Anisul Islam Noor :
International Oil Companies (IOCs) have shown poor response in biding for exploration of oil and gas in the Bay of Bengal despite Petrobangla’s repeated initiatives to lure them to off-shore water, sources said.
They said only two IOCs — Irish Tullow Oil and South Korean Daewoo — submitted bids on Thursday, the closing day of the bid for the three deep-sea blocks in the Bay.
The deep-water blocks, DS-12, DS-16 and DS-21, are located in depth ranging from 20-200 metres having the size of 3,560 sq km, 3,353 sq km and 3,204 sq km respectively.
According to term of the contract, the contractors will bear all the costs. The recovery of the costs is, however, subject to discovery of petroleum, they said.
The Petrobangla is not satisfied because only two IOCs have shown their interest to the bids which is not enough for competitive bidding. Still, it will evaluate their proposals and send those to the Energy Division for final bid, the sources said.
Earlier, these three blocks were also offered by Petrobangla in the 2012 bidding round. During that time, the blocks were awarded to a joint venture of Norwegian Statoil and US’s ConocoPhillips for hydrocarbon exploration. ConocoPhillips and Statoil had 50:50 stakes.
But ConocoPhillips backed out from signing the production sharing contract (PSC) showing ‘poor fiscal terms’ in April, 2015.
After ConocoPhillips’s withdrawal, Statoil was interested to explore these deep-water blocks alone subject to ‘increased fiscal benefits’ in the PSC.
Statoil sought enhancing of price of hydrocarbon in line with the annual rate of inflation, in addition to the provision of 2.0 per cent annual hike in prices from first gas production, which was provided in the model PSC, said a Petrobangla official. Besides, the Norwegian firm wanted the Petrobangla to bear the cost of laying a pipeline from deep-sea gas field to the shore. Under the model PSC, the pipeline construction cost is to be borne by the contractor.
After discussion with Statoil, Petrobangla had sent a proposal to the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources to have decision on the demand, he said.
But the ministry rejected it prompting Petrobangla to invite fresh expressing of interests (EoIs) for these blocks.
Bangladesh is trying to develop resources in the Bay of Bengal to help meet the country’s mounting energy demand.
The country is dependent on onshore gas fields for its entire natural gas output.
Currently, gas production is running at around 2,700 million cubic feet (mmcfd) per day against the demand for above 3,200 mmcfd.
International Oil Companies (IOCs) have shown poor response in biding for exploration of oil and gas in the Bay of Bengal despite Petrobangla’s repeated initiatives to lure them to off-shore water, sources said.
They said only two IOCs — Irish Tullow Oil and South Korean Daewoo — submitted bids on Thursday, the closing day of the bid for the three deep-sea blocks in the Bay.
The deep-water blocks, DS-12, DS-16 and DS-21, are located in depth ranging from 20-200 metres having the size of 3,560 sq km, 3,353 sq km and 3,204 sq km respectively.
According to term of the contract, the contractors will bear all the costs. The recovery of the costs is, however, subject to discovery of petroleum, they said.
The Petrobangla is not satisfied because only two IOCs have shown their interest to the bids which is not enough for competitive bidding. Still, it will evaluate their proposals and send those to the Energy Division for final bid, the sources said.
Earlier, these three blocks were also offered by Petrobangla in the 2012 bidding round. During that time, the blocks were awarded to a joint venture of Norwegian Statoil and US’s ConocoPhillips for hydrocarbon exploration. ConocoPhillips and Statoil had 50:50 stakes.
But ConocoPhillips backed out from signing the production sharing contract (PSC) showing ‘poor fiscal terms’ in April, 2015.
After ConocoPhillips’s withdrawal, Statoil was interested to explore these deep-water blocks alone subject to ‘increased fiscal benefits’ in the PSC.
Statoil sought enhancing of price of hydrocarbon in line with the annual rate of inflation, in addition to the provision of 2.0 per cent annual hike in prices from first gas production, which was provided in the model PSC, said a Petrobangla official. Besides, the Norwegian firm wanted the Petrobangla to bear the cost of laying a pipeline from deep-sea gas field to the shore. Under the model PSC, the pipeline construction cost is to be borne by the contractor.
After discussion with Statoil, Petrobangla had sent a proposal to the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources to have decision on the demand, he said.
But the ministry rejected it prompting Petrobangla to invite fresh expressing of interests (EoIs) for these blocks.
Bangladesh is trying to develop resources in the Bay of Bengal to help meet the country’s mounting energy demand.
The country is dependent on onshore gas fields for its entire natural gas output.
Currently, gas production is running at around 2,700 million cubic feet (mmcfd) per day against the demand for above 3,200 mmcfd.
