Govt yet to award gas block to Tullow in disputed area

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FE Report
The government is still indecisive over awarding a shallow water gas block to Irish Tullow Oil as it could not reach a consensus with the foreign firm over exploration in disputed offshore areas, officials said Sunday.
Tullow won the shallow water offshore gas block SS-
08-05 during the country's latest round of bidding in 2008 and now waiting to sign a production sharing contract (PSC) with state-owned Petrobangla.
But the negotiation between Petrobangla and Tullow before signing the PSC was stalled over the difference of opinion, said a senior Petrobangla official.
Government had urged Tullow to refrain from exploration in disputed areas inside the block as neighbouring India and Myanmar lodged protest over the delimitation of boundary.
Tullow, however, sought a 'ring fenced' area adjacent to its block as compensation.
"But we cannot provide Tullow with a slice of new area from its adjacent block," said the Petrobangla official.
Tullow is currently producing around 120 million cubic feet per day (mmcfd) from its Bangura gas field at Lalmai area under block-9.
The government, however, concluded negotiation and signed agreement with US oil giant ConocoPhillips, which won two deep water gas blocks during 2008 bidding round.
ConocoPhillips has been selected for two blocks -- DS-08-10 and DS-08-11 -- although it became the lowest bidder for eight offshore blocks.
PSCs for these blocks would be signed with the US firm sometime in December, said a Petrobangla official.
In their bids ConocoPhillips has pledged to invest US$110.66 million and offered a bank guarantee of the same amount for its two blocks, while Tullow committed to invest $49.85 million and offered a bank guarantee of $33.9 million.
The cabinet committee on economic affairs decided to offer two offshore blocks to the ConocoPhillips and one to Tullow Oil in August 2009.
But signing PSCs remained stalled due to overlapping dispute with neighbours as Myanmar and India have claimed part of ownership over the three offshore blocks awarded to ConocoPhillips and Tullow Oil.
Bangladesh had asked both ConocoPhillips and Tullow Oil not to carry out hydrocarbon exploration in the disputed areas of the offshore blocks, forcing the companies to suspend their exploration work there.
Bangladesh is now holding talks with neighbours to settle the maritime boundary disputes for kicking off explorations in the prospective offshore structures and address the country's perennial energy crisis.