Offshore oil and gas exploration delayed further

Offshore exploration for oil and gas in the Bay of Bengal is being delayed again as after not receiving satisfactory response, the immediate past government had approved the proposal to extend the deadline to participate in the tender by three months.

In the meantime the government has changed hands. Once the interim government issues directives, the tender deadline will be extended. This was learnt from sources in the energy and mineral resources division.

With multi-client survey revealing potential of offshore gas, a number of foreign companies last year expressed their interest in carrying out oil and gas exploration. The energy and mineral resources division sources have said 55 companies were invited to take part in the tender. Six companies have bought tender documents. The dead line to participate in the tender is 9 September.

The maritime territory dispute with India was settled in 2012 and with Myanmar in 2014. Though new Production Sharing Contracts (PSC) were drawn up in 2019, no tenders were floated. Then three years were taken to finalise PSC-2023. On 10 March this year Bangladesh Oil, Gas and Mineral Resources Corporation (Petrobangla) floated an international tender. Previously the last tender had been floated in 2016.

Petrobangla chairman Zanendra Nath Sarkar told Prothom Alo on Wednesday, approval has been taken from the energy and mineral resources division to extend the tender deadline by three months. After approval of the power, energy and mineral resources division is taken, a new notice will be issued.

In the meantime, tenders have been called for 15 deep sea blocks and 9 shallow blocks. Petrobangla officials have said, facilities have been considerably increased this time to attract foreign investment. Interests of the investing companies are also being given importance along with the interests of the country.

It has been learnt that among the multinational oil and gas companies, the US companies ExxonMobil and Chevron, Malaysian company Petronas, Norway and France's joint venture TGS and Schlumberger, Japan's Inpex Corporation and JOGMEC, China's CNOOC, Italy's Eni SPA, Singapore's KrisEnergy and India's ONGC have shown interest at various times and have contacted Petrobangla.

According to Petrobangla officials, after completing the tender process, the contract can be signed in the first half of next year. Then it will take a couple of more months for them to being their vessels and equipment. However, some say after finishing all the details, exploration may begin in 2026.

There are 26 blocks in the Bay of Bengal, 15 deep sea and 11 shallow sea. On 2010 ConocoPhillips got the contract to work on two offshore blocks. They carried out 2D survey but left because their demand for an increase in gas price was not met. Similarly, Australia's Santos and South Korea's Posco Daewoo also abandoned work after signing the contract. Now only the Indian company ONGC is carrying out exploration in two blocks in the shallow sea.

A Petrobangla official, on condition of anonymity, said according to contract, ONGC has up till next February. They drilled one well and found no gas. They are supposed to drill another well. Investment has increased more than planned. In inviting tender thrice for drilling well, they got abnormal rates and so they have not applied to extend their term. They are likely to leave in February.

Petrobangla sources say, Germany's Schlumberger was tasked with carrying out a preliminary feasibility study for offshore prospects. Any interested company can buy the information of the survey. Petrobangla also has details of the ConocoPhillips 2D survey. This too indicates the presence of gas in the Bay of Bengal, though extractable gas reserves cannot be determined without drilling exploratory wells. Till now no well has been drilled in the deep sea. But the two neighbouring countries India and Myanmar have both discovered gas in the same sea.

Geologist Badrul Imam, speaking to Prothom Alo, said that it has already very late. But due to political instability, foreign companies didn't want to come. Now the situation has improved. If the deadline is extended by three months, perhaps there will be a good response. After that, it would not be right to extend the time any further.

*This report appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir