Invitations have been sent to 55 international oil companies (IOCs) to explore for offshore oil and gas in 24 blocks in the Bay of Bengal.
And everything has been set up, so that each party will benefit, according to the PM's energy advisor.
The bid advertisement was published in The Economist, a leading international media outlet, in an attempt to draw in large corporations from all over the world.
These details were disclosed on Monday at the Petrobangla office during a press conference regarding offshore bidding.
Under a new Production Sharing Contract (PSC) to increase energy production, the government on Sunday announced an international bid round for the exploration of oil and natural gas in 24 blocks in the Bay of Bengal. It gives bidders until September 9, 2024, and it was published on the websites of pertinent government agencies, including Bangladesh embassies abroad, as well as nine local newspapers and one international newspaper, The Economist.
Petrobangla said that the contract will be signed with successful bidders according to Bangladesh Offshore Model Production Sharing Contract-2023. They want companies to explore 24 blocks in the Bay of Bengal.
Nasrul Hamid, State Minister for power and energy, said at this event that they want big companies to join in the bidding. They plan to have meetings after Ramadan to get international companies involved.
Tawfiq-e-Elahi Chowdhury, energy advisor to the prime minister, talked about the benefits of the bidding at the event. He said companies that bid offshore won't have to pay taxes. He also said that if the price of oil in the international market goes up, the companies will make money, but if it goes down, the government will benefit.
Many intellectuals in the nation, Chowdhury claimed, are dissatisfied with the potential and capabilities of their own country. It would be equivalent to flinging ash in the faces of detractors to implement the new PSC and call tenders in light of it.
55 international oil and gas companies (IOCs) who have contacted the government as possible bidders have received the bidding invitation thus far, according to Tawfiq Elahi Chowdhury, who spoke with a news agency.
Nurul Alam, secretary of the energy ministry, said they're planning to let companies bid for work both onshore and offshore. He further said, lots of foreign companies are interested in the bidding. Some big companies have already given the government information about where they want to explore for oil and gas.
Zanendra Nath Sarkar, who runs Petrobangla, said they're telling companies about the opportunity in nine local newspapers and even in a foreign newspaper called The Economist.
Sarkar thinks it's a good deal for everyone, but he didn't say how many companies are interested.
According to the press conference, companies have until September 9 to submit their bids, and if they win, they can work for 20 or 25 years.
This is the first big bidding opportunity since 2016. In 2019, they signed a new contract, but they didn't let companies bid publicly until now.
The new contract says companies will be paid based on the price of oil, which changes a lot. Right now, if oil costs $80 per barrel, gas from the Bay of Bengal will cost $8. If oil costs $100, gas will cost $10.
The tender agreement for this year specifies that the full return of profits, the absence of any further financial advantages or royalties, attractive gas prices that remain constant in comparison to global benchmarks, and market prices in South and Southeast Asia will all be taken into consideration when determining oil prices.
Furthermore, machinery and equipment imported for the purpose of handling petroleum within the tax exemption will not be subject to duties. In addition to covering the contractor's corporate income tax liability, Petrobangla will also cover the bank guarantee required to complete the bare minimum of exploration work.
Even after Dhaka won a dispute over the maritime boundary with neighboring Myanmar and India, much of Bangladesh's offshore area remains unexplored.
Drilling has just started on two shallow water blocks that are part of an exploration contract with ONGC Overseas Limited and Oil India Limited, according to officials.
As the nation settled maritime disputes with India in 2012 and with Myanmar in 2014, it is extending its invitation for oil and gas exploration to nine shallow sea blocks and fifteen deep sea blocks—the first in eight years.
Presently, Bangladesh produces about 2,300 million cubic feet of gas per day from its 21 gas fields, while the South Asian nation imports about 700 million cubic feet of gas per day to meet its market demand.
Based on data from the Bangladesh Petroleum Corporation, the country's fuel consumption increased by up to 8 percent annually, with Bangladesh requiring approximately 6.7 million tonnes of fuel in the fiscal year 2021–2022.