Offshore bids: Petrobangla seeks deadline extension after foreign cos' request

Bangladesh Oil, Gas, and Mineral Resources Corporation (Petrobangla) has proposed to the Ministry of Power, Energy and Mineral Resources for an extension for the submission deadline of offshore oil and gas exploration bids in response to requests from several foreign companies.

Petrobangla officials said the initial invitation for bids, covering 24 blocks including 15 in the deep sea and nine in the shallow sea in Bangladesh's maritime area, was announced on 11 March this year, with a submission deadline of 9 September.

While some companies requested a six-month extension, a three-month extension is currently being considered, they added.

Engineer Md Rafiqul Islam, director of Petrobangla (PSC), told The Business Standard, "Several companies have requested more time, leading to a proposal being sent to the ministry. The final decision now rests with the ministry."

He, however, declined to comment on the exact duration of the recommended extension.

This year, 55 top-tier companies, including American giants Chevron Bangladesh and ExxonMobil, as well as Japanese firms, have been invited to participate in offshore oil and gas exploration bids by Petrobangla. Many of these companies have shown interest.

Sources within Petrobangla indicate that the Production Sharing Contract (PSC) has been made attractive to lure multinational companies. Unlike previous PSCs, where gas prices were fixed, the current PSC allows gas prices to fluctuate with the international market price of Brent crude oil.

The price for each thousand cubic feet of gas has been set at 10% of the Brent crude price. The monthly average price of Brent crude will be used as the benchmark.

Petrobangla Chairman Janendra Nath Sarkar said several major companies are interested in oil and gas exploration and production in the sea. Regarding the extension requests, he said the matter is under consideration.

When asked about the companies involved, he said, "It would be inappropriate to disclose any names at this stage due to strategic reasons."

However, he said many renowned international companies have collected bid documents and purchased data from Petrobangla.

In an international seminar on 8 May this year, State Minister for Power, Energy, and Mineral Resources Nasrul Hamid said seven international companies bought tenders to participate in oil and gas exploration in the country's waters.

However, Petrobangla sources indicate that, in addition to these seven companies, several other international firms have also collected the tender documents. Furthermore, three times more companies than those that purchased the tenders have acquired the related data.

Bangladesh's deep sea comprises 15 blocks, while the shallow sea has 11 blocks. India's ONGC is currently exploring two shallow sea blocks. The current tender covers 24 blocks. The last tender was called in 2016, and although a new PSC was updated in 2019, no tender was called subsequently.

After nearly four years, the new PSC received final approval from the cabinet in July last year.