Signing of MoU with US oil giant this week

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M Azizur Rahman
The government is set to sign a memorandum of understanding (MoU) with the US oil giant ConocoPhillips to undertake seismic surveys in the prospective deep water offshore blocks, officials said Tuesday.
State-owned Petrobangla is now holding talks with ConocoPhillips to finalise the draft of the MoU, said a senior Petrobangla official.
The energy ministry expects that the MoU would be signed within this week on completion of the ongoing negotiation with the US firm.
The renewed negotiation with the ConocoPhillips started Tuesday to reach consensus over signing of the MoU and subsequently the production sharing contract (PSC).
Petrobangla and the energy ministry officials would continue discussions with the ConocoPhillips this week before signing the MoU.
Under the MoU to be signed between the Petrobangla and ConocoPhillips, the US oil giant will conduct seismic surveys and search out gas presence in the prospective offshore gas blocks in the Bay of Bengal.
The much-expected PSC might be signed after resolving several issues including the overlapping dispute of gas blocks with the neighbours, said a senior energy ministry official.
During the negotiation the government will also try to resolve a number of issues including ConocoPhillips' demand for relaxation of a compensation provision regarding gas-field blowout and continuation of contract obligation.
The issue concerning the US firm's demand to ensure its right over all the eight offshore gas blocks for which the company became the lowest bidder, would also be discussed.
ConocoPhillips was selected for only two deep water gas blocks -- DS-08-10 and DS-08-11 in 2008 offshore bidding - although it became the lowest bidder for eight offshore blocks.
The cabinet committee on economic affairs decided to offer two blocks to the ConocoPhillips.
Another foreign firm Irish Tullow Oil was also selected for shallow block SS-08-05 in the bidding.