Offshore gas exploration tenders by increasing facilities
In the latest tender, seven foreign companies purchased tender documents but none submitted.
This time some facilities have been extended to attract foreign companies to the new PSC.
The government is inviting international tenders for oil and gas exploration in the sea. No company participated in the previous tender. So this time some benefits have been extended to attract foreign companies in the new production partnership agreement (PSC). Gas price per unit has been increased. The Energy Department believes that this may increase the interest to participate in the tender.
Sources of Bangladesh Oil, Gas, Mineral Resources Corporation (Petrobangla) say that seven foreign companies bought tender documents in the last offshore tender but none submitted. PSC has been revised by contacting them and knowing the reasons and opinions for non-submission. The Ministry of Power, Energy and Mineral Resources has already approved it. The tender notice will be published on Sunday.
Maritime boundary disputes with India in 2012 and with Myanmar in 2014 were settled. As a result, new possibilities are created with large areas in the sea. The Bay of Bengal is divided into a total of 26 blocks, 15 in the deep sea and 11 in the shallow sea. However, before this, exploration of oil and gas in the sea began. So far a total of four companies have started searching at different times but all have left without completing the work. No search operations are currently underway at sea. So tenders are being invited for all 26 blocks.
Director of Petrobangla (PSC) Md. Shoaib told Prothom Alo that maximum efforts have been made to make PSC attractive for foreign companies by prioritizing the interests of the country. Tenders are being invited. This time it is expected that there will be a good response in terms of participation and competition.
Two responsible officials of Petrobangla said that those interested can buy the necessary tender documents from June 1. At the same time, they can also buy data from sea surveys. Time is being given till November 30 to purchase and submit tenders. Petrobangla is inviting 55 companies by direct mail.
According to the PSC analysis, according to PSC-2019, the price of gas per thousand cubic feet was kept at USD 170 for deep sea; And for the shallow sea, the price is five and a half dollars. In PSC 2023, 10 percent of the price of Brent crude oil (crude fuel oil) is assumed in both deep and shallow without fixing any fixed price. This time in PSC-2026 it has been increased to 11 percent in deep sea and 10 and a half percent in shallow sea. If the price of fuel oil increases in the world market, the price of gas will increase proportionally. If the price of oil is $100 per barrel, the price of deep sea gas will be $11. However, for every five years Brent prices will now have upper and lower limits, so that gas prices cannot rise or fall too much.
According to the contract, the contracting company will supply the gas pipeline from the sea. For this pipeline, the contracting company will get a tariff for gas storage, supply and consumption. This facility was not available in the last PSC. The agreement has also changed the formula of profit sharing between multinational companies that come as contractors and Petrobangla. If the contractor chooses to continue the work even after the search fails, his profit share may increase by 1 to 2 percent. Earlier, the interim government had given an advantage to foreign oil and gas exploration companies by amending the labor law. The company's profit share in the workers' fund has been reduced from 5 percent to 1.5 percent. This will also increase the interest of contractors to participate.
Some of the previous benefits remain this time. Taxes and duties are exempted from imports. Petrobangla will pay income tax on behalf of the contractor. If the gas is not bought by Petrobangla, the contractor can sell it to a third party within the country. If there is no demand in the country, you can export. If a dispute arises between the two parties, either party can go to the International Court of Arbitration. State company Bangladesh Petroleum Exploration and Production Company (Bapex) will have a 10 percent stake in the shallow sea.
People related to the sector say that the then Awami League government started importing liquefied natural gas (LNG) from 2018 to meet the gas crisis. They were more inclined to import than to explore for gas. Therefore, in 2019, despite the new PSC for offshore oil and gas exploration, tenders were not called. After that the new PSC-2023 was finalized after three years. Among these, the possibility of getting gas can be seen by carrying out multi-dimensional seismic (TUD) survey conducted jointly by TGS and Slumberger in the area of 12 thousand km line in the sea. The tender was called in March 2024. The interim government extended the tender submission period by three months after the pot change in August. The previous government did not call for new tenders as no one participated in it.
