Home Bangladesh Petrobangla expects 50 foreign bids in oil search
Bangladesh - Bank & Finance - March 11, 2024

Petrobangla expects 50 foreign bids in oil search

Offshore oil-gas exploration

Rabiul Haque : International tenders are being invited for oil and gas exploration in the country’s offshore waters with the potential to yield significant amounts of gas. After eight years, this tender may be called on Sunday. Petrobangla believes that 55 international companies can participate in the tender.
There are 15 blocks in the deep sea and 11 in the shallow sea. Indian company ONGC is currently exploring two blocks in the shallow sea. Tenders are being invited for the remaining 24 blocks. This information is known from the reliable sources of the Ministry of Power, Energy and Mineral Resources and Petrobangla.
In this regard, Minister of State for Electricity, Energy and Mineral Resources Nasrul Hamid told, “We are going to call for international tenders soon.
Earlier the US company Exxon Mobil wanted to lease all the blocks in our sea, they were asked to participate in the tender. This time, we expect more than 50 foreign companies to participate.
According to Ministry and Petrobangla sources, the state-owned oil and gas exploration and extraction company Bapex will jointly participate in the work with the company that will get the block lease in the tender. In this case Bapex will get 10 percent ownership. It is expected to increase BAPEX’s offshore oil and gas exploration and production capabilities.
Dhaka University Geology Department Honorary Professor and energy expert Dr. Badrul Imam said, the Bay of Bengal has all the necessary elements to get gas. Gas has been found in Indian part of Bay of Bengal, huge amount of gas has also been found in Myanmar part. Even if the maritime territory is divided by lines, its interior character cannot be divided. If gas is found in India and Myanmar with similar geological structure, gas will definitely be found in the middle part of Bangladesh sea.
It is known that at the end of the last term of the Awami League government, the large American company Exxon Mobil made an offer to lease all the blocks in the Bay of Bengal. The proposal is positively forwarded to the Prime Minister. At that time, Petrobangla also drafted the final agreement with ExxonMobil. However, the government abstained from such agreements before the elections. International tenders were ordered to be called after the elections.
International tenders for offshore oil and gas exploration were last called in 2016. After the Awami League-led grand coalition came to power in 2009, four foreign companies started operating in the sea, but three left later. After the settlement of maritime boundary disputes with India and Myanmar, there has been no major work in the exploration of potential oil and gas in the sea.
Are the gas reserves running out? Three of the world’s best institutions have conducted a survey in the sea of Bangladesh. According to these studies, undiscovered gas reserves in Bangladesh range from 32 to 42 trillion cubic feet (tcf). Bangladesh can run for at least 30 years with this amount of gas. Although there is some hype that the country is running out of gas, liquefied natural gas (LNG) has to be imported.
According to some energy experts, mainly due to LNG-related businessmen and local agents of related purchases, the country is being propagated that the country is gas-free without lifting gas.
Professor M Shamsul Alam, Dean of Engineering Faculty of Daffodil International University and Energy Advisor of Consumers Association of Bangladesh (CAB), said, “During BNP, it was preached that the country is floating on gas, what is the use of keeping resources underground! Now those experts are saying that there is no gas in the country, we import LNG. Now think if the gas export to India could not be stopped by protesting then, what would have happened? Those who say these things are basically commission agents for gas export and LNG import.
The United States Geological Survey (USGS) and Petrobangla jointly conducted a land survey of the country in 1998. It said that Bangladesh has 32.5 TCF of undiscovered gas reserves with 50 percent potential.
According to a study by the Norwegian Petroleum Directorate (NPD) and the Hydrocarbon Unit of Bangladesh, the undiscovered gas reserves in the country are 42 TCF, the probability of getting this amount of gas is 50 percent. According to Denmark-based oil and gas consultancy Ramble, the country has 34 tcf of gas reserves.
Badrul Imam also said, based on the two-dimensional and three-dimensional survey done so far in Bangladesh, wells have not been dug on a large scale. 90% of the country’s areas have not been searched.
What is in the new PSC is the model production-distribution contract (PSC) of 2023. The price of gas has not been determined. Gas price is 10 percent of the price of crude oil. At this rate, the price of gas will also decrease or increase with the fluctuation of fuel oil prices.
In the new PSC, gas is shared between the foreign companies and Petrobangla in a new formula. Earlier, foreign companies used to get up to 80 percent share till operating expenses and investment came up. Petrobangla will get a share of 35 to 65 percent of the revenue in the new PSC. However, Petrobangla has made provisions for gas export in the new PSC as well. Foreign companies can export a maximum of 30 percent of the total demand of gas in the country.
Prof. M. Shamsul Alam said that it is not acceptable to have provision for export in the midst of severe gas crisis in the country.

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