was the lone bidder for the three deep sea blocks. Later, Conoco pulled off its interests from the venture.
On February 4, state-run Petrobangla invited international oil companies to submit expression of interests to explore three deep sea blocks in the Bay under the Speedy Supply of Power and Energy (Special Provisions) Act 2010.
Daewoo alone submitted its proposal and only for the deep sea block 12.
When asked, an energy division official said that the government would award deep-sea blocks 10, 11, 16 and 21 through negotiations.
Petrobangla increased the price of deep sea block gas to $6.5 per thousand cubic feet in the model PSC- 2012 from $4.5 in the model PSC- 2008 and cost recovery to 70 per cent from 55 per cent.
Among other financial facilities, Petrobangla also took the responsibility of paying taxes on behalf of the companies under the amended PSC- 2012.
In December 2014, the US company ConocoPhillips relinquished the two deep sea blocks 10 and 11 as it did not find oil and gas from the blocks under the PSC – 2008 it signed in 2011.
