2 more PSCs with IOCs to be signed

FE Report | Published: March 02, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

The government is set to ink two more production sharing contracts (PSCs) with the already selected international oil companies (IOCs) this month for oil and gas exploration in shallow water in the Bay of Bengal.
Of the two blocks, US's ConocoPhillips will be awarded shallow water block SS-07, while the joint venture of Australian Santos and Singapore's KrisEnergy will get block SS-11.
ConocoPhillips has committed to spend $40 million including the bank guarantee of the same amount.
The US firm has agreed to conduct at least 2,347 km-long 2D seismic survey, 500 sq km 3D and drill one well during the contract period.
ConocoPhillips submitted bids for one shallow water blocks out of nine which were offered by Bangladesh in the latest bidding in December 2012.
The new shallow water block will, however, be third offshore gas block of ConocoPhillips in Bangladesh as it was already awarded two deep water blocks, DS-08-10 and DS-08-11, in 2008 bidding.
ConocoPhillips has already started exploration in its two deep water blocks.
The bid of the Santos-KrisEnergy JV was the lone bid that Petrobangla received in its second attempt to attract IOCs to hydrocarbon exploration in shallow water in the Bay of Bengal.
The JV of Santos-KrisEnergy submitted bid on close of bid submission deadline on July 29, 2013 when a total of six shallow sea blocks were offered.
The block SS-11 is located southeast from Bangladesh shore and close to Myanmar's sea territory.
The JV of Santos and KrisEnergy has committed to dig an exploration well, conduct 1,876 kilometre-long 2D seismic survey, 300 sq km 3D survey and offered a bank guarantee of US$15 million for the initial five years of exploration.
The JV would require around US$ 30-32 million investment to carry out its work plan during the initial five years.
The state-owned Bangladesh Petroleum Exploration and Production Ltd (Bapex) will have a 10 per cent interest stake in both these blocks.
The duration of contract for exploration will be eight years with a five-year initial exploration and a three-year subsequent exploration period.
The contractors will be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field.
The government on February 17 inked two PSCs with India's ONGC Videsh Ltd (OVL)for shallow water blocks SS-04 and SS-09.
The OVL along with Oil India Limited (OIL), formed a consortium having equal stakes (50:50) for oil and gas exploration in two shallow water blocks.
Currently, Bangladesh is dependent on onshore gas fields alone as the entire natural gas output of around 2,310 million cubic feet per day (mmcfd) of the country comes from onshore gas fields.
The country's offshore natural gas output came to 'zero' from October 2012, after around 14 years of production, when Santos-operated Sangu-11 gas well in the Bay of Bengal was shut.