Gas and oil exploration: yet another failed bid

Belying expectations of the Petrobangla officials, this time also the international bid Bangladesh floated to woo international oil companies (IOCs) has drawn a blank. Not a single IOC did come for bidding for bay hydrocarbon exploration. The head of the state-run Petrobangla, according to an FE report, was clueless about the lack of response. But market insiders have blamed the lack of confidence and inadequate data on offshore blocks for IOCs becoming non-responsive. The officials concerned have time and again made public statements claiming that the incentives offered to the prospective IOCs this time are far more attractive than before. If it is so, they need to explain the reasons for the latest debacle.

The offer made by the Petrobangla to intending IOCs is no doubt lucrative. A total of 24 offshore blocks — of which 15 are deep sea and the rest nine shallow-sea — are on offer for exploration. Production-sharing contracts (PSCs) are more attractive than ever before. The question is, if the tender has been reviewed well by energy experts in order to protect the country's long-term interests. After all, the instruments of contracts to be signed for exploration of gas and oil between Petrobangla and the successful IOCs were prepared during the previous regime known for leaving leeway for extracting commissions or to put otherwise, graft. Even some IOCs at times proved they are not as credible as they claim to be. The long-drawn litigation between the Scimitar

Exploration Limited and Bangladesh provides for a strong evidence of strained relations and creation of bad blood. Hopefully, the inexperience the ministry concerned showed in the early 90s when the Scimitar was awarded the contract will not recur this time while signing any oil exploration deal.

Let the positive vive as demonstrated by the IOCs sustain for the nine-year period of exploration. Regarding the energy crisis Bangladesh is now facing, it would be wiser had the drilling of a few of the offshore blocks been completed meanwhile. Faulty energy policy pursued by the previous government has drained the country's forex reserve and will continue to do so until the companies engaged in exploration hit offshore gas or oil or both reserves and go for production. Even this intervening period will stymie the country's growth potential.

There are no two opinions about the country's need for achieving self-sufficiency in energy. Bangladesh now faces the dilemma over its options for fossil fuels and renewable energy. Not only the developed countries but also some developing and underdeveloped ones have embarked on ambitious plans for production of targeted green energy by specific periods. Already countries like Costa Rica, Uruguay and Kenya have made tremendous progress in meeting their electricity need from renewable energy. But the world's largest carbon emitter China is also the leading global investor in and producer of renewable energy. On that count Bangladesh lags far behind. Because the Azerbaijan climate conference failed to make any headway in bridging the difference between the developed world and poor and vulnerable countries, Bangladesh will get ample time to make rational use of its offshore gas and oil if and when produced. But it should carry on its renewable energy programmes undeterred.