The Petrobangla is seeking today the approval of cabinet committee on economic affairs to sign a production sharing contract (PSC) for a block in the shallow waters of the Bay of Bengal with two foreign oil companies.
Australian Santos and Cayman Island-based KrisEnergy jointly won the bidding for block number SS-11 in August. The joint venture had submitted its bid on July 29.
Although their bid did not have to face any competition, the Petrobangla was satisfied with their proposal and qualification.
If the cabinet committee approves the bid and a PSC is signed now, the companies may conduct surveys – 1,893 line-kilometres of two-dimensional seismic survey and 300 sqkm of three-dimensional seismic survey — during the winter.
As per the proposal, Santos and KrisEnergy have committed to drill one well during their five years initial contract period and they may finish the drilling by 2014.
Submitting a bank guarantee of $15 million, the joint venture has also offered 55 to 80 percent profit share to the government in case of gas or oil discovery.
The Petrobangla wrote to the cabinet committee that the government had floated an offshore block bid in 2008 but did not get much response. During its second offshore block bid last year with nine shallow water blocks and three deep sea blocks, response was again not so warm.
Santos has been efficiently and cost effectively operating the Sangu gas field while KrisEnergy has recently taken over Irish Tullow Oil’s operatorship in block 9.