Exploration; no export
Petrobangla, state-run oil, gas and mineral resources corporation, yesterday invited international companies to bid for oil and gas exploration in 12 blocks in the Bay of Bengal with no scope for export.
Under the new model of production sharing contract (PSC) "Bangladesh offshore bidding round 2012", the oil companies, however, are allowed to sell oil, gas and condensate to the government at higher prices.
The country will pay them $5 per million cubic feet of gas. Last year Bangladesh made a deal with US oil giant ConocoPhillips, offering $4.5 per mcf gas. Before that it used to pay $2.90 per mcf to oil companies.
Nine of the 12 sea blocks allocated for the latest bidding are in shallow waters and the three others are deep-sea blocks, Petrobangla Director Muhammad Imaduddin told reporters at his office in the capital.
"We did not keep the word 'export' in the document inviting tenders. So there should not be any confusion over it."
Imaduddin is hopeful that major international companies would take part in this bidding.
The interested companies will have to submit their tender documents between December 17, 2012 and March 18, 2013, he said.
The shallow blocks -- SS-02, SS-03, SS-04, SS-06, SS-07, SS-08, SS-09, SS-10 and SS-11 -- are located at a maximum depth of 200 metres and cover about 51,589 square kilometres in total.
The block SS-04 has an off-shore gas structure discovered earlier in Kutubdia included and the block SS-10 has another off-shore gas structure in Teknaf added. The companies which will be awarded these two blocks will have to explore these off-shore fields.
The deep-sea blocks -- DS-12, DS-16 and DS-21 -- cover an area of 10,041 square kilometres at a depth between 200 and 2,000 metres.
Petrobangla might award the blocks to the winning bidders by the first week of July next year, its director said.
The cost recovery limit per calendar year shall be a maximum of 55 percent of oil, natural gas and condensate available in the areas permitted.
Considering the high international oil prices, the new PSC is made, asking the contractors to pay Petrobangla's PSC Research Fund US10 cents per barrel instead of previous 3 cents on their share of profit in gas and condensate every year.
Speaking at a Petrobangla press conference, Energy Adviser Tawfiq-e-Elahi Chowdhury said the bidding was part of the government plan to supply fuel from domestic sources to the medium and long-term power projects.
He said the bidding would ensure a balance between the country's interests and the companies' interests.
The new PSC has the minimum price of the high sulphur fuel oil set at $100 a barrel which was previously $70 and the ceiling price at $200 increased from $180. The prices have been upped, keeping the international oil price trend in mind.
The winning contractor of SS-04 and SS-10 will have to give 15 percent carried stake to the government at both Kutubdia and Teknaf off-shore fields though Bangladesh will enjoy 10 percent carried stake in other blocks.
State Minister for Energy Muhammad Enamul Huq and Energy Secretary Mohammad Mejbahuddin were present at the press conference.