The state-owned Petrobangla has received expressions of interest from eight international oil companies (IOCs) to carry out the job of upgrading the country’s offshore model production sharing contract (PSC), paving the way for launching the long-awaited bidding round for hydrocarbon exploration. It will now select a potential one among them on the basis of their bids. Petrobangla has already amended the PSC contract of 2019 in order to attract global oil companies amid the hike in fuel prices in the international market, say officials. A news report in a national daily, quoting officials, said that the government has decided to provide the global companies with more incentives like increase of gas price, exemption of tariff and mandatory drilling option offshore.
Earlier, Petrobangla included provision for export in the PSC in 2008 but amid criticism discarded it in 2012. Energy experts said that the country failed to lure an expected number of international companies during the bidding round in 2012 owing to the absence of the export provision and inadequate fiscal incentives, forcing the government to backtrack on this. They think the PSC now protects both the country’s interest and that of the international companies. The ceiling price of gas has been revised up to $215 per tonne from $200 for offshore blocks. For onshore blocks, the floor price has remained $100 per tonne and the ceiling price $200, according to a government document.
Bangladesh’s offshore area remained unexplored despite the fact that it had settled its maritime boundary disputes with neighbouring Myanmar in 2012 and India 2014. Besides, it has no success in the exploration of oil and gas in its offshore areas located within its maritime boundary. Meanwhile, critics have vehemently opposed the gas export move and other incentives being granted to the international companies. To them, the move is not logical because Bangladesh is importing LNG on the one hand and is allowing exports of its own gas through the provision for exploration on the other. Bangladesh’s current gas reserves of 11.47 trillion cubic feet will run out by the next decade at the current rate of consumption. We have taken too much time to settle on hydrocarbon explorations and now should not miss the bus as the international community wants carbs on fossil fuels at an early date to halt climate change.
