The Financial Express

Four firms shortlisted to upgrade offshore model production sharing contract

| Updated: January 05, 2022 16:28:32

Four firms shortlisted to upgrade offshore model production sharing contract

Four consulting firms have been shortlisted to award the job of upgrading Bangladesh's model production-sharing contract (MPSC) and pave the way for launching offshore bidding for hydrocarbon exploration.

The firms are: Wood Mackenzie, Pricewater-houseCoopers (PwC), GaffnneyCline and IHS Markit & RPS Group. Eight global firms had submitted the expressions of interests (EOIs) for the job.

State-owned oil, gas and mineral corporation (Petrobangla) has sent the request for proposal (RfP) documents last week and asked the selected firms to submit those back by mid-February next, a senior Petrobangla official told the FE on Tuesday.

Petrobangla will then select one of them based on their proposals to update the terms and conditions of the existing offshore MPSC 2019.

The consultant's job will be to make the MPSC 2019 more attractive, competitive and internationally acceptable for oil and gas exploration and development, said the official.

The existing model PSCs for both onshore and offshore were prepared in 2018 and were approved by the cabinet committee on economic affairs in 2019.

But the spread of coronavirus after 2019 has changed the global economic scenario, especially of the energy sector, when the demand for LNG (liquefied natural gas) soared rapidly.

So, updating the model PSC is necessary to lure the IOCs in the post-COVID scenario, said the Petrobangla official.

Under the existing model PSC 2019, the gas price for deep sea blocks was set at around $7.26 per MMBtu (million British thermal unit), up by 11.69 per cent from the previous MPSC.

The offshore gas price was set to increase every year by 1.5 per cent from the date of first gas production, according to the model PSC.

Petrobangla had floated the last bidding round nine years back in 2012 through which shallow-water blocks and one deep-water block were awarded to contractors. But the contractors have not drilled any single exploratory well so far.

ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are jointly exploring shallow-water blocks SS-04 and SS-09.

Bangladesh currently has a total of 26 open blocks in offshore areas, of them, 11 are located in shallow water and the remaining 15 are in deep water.

The country's natural gas output is currently hovering around 2,842 million cubic feet per day (mmcfd), of which 541 mmcfd is regasified imported LNG, according to Petrobangla statistics as on January 3, 2022.

The entire local production comes from onshore gas fields.

[email protected]

Share if you like