The government is set to ink four production- sharing contracts (PSCs) with the already selected international oil companies (IOCs) by February next for oil and gas exploration in shallow water blocks in the Bay of Bengal, a top official said.
State-owned Petrobangla is now completing procedures for signing the deals by next month, Petrobangla Chairman Dr Hussain Monsur told the FE Saturday.
He hoped that the IOCs would start exploration immediately after signing of the PSCs.
Petrobangla initially had planned to ink three of the four PSCs for shallow water blocks by September 2013.
But political uncertainty, coupled with general strikes and blockades, forced the IOCs to refrain from signing the PSCs then, said sources.
Petrobangla has now moved to award four offshore blocks to two IOCs and one joint venture (JV) firm of the IOCs for initiating hydrocarbon exploration in the untapped areas of the Bay, the Petrobangla top brass said.
Petrobangla has already inked drafts of PSCs with India's ONGC Videsh Ltd and US-based ConocoPhillips for three shallow water blocks.
The ONGC Videsh will be awarded two shallow water blocks-SS-04 and SS-09 while ConocoPhillips the shallow water block SS07.
The JV of Santos-KrisEnergy will be awarded shallow water block SS-07.
Under the PSCs, the ONGC Videsh will also enjoy rights to explore Bangladesh's first discovered offshore gas field at Kutubdia.
Kutubdia was offered under a 'special package' and was tagged with SS-04 during the bidding round.
The ONGC Videsh has committed to spend $58 million for block SS-04 and to carry out 2,700 line km 2D seismic survey, 200 sq km 3D and drill two wells within the contract period. For block SS-09, the ONGC has committed to spend $85 million and conduct at least 2,850 line km 2D seismic survey, 300 sq km 3D and drill three wells during the contract period.
The 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 line km 2D seismic survey, 500 sq km 3D and drill one well during the contract period.
The ONGC Videsh and the ConocoPhillips submitted bids for three shallow-water blocks out of nine which were offered by Bangladesh in the latest bidding in December 2012.
With the signing of PSCs, the Indian company will enter into Bangladesh's oil and gas exploration activities.
The new shallow water block will, however, be third offshore gas block of the ConocoPhillips in Bangladesh as it was awarded two deep water blocks DS-08-10 and DS-08-11 in the country's previous 2008 bidding.
The ConocoPhillips has already started exploration in its two deep water blocks.
The bid of the Santos-KrisEnergy JV was the lone bid that the 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 towards the expiry of bid submission deadline on July 29 for block SS-11 out of the total six shallow sea blocks 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 line kilometre 2D seismic survey, 300 sq km 3D survey and offered a bank guarantee of US$15 million for the initial five years of exploration.
The JV would require investment around US$ 30-32 million to carry out its work plan during the initial five years.
State-owned Bangladesh Petroleum Exploration and Production Ltd (Bapex) will have a 10 per cent interest stake in all the four 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.
