Tender for 3rd round bidding by Feb 15
The government will float international tender for third-round bidding by February 15 to award contracts to foreign firms for exploring gas and oil in the deep-sea and offshore areas.
After getting cabinet approval to the newly drafted model production sharing contract (PSC), Chief Advisor's Special Assistant for Energy and Power Ministry M Tamim yesterday unveiled the government plan in this regard at a press briefing.
Ruling out any delays on the pretext of any possible conflict with any neighbouring country over the maritime territories, he said if any objection came, then it will be settled as per international law and practice.
He informed that a provision was included in the new model PSC to deal with the matters like extension of any block with any other blocks or reserves of any neighbouring country.
He said after floating tender, the government will make its highest possible effort to complete the bidding as soon as possible and award the contract by August-October 2008 to utilise the next dry season for offshore exploration work.
"Maybe, this is a very tight timeframe but I'll try to make it happen by advancing the schedule," he told reporters in the energy ministry's conference room.
The Council of Advisers on Tuesday night approved the model PSC and other relevant documents for international tender.
After completion of the bidding round, the winning bidders will sign contract on the basis of the model PSC to conduct their exploration, implement development plan and extract oil and gas in the country's maritime area.
Under the model PSC, the country's maritime area has been divided into 28 blocks for the hydrocarbon exploration. Of the blocks, eight are located in the shallow waters while the rest in the deep-sea area.
For the shallow blocks, a total of eight years time will be given to the contractors and they will have to conduct exploration within three years as initial period. Then another two years will be given for extended exploration and another two years for second-time extension.
For the deep-sea blocks in the Bay of Bengal, the contractors will get a total of nine years to carry out exploration work. Of the time, five years will be given for initial exploration and then it will be extended in two phases.
They will get two years as first extension and another two years as second extension.
On completion of the exploration, the contractor will submit a 25-year development plan for gas field and 20-year plan for oil field. However, they can extend the plan period by an additional five years provided Petrobangla's consent.
The first round of bidding for striking hydrocarbons in the country was held in 1994. The second round took place in 1998 with the whole country's offshore and onshore areas divided into 22 blocks.
A total of eight blocks were allocated to international oil companies (IOCs) under a number of production-sharing contracts (PSCs) for oil and gas exploration under the second-round bidding.
The move for third-round bidding was initiated during the immediate-past BNP-led alliance government.
But after a break of about 10 years from the second-round bidding, the third round finally got a physical move under the caretaker government as it approved the model PSC.
There are a number of differences between the PSC and the model PSC.
Under the model PSC, all but three things--bank guarantee, profit sharing and fiscal incentives--will be settled through the bidding.
"We kept little scope for negotiation... Most of the things will be settled through bidding process," said Energy Secretary Mohammad Mohsin, who was present at the briefing.
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