The government has endorsed the proposal to amend the Model Production-Sharing Contract (PSC) 2012 under pressure from the contractors, having failed to woo tenders for deep-sea oil, gas exploration.
The amendment broadens the scope to sell oil-gas to the third party without giving Petrobangla the first right to buy and hikes the cost of purchasing gas or oil from from the exploring company.
The new proposal also exempts the exploration company from paying the corporate tax and transportation tariff charge.
Finance Minister Abul Maal Abdul Muhith briefed reporters on Tuesday after a meeting of the Cabinet Committee on Economics Affairs.
Muhith said, “Those interested about taking part in bidding said PSC’s conditions were not easy. Exploration in deep sea is expensive and risky. Petrobangla promised to to look into the matter.”
The changes into the Model PSC-2012 were brought after taking these matters into consideration, he added.
After the PSC-2012 was formulated in September last year, state-run Bangladesh Oil, Gas and Mineral Corporation or Petrobangla in December the same year had floated tenders for oil, gas explorations in the 12 offshore blocks in the Bay of Bengal.
Three companies bid in two phases for four of the nine shallow blocks in the sea.
But Petrobangla halted the tender after it received no bidding from international exploration firms. Then initiatives were taken to ease the conditions by amending the PSC following demands of the contractors.
Muhith on Tuesday said, “As per the [present] PSC, the exploring company will sell 1,000 cubic feet gas in $5.5. The proposal to hike that to $6.5 has been approved. The proposal to raise the price by 2 percent every year has also been given the go-ahead.”
The Model PSC had said that the new gas would be shared by Petrobangla and the drilling company. The firms would have to ask Petrobangla first up if it wanted to sell the gas from its share. If Petrobangla was not interested, the firm would be allowed to sell to a third party.
But this condition has been changed, Muhith said. “The exploring firm will be able to sell up to 50 percent of its share directly to the third party in the local market even without proposing to Petrobangla in the first place.”
The Finance Minister said, “The exploration firm will also not have to pay the corporate tax and fee (transportation tariff charge) for supplying oil and gas as per the amended Model PSC.”
Source: Bd news24
