Offshore oil, gas exploration: No foreign Cos submit tenders
Although the deadline for submitting tenders for offshore oil and gas exploration in the Bay of Bengal ended at 1:00 pm today, Monday, none of the companies submitted tenders.
Now the situation will be reviewed again.
Three officials of the Bangladesh Oil, Gas & Mineral Corporation (Petrobangla) confirmed the matter to Prothom Alo.
Only seven foreign companies purchased tenders at the beginning. However, the deadline was extended for three more months in order to raise the competition.
Petrobangla officials said foreign companies might have taken the current political situation into consideration.
Besides, gas prices will drop with a fall in global oil prices as per the deals. That is why foreigners might lack interest in investment. However, the authorities will reach out the foreign companies.
No gas or oil has been discovered since Bangladesh won the dispute over maritime boundary for more than a decade. Four foreign companies started working, but three of them abandoned work before their deadline. The remaining one might leave in February next.
Tender for offshore oil and gas exploration in the Bay of Bengal was floated on 10 March with a six-month period and the interim government in September extended the deadline by three months to 9 December.
The government introduced the Production Sharing Contract (PSC) to attract foreign companies, fixing the gas price at 10 per cent of the oil price. Gas prices will fluctuate along with oil prices. Currently, the oil price is USD 70-72, thus, the gas price will be USD 7-7.2 per cent. Oil price was at over USD 90 per cent when tenders were floated.
Petrobangla chairman Zanendra Nath Sarker told Prothom Alo none participated in the tender. They didn't inform them about reasons. He said they would contact these companies and evaluate the documents. After that, preparation on tender will be taken again after carrying out necessary amendments.
According to sources at the Petrobangla, US-based multinational gas and oil companies ExxonMobil Corporation and Chevron Corporation, Malaysia’s PETRONAS Chemicals Group, Norwegian-France joint venture TGS-Schlumberger, Japanese firm Inpex Corporation and Japan Organization for Metals and Energy Security (JOGMEC), China National Offshore Oil Corporation (CNOOC), Singapore-based KrisEnergy, India’s Oil and Natural Gas Corporation Crude have shown interest at various times and have contacted Petrobangla. Of them, ExxonMobil, Chevron, Inpex and JOGMEC purchased data on multidimensional surveys, but none of them participated in tenders.
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. With a multi-client survey revealing the potential of offshore gas, a number of foreign companies expressed their interest in carrying out oil and gas exploration. On 10 March 2024, Petrobangla floated an international tender. Fifty-five companies were invited to take part in the tender. Previously the last tender had been floated in 2016.
Petrobangla organised a seminar in May this year after floating tender with more than 15 foreign companies taking part in it. Findings of a multi-client 2D seismic survey conducted by TGS and Schlumberger on a 12,000 km line area in the sea were presented at the event.
Officials at Petrobangla said tenders were called for 15 deep sea blocks and 9 shallow blocks. Facilities were 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. As a result, they were hopeful about the tenders.
There are 26 blocks in the Bay of Bengal, 15 deep sea and 11 shallow sea. In 2010, ConocoPhillips got the contract to work on two offshore blocks. They carried out a 2D survey but left because their demand for an increase in gas prices 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.
*This report appeared in the online edition of Prothom Alo and has been rewritten in English by Hasanul Banna