Foreign firms seek govt position on awarding offshore blocks

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M Azizur Rahman
The foreign firms selected for exploration in nine offshore hydrocarbon blocks in the country's latest bidding round have again sought the government's position over awarding the blocks to the successful bidders, officials said Sunday.
Both the firms -US based ConocoPhillips and Irish Tullow - have sent letters to the energy ministry and sought the government's latest position over leasing of the blocks, a senior energy ministry official told the FE Sunday.
The caretaker government invited global bids for offshore exploration in February 2008 after dividing its sea territory in the Bay of Bengal into 28 blocks.
The previous interim government had made a commitment to sign the contracts with the selected bidders by October 2008.
But no decision was taken before the caretaker government handed over power to the elected government in December last year. This has put on hold the awarding of these offshore blocks for exploration by the two IOC.
The US oil and gas giant ConocoPhilips was selected for eight offshore blocks and Irish Tullow for one block by the state-owned Petrobangla in the bidding.
State-run oil and gas giant, Petrobangla made the selection after evaluating the offers from among seven companies including Chinese giant CNOOC Ltd, Australia's Santos Ltd and the Korean National Oil Corporation.
But six months have already elapsed since the October 2008 deadline, as declared during invitation of the global tender for signing of the contracts, expired.
Pointing to the latest position over the issue Petrobangla acting Chairman M Muqktadir Ali said the state-owned entity has already conveyed its decision regarding awarding of these blocks.
"We are still reviewing the issue," said a energy ministry official.
If awarded, the ConocoPhillips would be given, up to nine years' time for exploration in the eight deep-water blocks and Tullow would have eight years for the single shallow-water block, from the date of signature.
Two selected companies have pledged to invest a total of $492.52 million in exploration.
ConocoPhillips offered to invest $442.67 million and has pledged to provide a bank guarantee of the same amount against four contracts for eight offshore gas blocks.
Tullow committed to invest $49.85 million in one shallow water block and offered bank guarantee worth $33.9 million against their exploration works.
The deep water gas blocks for which the ConocoPhilips was selected are DS-08-10, DS-08-11, DS-08-12, DS-08-15, DS-08-16, DS-08-17, DS-08-20 and DS-08-21.
Tullow Bangladesh has been selected for the shallow-depth block SS-08-05.
The UK's Cairn Energy-operated Sangu gas field is the country's lone operational offshore gas field as of today.
According to experts, there are major gas reserves in the Bangladesh territorial waters of the Bay of Bengal and this assessment has been reconfirmed following huge discoveries by Myanmar and India in their respective areas in the bay.