Cabinet weighs 2 bids today

The cabinet today considers approval of offshore oil and gas exploration bids by two international oil companies in three blocks of the Bay of Bengal.
The energy ministry places its recommendations for awarding shallow water block SS-08-05 to Irish company Tullow Bangladesh and deep sea blocks DS-08-10 and 11 to US company Conoco Phillips South Asia New Ventures Ltd.
These proposals stemmed from the offshore oil and gas block bidding held in May last year. Seven oil companies had submitted proposals in 15 blocks out of total 28 blocks opened for the bid last year.
Conoco Phillips offered to invest $442.63 million under four PSCs for eight blocks, while Tullow proposed to invest $50 million in its single block. Tullow presently produces 100 million cubic feet gas per day from Bangura gas field in the country.
Petrobangla had recommended awarding all these nine blocks to these two companies following evaluation of their proposals.
However, due to maritime boundary disputes with India and Myanmar, Conoco's bid has now been cut down to two blocks only.
On May 14, Conoco's vice-president in a letter informed the government that most of the blocks it had proposed for overlap the maritime boundary claim by Myanmar and suggested that at the first level the government may award it with blocks that did not overlap the Myanmar territory.
After the cabinet approves this proposal, Petrobangla will negotiate with the two companies for signing separate production sharing contracts (PSCs).
The model PSC in this connection was finalised last year following consultation with PSC experts Kamal Hossain and Pedor van Meaurs. This PSC keeps Bangladesh Arbitration Act, 2001 for solving disputes between the PSC signatories, instead of the option for an international court.
While suffering from ever-increasing gas crisis, Bangladesh has never explored its deep sea for oil and gas before. India discovered a staggering 100 trillion cubic feet of gas reserve in the Bay and Myanmar seven trillion cubic feet of gas reserve.