Anisul Islam Noor :
Petrobangla failed to attract International Oil Companies (IOCs) for exploring oil and gas in the country in last few years.
Now the state-run Petrobangla has decided to take advice from a foreign firm to prepare a ‘rational’ draft contract model to attract IOCs for carrying out oil and gas exploration in offshore and onshore to meet the growing domestic demand, sources said.
“Petrobangla will float an international tender soon to recruit a consultant and subsequently prepare a model production-sharing contract (PSC) to lure IOCs for taking part in future bidding round and conducting hydrocarbon exploration,” said Istiaque Ahmad, Petrobangla Chairman.
Unlike the previous instances, the government took the decision to prepare a model PSC by engaging a consultant as the country’s two previous bidding rounds went in vain due to disinclination from the IOCs. Petrobangla prepared all previous model PSCs and launched bidding rounds successfully.
Many IOCs did not take part in the 2008 and 2012 bidding rounds only due to ‘inadequate’ fiscal terms, said a senior Petrobangla official requesting anonymity. Only a few IOCs, which took part in the bidding and subsequently inked PSCs, did not continue exploration, he said. US-based oil and gas giant ConocoPhillips shut operations and left exploration rights from two separate deepwater blocks DS-08-10 and DS-08 -11 on December 15, 2014 after carrying out 2D seismic surveys due to ‘poor’ fiscal terms.
ConocoPhillips had inked PSCs for carrying out oil and gas exploration activities in these two deepwater blocks in June 2011 after coming out as the lone successful bidder from the 2008 bidding round. The same firm in April, 2013 also backed out from signing a deal for shallow-water block SS-07 as the fiscal terms were deemed not supportive for it. The US firm was awarded the shallow water block following the 2012 bidding round.
The US firm along with Statoil was awarded jointly to sign PSCs for the three deep water blocks DS-12, DS-16 and DS-21.
ConocoPhillips left the JV. Before leaving, it had sought provision of annual 2.0 per cent hike in natural gas price to begin earlier than at ‘first production.’ The annual hike of natural gas price by 2.0 per cent from first gas production was one of the revised provisions made by Petrobangla to lure international oil companies for oil and gas exploration in three deepwater blocks under the 2012 bidding round. These were big setbacks for the country’s future energy security as Petrobangla was failing once again to attract IOCs to carry out hydrocarbon exploration in offshore blocks, said Professor M Tamim of the Bangladesh University of Engineering and Technology (BUET).
The country is currently dependent on onshore fields for its entire natural gas output. Gas production at present is running at around 2,700 million cubic feet per day (mmcfd) against the demand for above 3,200 mmcfd. Short supply of natural gas has pushed the government to ration natural gas supplies to industries, power plants and fertiliser factories.
