The government has ruled out organising overseas roadshows to promote Bangladesh's offshore licensing round, saying it will instead engage directly with international energy companies while pursuing a lower-cost approach to attracting investment.
"I have no plan to arrange such overseas roadshows for the offshore bidding round. That was an Awami League-style practice that misused public money," Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmood told The Financial Express on Sunday.
He said roadshows were not an appropriate use of resources for a developing country like Bangladesh.
"Instead, I will speak directly with the top executives of potential international oil companies (IOCs), if necessary," the minister said.
The minister's decision is in line with Prime Minister Tarique Rahman's austerity measures aimed at reducing government expenditure across various sectors.
Last week, state-run Petrobangla and the Energy and Mineral Resources Division (EMRD) proposed organising promotional roadshows in three key energy and financial centres - Houston in the United States,
A global consultancy firm had offered to organise the events at a cost of more than Tk 200 million (US$1.62 million), a senior Petrobangla official said.
The previous Awami League government organised similar roadshows in New York, London and Singapore during December 2009 and January 2010 to attract IOCs to offshore exploration blocks and various power and energy projects.
However, no IOC subsequently signed exploration agreements with Petrobangla for hydrocarbon exploration in the Bay of Bengal, the official said.
Officials said Petrobangla launched the long-awaited offshore bidding round on May 24, offering 26 hydrocarbon exploration blocks to international oil companies under significantly improved contractual terms.
So far, around half a dozen companies - including Singapore-based KrisEnergy, Norway-based Rystad Energy, Japan's ONODO Inc, Beringia Power BD Ltd and Peal Energy and Construction - have purchased the information package, signalling interest in participating in the bidding process.
In addition to publishing notices in local newspapers, Petrobangla has emailed around 106 international oil companies worldwide, inviting them to participate. The bidding notice has also been published through Platts, part of S&P Global Commodity Insights.
The BNP-led government launched the offshore bidding round within its first 100 days in office in a bid to attract foreign investment into the energy sector amid growing concerns over Bangladesh's long-term energy security.
The initiative is intended to reduce the country's vulnerability to global fuel market disruptions arising from the prolonged Middle East conflict and restrictions on shipping through the Strait of Hormuz.
Petrobangla has also revised the model Production Sharing Contract (PSC) to revive international interest after previous offshore tenders failed to attract major global energy companies.
Of the 26 offshore blocks on offer, 11 are located in shallow waters and 15 in deep waters of the Bay of Bengal.
The shallow-water blocks are SS-01 to SS-11, while the deep-water blocks are DS-08 to DS-22.
The deadline for bid submission is November 30, 2026.
To make the contracts more attractive, the government has reduced the mandatory contribution to the Workers' Profit Participation Fund (WPPF) to 1.5 per cent from the previous 5.0 per cent.
Other incentives include relaxed obligations relating to pipeline construction following commercial discoveries, full repatriation of profits, the removal of signature bonuses and royalties, and wellhead gas prices linked to international Brent crude benchmarks, with floor and ceiling prices based on the lowest and highest average Brent prices over the previous five years.
Contractors will also be entitled to mutually agreed pipeline tariffs, payable by the buyer, to support investments in pipeline infrastructure for both shallow- and deep-water blocks.
The contracts further provide exemptions from duties on equipment and machinery imported for petroleum operations during both the exploration and production phases, while contractors' corporate income tax liabilities will be borne by Petrobangla.
Sources said the previous offshore bidding round launched by the Awami League government failed to attract any bids from international oil companies, although several firms had purchased bidding documents.
Industry insiders attributed the poor response to limited confidence among investors and inadequate geological data on the offshore blocks.
Petrobangla had kept that tender open for nine months after launching it on March 10, 2024, offering exploration rights for 24 offshore blocks - 15 deep-water and nine shallow-water blocks.
Before the current round, Bangladesh had launched only one offshore bidding round during the previous decade, in 2017, covering just three deep-water blocks, according to Petrobangla.
Although South Korea's Posco-Daewoo was awarded deep-water Block DS-12, the company withdrew in 2020 after completing a two-dimensional seismic survey.
Earlier, in 2012, Petrobangla awarded contracts for three shallow-water blocks and one deep-water block through another international bidding round.
At present, two international oil companies hold active production-sharing contracts in Bangladesh, either independently or through joint ventures.
US energy major Chevron is exploring and producing natural gas from three onshore gas fields under Blocks 12, 13 and 14, while Singapore-based KrisEnergy produces gas from the Bangura field under Block 9.
Azizjst@yahoo.com
