Petrobangla is set to award three shallow-water blocks and a discovered gas field in the Bay of Bengal to US-based ConocoPhillips and India’s ONGC Videsh Ltd for oil and gas exploration by September, a top official said.
“The necessary legal formalities including the approval from the Cabinet Committee on Economic Affairs to ink the production sharing contracts (PSCs) with the international oil companies (IOCs) have been completed,” Petrobangla director for PSCs Muhammad Imaduddin said.
He said Petrobangla will invite the IOCs soon to ink initials by August and sign the PSCs by September 2013.
ConocoPhillips will be awarded block SS-07 and ONGC Videsh Ltd blocks SS-04 and SS-09, he said.
Bangladesh Petroleum Exploration and Production Company Ltd (Bapex), will have a 10 per cent carried interest stake in all the three blocks.
The area of these blocks ranges from 4,463 to 7,692 sq km (1,723-2,970 sq miles), at water depths of 3-200 metres.
With the signing of the PSCs, ONGC Videsh will establish rights to explore Bangladesh’s first discovered offshore gas field, Kutubdia, as well.
Kutubdia was offered under a “special package” and was tagged with SS-04 during the bidding round.
ConocoPhillips and ONGC Videsh Ltd were the only
two firms that came up and submitted bids for the total three blocks, on close of bid submission deadline on April 2, against nine shallow-water blocks Bangladesh offered in the latest bidding round in December 2012.
Under the model PSC for the shallow-water blocks, the gas price has been pegged to high sulfur fuel oil (HSFO) prices.
The floor price for HSFO has been fixed at $ 100 per tonne and the ceiling price at $ 200 per tonne.
The latter works out to around $ 5.50 per Mcf (1,000 cubic feet) before a 37.5 per cent corporate tax that has to be paid by the contractor.
Other features of the PSC are: the licence holder will have the right to full repatriation of profits; will not be charged any signature bonus or royalty; would not need to pay duty for equipment and machinery imported for operations during the exploration, development and production phases; will have 100 per cent cost recovery; and production bonuses, the official said.
The contractor can also sell gas independently to third parties instead of going through the state-run Petrobangla.
The company will be allowed to market the gas domestically as well, but Petrobangla will have the first right of refusal.
With the signing of the PSCs, ONGC Videsh will make entry into Bangladesh’s oil and gas exploration activities, if the blocks are awarded to the Indian company.
While it would be the third offshore gas blocks of ConocoPhillips as it was awarded two deep-water blocks, DS-08-10 and DS-08-11, during the country’s previous 2008 bidding round.
ConocoPhillips has already started exploration activities in its two deep-water blocks.
Exploration could start in the new shallow-water blocks this winter, starting as early as October, Petrobangla Chairman Hussain Monsur said.
Bangladesh needs new exploration to meet the growing natural gas demand, Petrobangla officials said.
The country’s offshore gas output would drop to nothing in September, when the operator of the Sangu-11 gas well expects to shut it sometime in the third quarter.
Source: The Financial Express
Why isn’t Bangladesh sold to other developed countries for the benefit of the powers-that-be who have claimed this unfortunate country to be their ancestral property? We ‘stupid’ people just wonder. In every field we have failed to take our country to the level we should have 43 years into independence. But no, we didn’t have the fortune to get visionary, patriotic, dedicated and honest leaders. So isn’t it better to lease out this wretched country to others that may exploit us even more ruthlessly and fatten the belly of the banias and brokers of this ‘sonar Bangla’?