Bangladesh invites international bids for offshore oil, gas exploration

Bangladesh has floated an international tender for the exploration of oil and gas in 24 maritime blocks in the Bay of Bengal under a new Production Sharing Contract (PSC) in a bid to enhance energy production.

A notice was published on the website of Petrobangla, the state-owned energy corporation, and in various English-language newspapers on Sunday, reports bdnews24.com.

The invitation, the first in eight years, extends to nine shallow sea blocks and 15 deep-sea blocks for oil and gas exploration.

Bidders are instructed to submit their proposals by 1pm on Sept 9, with the tender documents set to be unveiled an hour later in the presence of official observers.

The Bangladesh maritime zone is segmented into 26 blocks in total, 15 of which are located in deep waters and 11 in shallow waters.

Currently, Indian company ONGC is conducting explorations in two blocks. The new tender opens up opportunities for the remaining 24 blocks.

Prominent international firms, including US-based Chevron and ExxonMobil, have already expressed interest in investing. The tender is open to participation from 55 international companies.

"The new PSC is designed to be more appealing and conducive to investment than its predecessors. Following the tender announcement, we plan to initiate broad promotional activities with the aim of attracting the most competent and efficient entities for the exploration tasks," Petrobangla Chairman Zanendra Nath Sarker said.

The last call for an international tender by Petrobangla for offshore oil and gas exploration was in 2016.

Although a new OSC was established in 2019, no subsequent tenders were issued until now.

In July 2023, the government approved a revised PSC, which enhances incentives for international investors.

The 2019 PSC pegged gas prices at $7.25 per 1,000 cubic feet for deepwater explorations and $5.5 for shallow water.

The updated PSC does not specify a fixed price. Instead, gas prices will be linked to 10 percent of crude oil prices, adjusted according to global market rates.

Additionally, the new PSC modifies the profit-sharing arrangement between the block leasing company and Petrobangla.