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Bangladesh Wednesday endorsed the draft model production-sharing contract (PSC) with lucrative baits to invite international tenders for hydrocarbon exploration in deep and shallow waters in the Bay of Bengal.
Officials said the cabinet committee on economic affairs approved in principle the Bangladesh Offshore Model Production Sharing Contract (PSC) 2023, with the focus now centred on exploring the untapped potential reserves of oil and gas in the country's expended territorial waters.
Finance Minister AHM Mustafa Kamal chaired the meeting. Cabinet division additional secretary Sayed Mahbub Khan briefed newsmen after the meeting.
The official, however, wouldn't give details of the model deal to be awarded international oil companies or IOCs but confirmed that Wednesday's approval is "final one for the draft".
State Minister for Power, Energy and Mineral Resources Nasrul Hamid, talking to reporters after the meeting, billed this "one as one of the top three model PSCs in the world".
Officials at Petrobangla had told the FE earlier that the seal of approval by the cabinet committee would expedite the launch of the country's long-awaited bidding round to explore oil and gas deep into the Bay of Bengal.
Under the new draft contract, the corporation will purchase hydrocarbons from exploration contractors at more than three times the current price of around US$2.75 per million British Thermal unit (MMBtu) as it is linking the price with same benchmark used to buy expensive liquefied natural gas (LNG) without capping, said sources.
Under the proposed pricing formula, the corporation's offered buying price to IOCs will be around US$7.6 per MMBtu as per the current global Brent crude price at US$ 76 per barrel.
In the draft model PSC, which is expected to be used in the next bidding round, the Petrobangla has proposed to fix the hydrocarbon price at 10 per cent of the three-month average Brent crude price.
It has also proposed to reduce government share in 'profit gas' to around 40 per cent from 70 per cent in previous contracts, in order to attract the IOCs as Bangladesh is in a desperate need for extracting domestic natural gas to cut costly LNG imports.
Sources said Bangladesh had not yet decided as to how many offshore blocks it will offer in the ensuing offshore-exploration bidding.
The country recently has completed multi-client survey in over one-third of Bangladesh's total sea area to delineate hydrocarbon reserves and outcome rollout is awaited while an acute primary-fuel crunch cripples the economy.
"We have completed 2D (two-dimensional) seismic survey in around 13,000 line-kilometer (LKM) area of our sea territory," said a Petrobangla official, adding that the results will be available by August.
The contractor, Tomlinson Geophysical Services Inc (TGS)-Schlumberger, a Norway-US joint venture (JV), is contractually bound to carry out survey in 32,000-LKM area.
The JV firm will carry out seismic survey in the remaining 19,000-LKM area from February 2024, he said.
The contractor had initiated the survey at the fag-end of its contractually obligated deadline for completion of the survey and completed it only recently. Experts of the JV firm are now assessing data of its surveyed area before rolling out the results.
"Through this survey the firm will be able to say primarily about presence of hydrocarbon deposit, if any, in the Bay," said the official.
Actual discovery of hydrocarbons could be ascertained only after carrying out 3D (three-dimensional) seismic survey and necessary drilling of wells in potential spots, he added.
Petrobangla would provide the survey output to interested IOCs with the non-exclusive multi-client seismic data of the offshore blocks to help them carry out basin evaluation, prospect generation, and participation in the upcoming bidding for exploration.
syful-islam@outlook.com