Bid documents for gas exploring in Bay on sale

FE Team | Published: December 19, 2012 00:00:00 | Updated: February 01, 2018 00:00:00

M Azizur Rahman
State-owned Petrobangla started selling officially the bid documents including information package, promotional package and data package to interested global firms from Monday for oil and gas exploration in the Bay of Bengal.
"We shall receive bids from the international oil companies until March 14, 2013," Petrobangla director for production sharing contract (PSC) Muhammad Imaduddin told the FE.
Petrobangla is selling information package at US$ 100 or Tk 10,000 each and promotional package at $7,000 or Tk 560,000 each, he said.
The lnformation Package includes a brochure providing geological and related information, model PSC 2012, details of the blocks offered (block map) and the Bangladesh Petroleum Act 1974.
The Promotional Package includes the information that enable companies to assess the geological prospects of the blocks on offer that also contains seismic sections, gravity, magnetic and geological maps.
Petrobangla launched on December 9 the new offshore bidding round for hydrocarbon exploration by international oil companies (IOCs) in the Bay of Bengal.
A total of 12 'dispute-free' oil and gas blocks - nine in shallow waters and three in deep waters - were put on offer under the bidding round titled "Bangladesh Offshore Bidding Round 2012."
The shallow-water gas blocks put on offer are SS-02; SS-03; SS-04; SS-06; SS-07; SS-08; SS-09; SS-10 and SS-11.
Three deep-water gas blocks offered are DS-12; DS-16 and DS-21.
The area of shallow-water gas blocks ranges from 4,463 square (sq) kilometres (kms) to 7,692 sq kms, while the deep-sea blocks range from 3190 sq kms to 3516 sq kms.
Water depth of shallow-water gas blocks ranges from three metres to 200 metres, while that of deep waters ranges from 200- 2000 metres.
The blocks have been put on offer in line with the verdict from the International Tribunal for the Law of the Sea (ITLOS) that settled the maritime boundary dispute with neighbouring Myanmar.
None of the blocks disputed with neighbouring India will be offered in the bidding round.
Petrobangla has also put on offer two lately discovered shallow-water fields -- Kutubdia and Teknaf -- under a 'special package' for exploration in this bidding round.
Kutubdia has been tagged to SS-04 and Teknaf to SS-10 and the IOCs that will be awarded licences will be entitled to explore the fields.
As part of the special package for the fields, licence holders will have to give state-owned Petrobangla an additional 5% of "profit-gas" to be produced, on top of Petrobangla's regular profit-sharing structure.
The gas price has been pegged to high sulfur fuel oil prices (HSFO). The floor price for HSFO has been fixed at US$ 100 per tonne and the ceiling price at $200 per tonne for the 2012 bidding round.
The price has been worked out at around $5 per unit (1,000 cubic feet) without the corporate tax, which is to be paid by the contractors.
For shallow-water gas blocks, the gas price will be 100 per cent of HSFO price ex Singapore with biddable discounts.
For deep-water gas blocks, the gas price will be 110 per cent of HSFO price ex Singapore with biddable discounts, Petrobangla director, PSC, Muhammad Imaduddin said.
In the 2008 bidding round, the floor price for HSFO in the formula was fixed at $70 per tonne, and the ceiling price at $180 per tonne.
The price under the 2008 bidding round worked out the gas price at around $4.5 per unit without the corporate tax.
State-owned Bangladesh Petroleum Exploration Company (Bapex) will take 10 per cent carried interest stake in all the shallow-water gas blocks.
The cost recovery limit shall be the maximum of 55 per cent per calendar year of all available oil or natural gas or condensate or natural gas liquid (NGL).
The contract period for exploration will be eight years with a five-year initial exploration period, and a three-year subsequent exploration period.
The contractors will be allowed 20 years for an oil field and 25 years for a gas field.
There is a provision for unitisation between two adjacent blocks, where a single geological structure spreads over both the blocks.
Other features of the PSC include full repatriation of profits; no signature bonus or royalty; no duties for equipment and machinery imported for operations during the exploration, development and production phases; provision of assignment of interest and share transfer; 100 per cent cost recovery; and production bonuses.
Gas export has been prohibited under the new bidding round.
In the 2008 bidding round, gas exports via pipeline were banned but liquefied natural gas (LNG) exports were allowed.
The companies would also be able to sell the gas produced directly to third parties on the domestic market, without going through Petrobangla, but the latter will have the first right of refusal, he said.