UNB, Dhaka :
Petrobangla commences negotiations Sunday with three international oil companies (IOCs) for three offshore gas blocks, targeting a conclusion by the end of the month. The three deep sea blocks – DS12, 16 and 21 – are located at depths ranging from 20-200 metres, with area 3200-3600 square kilometers in the Bay of Bengal in Bangladesh.
Petrobangla received formal proposals for the blocks in the form of Request for Proposals (RfP) from Singapore-based Kris Energy, South Korea’s Daewoo International Corporation, and Norway’s Statoil on May 7. An RfP is treated as the final offer.
Prior to submitting the RFPs, Kris Energy and Daewoo initially submitted Expressions of Interest, or EOIs for the deep sea blocks in the last week of February in the form of unsolicited offers, responding to a call from Petrobangla.
Statoil had long been embroiled in negotiations with the government over the blocks without any breakthrough. The Norwegian company submitted its own RfP on the same date to stay in the race.
“We’ll start the negotiations with Daewoo on Sunday. Then separate negotiations will take place with the other two,” Petrobangla director (PSC) Md. Quamruzzaman told UNB.
Petrobangla Chairman Ishtiak Ahmed said the target is to conclude negotiations with the three IOCs within the current month.
“Our final target is to complete the awarding process by September to allow the companies to utilise the coming dry season for exploration purposes,” he told UNB.
Ishtiak said that through these talks the government would be trying to set a standard for future negotiations over the gas price and other issues in its deep sea blocks.
In view of previous failures, Petrobangla is proceeding with a more flexible policy approach this time to try and reach a conclusion with the IOCs, according to official sources.
The state-owned hydrocarbons corporation has already tried a number of times to award some of the blocks that were awarded to Bangladesh by a UN court in 2012, in resolution of its maritime boundary disputes with Myanmar and India.
But it has been a history of failed attempts, due to what has been described as its ‘stiff’ position on pricing and export conditions. Either that, or the Petrobangla negotiators have not been skilled enough in negotiations. Myanmar and India have both been successful in awarding contracts for the blocks they won.
“This time, we’re more flexible about gas pricing and also on the gas export issue,” a top Petrobangla official told UNB, pointing to the unfavourable global scenario in the oil and gas market, where prices have significantly dropped and investment in the sector is getting discouraged.
He would not speak about specifics, and so it remains to be seen just how far Petrobangla is willing to compromise in the coming days.
Petrobangla commences negotiations Sunday with three international oil companies (IOCs) for three offshore gas blocks, targeting a conclusion by the end of the month. The three deep sea blocks – DS12, 16 and 21 – are located at depths ranging from 20-200 metres, with area 3200-3600 square kilometers in the Bay of Bengal in Bangladesh.
Petrobangla received formal proposals for the blocks in the form of Request for Proposals (RfP) from Singapore-based Kris Energy, South Korea’s Daewoo International Corporation, and Norway’s Statoil on May 7. An RfP is treated as the final offer.
Prior to submitting the RFPs, Kris Energy and Daewoo initially submitted Expressions of Interest, or EOIs for the deep sea blocks in the last week of February in the form of unsolicited offers, responding to a call from Petrobangla.
Statoil had long been embroiled in negotiations with the government over the blocks without any breakthrough. The Norwegian company submitted its own RfP on the same date to stay in the race.
“We’ll start the negotiations with Daewoo on Sunday. Then separate negotiations will take place with the other two,” Petrobangla director (PSC) Md. Quamruzzaman told UNB.
Petrobangla Chairman Ishtiak Ahmed said the target is to conclude negotiations with the three IOCs within the current month.
“Our final target is to complete the awarding process by September to allow the companies to utilise the coming dry season for exploration purposes,” he told UNB.
Ishtiak said that through these talks the government would be trying to set a standard for future negotiations over the gas price and other issues in its deep sea blocks.
In view of previous failures, Petrobangla is proceeding with a more flexible policy approach this time to try and reach a conclusion with the IOCs, according to official sources.
The state-owned hydrocarbons corporation has already tried a number of times to award some of the blocks that were awarded to Bangladesh by a UN court in 2012, in resolution of its maritime boundary disputes with Myanmar and India.
But it has been a history of failed attempts, due to what has been described as its ‘stiff’ position on pricing and export conditions. Either that, or the Petrobangla negotiators have not been skilled enough in negotiations. Myanmar and India have both been successful in awarding contracts for the blocks they won.
“This time, we’re more flexible about gas pricing and also on the gas export issue,” a top Petrobangla official told UNB, pointing to the unfavourable global scenario in the oil and gas market, where prices have significantly dropped and investment in the sector is getting discouraged.
He would not speak about specifics, and so it remains to be seen just how far Petrobangla is willing to compromise in the coming days.
