The government has shelved the plan to launch a fresh bidding for offshore drilling, fearing poor response from the potential global players due to the coronavirus pandemic.
"We are not thinking of launching the bidding round now," Energy and Mineral Resources Division secretary Anisur Rahman told the FE on Saturday.
Energy and Mineral Resources Division, or EMRD, under the Ministry of Power, Energy and Mineral Resources, or MPEMR, had a plan to float the tender on the 15th of this month.
Global oil and gas exploration companies might not be interested to take part in the competitive bidding to carry out 'expensive' offshore exploration job during the current situation as well as lower oil and gas prices in the international market, he said.
Mr Rahman also was not certain when the next offshore bidding round would take place.
Shelving the plan means the country's dependence on fuel imports, especially on expensive LNG, or liquefied natural gas, would go up, said sources.
The plan to float the bidding round was supposed to be announced on March 17, 2020 and the deadline for receiving bids from international oil companies, IOCs, was on March 10, 2021.
Signing of production sharing contracts, or PSCs, with the bid winning IOCs were planned by May 26, 2021.
Under the plan, state-run Petrobangla were to launch the bidding round offering offshore blocks adjacent to gas-rich blocks of Myanmar.
Officials said Bangladesh's deep sea turned 'idle' in terms of hydrocarbon exploration as the maiden deal with South Korean Posco International turned void recently.
With the exit of Posco from block DS-12, the country's oil and gas exploration activities in offshore areas limited to only several shallow water blocks, which too are progressing at a snail's pace, insiders said.
Energy expert Dr Tamim, however, said under the current situation of pandemic and the subsequent fall in oil and gas prices, a few firms will be keen to engage in deep sea exploration.
He, however, noted the country missed the opportunity to award deep offshore blocks to potential global contractors around a decade back when the government initiated the process of importing LNG
Petrobangla floated the last bidding round in 2012 through which shallow-water blocks and one deep-water block were awarded to contractors.
But not a single exploratory well was drilled by the contractors by this time.
Petrobangla rather extended the tenure of PSCs for each of the contractors by two years each.
To attract IOCs for the planned bidding round, Petrobangla had revised upward the price of natural gas in the latest model production sharing contract or PSC.
And as per the model PSC in 2019, the gas price for deep sea blocks was set at around $7.26 per MMBtu, or million British thermal unit, up by 11.69 per cent from the previous contract for the deep sea blocks.
The offshore gas price was set to increase every year by 1.5 per cent from the date of first gas production, according to the model PSC.
Bangladesh currently has a total of 31 open blocks on offer in the next bidding round. Of them, nine blocks are located in onshore areas, 14 in deep sea, eight in shallow sea areas.
The country's natural gas output is hovering around 3,138 million cubic feet per day (mmcfd), of which 600 mmcfd is re-gasified imported LNG, according to Petrobangla statistics as on September 1.
The entire local production comes from onshore gas fields.
Currently, five IOCs have active PSCs either individually or under a joint venture to explore three shallow-water blocks for offshore exploration.
ONGC Videsh Ltd and Oil India Ltd (OIL) are jointly exploring shallow-water blocks SS-04 and SS-09.
The Australian Santos and Kris Energy joint venture is exploring shallow-water block SS-11.
The country has not offered any onshore oil and gas blocks since 1997.
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