NEWS reports said Petrobangla has invited Expression of Interest (EoI) from International Oil Companies (IOCs) for short-listing of qualified bidders for three off-shore gas blocks in the Bay of Bengal. The move surfaced at a time when gas crisis is severely affecting the nation particularly making household users increasingly dependent on Liquefied Natural Gas (LNG) now being marketed in the country by several business firms. The New Nation on Wednesday ran a story titled ‘Pipe gas goes dry’ focusing on the severity of gas crisis and how households are trying to mitigate it by switching to LNG use to run their cooking burners. Some other reports depicted production loss in the industrial sector for want of enough gas and electricity supply. The Petrobangla moves for new bidding came no better time to find new takers of the three gas blocks in the off-shore shallow water which were earlier awarded to a Joint Venture (JV) company of Norwegian Statoil and the US-based ConocoPhillips in the bidding round held in 2012. ConocoPhillips later backed out from signing the PSCs showing poor fiscal terms and Statoil backed out when Bangladesh government did not agree to set up a gas pipeline for the IOC to take gas on-shore from the off-shore gas fields at its own cost. As it appears that the global hydrocarbon industry has passed through drastic changes with sharp fall in oil prices by the time and IOCs are more sensitive now to enter into new bidding rounds. Needless to say the government is also equally aware of the reality in the industry. Petrobangla has also restructured the production-sharing contract (PSC) moving out from output sharing to buying gas directly from the IOCs at competitive market price. The IOCs would bear all cost and its recovery is subject to discovery of hydrocarbon deposits. It is no more a secret that the country is in desperate need for new discovery when industrial expansion remained particularly stalled in want of enough gas and electricity supply. Moreover, supply uncertainty is equally making difficult projection of future business development and nation’s exports, which provides the bulk of foreign exchange earning to support other development. It is a highly sensitive time when ruling party muggers must also be held in check from attacking exploration work at Titas Gas Field and such other places for toll collection. It may pass bad signals to interested parties planning to take part in short-listing. In our view the government must quickly move with the possible short-listing plan and find out prospective bidders for the gas blocks awaiting exploration and development. Bidders may be given the highest possible incentives for the purpose.
