There is a great potential of finding hydrocarbon in Bangladesh's maritime territory as both India and Myanmar have already discovered remarkable gas reserves in the Bay of Bengal. The country's offshore areas are now well-demarcated following verdicts from international courts.
Bangladesh government is scheduled to invite international oil companies (IOCs) for hydrocarbon exploration in the Bay next year. State-run Petrobangla has already placed a proposal to the Energy and Mineral Resources Division (EMRD) under the ministry of power, energy and mineral resources to launch the new bidding round in 2016.
It has already drafted block maps and necessary documents to float the tender to exploit hydrocarbon deposits in Bangladesh's sovereign territory in the Bay. The area will cover around 75,000 sq km area in the Bay with the water depth ranging from 20 metres and 2,500 metres.
Currently, Bangladesh is entirely dependent on onshore fields for natural gas, with current production hovering around 2,470 million cubic feet per day (mmcfd) compared to demand for more than 3,000 mmcfd.
Australian oil and gas exploration company Santos was the operator of the country's lone operational offshore well, Sangu-11, in the Bay of Bengal, which had been shut permanently on October 01, 2013.
A joint venture firm of Australia's Santos and Singaporean company KrisEnergy has completed 2D seismic survey in the shallow-water hydrocarbon block SS-11 in the Bay of Bengal recently as the maiden operator in the country's maritime territory.
Under the planned 2016 bidding round, the bid-winning IOCs will be relieved of carrying out 2D seismic surveys. Petrobangla has already floated an international tender for carrying out 2D non-exclusive multi-client seismic surveys within the sovereign offshore areas of Bangladesh to explore offshore hydrocarbon deposits. The proposed 2016 offshore bid winners would get data from the contractors who would be awarded the work to carry out 2D surveys.
Bangladesh had earlier floated bidding rounds four times in 1974, 1993, 2008 and 2012. During all the previous rounds, the winner IOCs did carry out 2D surveys apart from oil and gas exploration both in onshore and offshore blocks of the country.
The country needs around 22.76 trillion cubic feet (tcf) of gas until 2025. On the contrary, the current recoverable gas reserve stands at 16 tcf that would last around 16 years.
Probable onshore fields are yet to be fully explored. Local experts have, however, done some commendable job in finding new reserves of hydrocarbon in some old wells. Steps to harness gas from those fields should gain momentum by now. But the authorities are reportedly not yet demonstrating proper enthusiasm and zeal for the purpose.
On the other hand, many IOCs did not earlier respond to the bidding process for shallow sea blocks in the Bay of Bengal. Out of the nine blocks on offer, only two bidders participated for three blocks. That too was a lukewarm response as those were received after expiry of an extended deadline.
The IOCs, according to available reports, have positively responded to the offshore bid in the Bay offered by India and Myanmar. Both the countries have provided relevant data to the IOCs needed for such exploration drives. Why Bangladesh lags behind on this count baffles many.
However, the lukewarm response of the IOCs provided some good lessons for Petrobangla. Under new terms and conditions, the Petrobangla may allow the contractors of new deep sea blocks to carry out tax-exempted operational activities and sell half of their discovered and extracted volume of hydrocarbon resources to any third party inside the country.
It also proposed raising the hydrocarbon price and cost recovery limit in a single year to attract the prospective IOCs to bid for the three deep water blocks in the Bay of Bengal.
Bangladesh has been facing critical gas supply situation for the last two years due to its discouraging performance about exploration, exploitation and extraction of gas from its 'hidden' reserve.
In fact, a number of IOCs had earlier written to the energy ministry with a request to carry out a seismic survey in the Bay of Bengal, prior to floatation of tender. They had also recommended splitting the country's offshore sea territory into a number of small gas blocks to accommodate an increased number of IOCs in offshore hydrocarbon exploration. However, the government remained conspicuously silent that time.
The next bidding round for hydrocarbon exploration in the offshore of the Bay of Bengal is critically important for Bangladesh. An expedited process of bidding is necessary in view of the country's depleting gas reserves. The recent discovery of huge gas reserves by India and Myanmar in the Bay near the country's economic zone is certainly an eye-opener for Bangladesh.
Besides, as a coastal country of the Bay of Bengal, the interests of Bangladesh are associated with the sea. The sea resources play a crucial role in various economic activities including poverty alleviation, achieving self-sufficiency in food production, maintaining environmental balance and facing the adverse impacts of climate change.
The government should adopt an integrated framework involving the private sector for acceleration of the activities in the field of trade and investment. The country needs to develop expertise and skilled manpower to explore the resources like high-value fishes, energy, heavy minerals and so on.
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Making IOCs interested in the bidding for hydrocarbon exploration
Shahiduzzaman Khan | Published: April 26, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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