Bangladesh is set to formally launch its long-awaited offshore bidding round today (Sunday), offering 26 hydrocarbon-exploration blocks to international oil companies (IOCs) under significantly improved contractual terms.
The move marks one of the government's most ambitious efforts in recent years to attract foreign investment into the country's energy sector amid growing concerns over long-term energy security.
The fresh bid round comes as Bangladesh seeks to reduce its vulnerability to global fuel market disruptions caused by the prolonged Middle East crisis and restrictions on vessel movements through the Strait of Hormuz.
Officials say the revised production-sharing framework includes major incentives aimed at reviving international interest after previous offshore tenders failed to secure participation from global energy firms.
The Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources is expected to announce the bid round at a press briefing at the Bangladesh Secretariat, a senior EMRD official told the FE on Saturday.
Eleven of the offshore blocks to be on offer are located in shallow waters and 15 in deep sea areas, he said.
The shallow-sea blocks on offer are SS-01, SS-02, SS-03, SS-04, SS-05, SS-06, SS-07, SS-08, SS-09, SS-10 and SS-11.
The deep-sea blocks on offer are DS-08, DS-09, DS-10, DS-11, DS-12, DS-13, DS-14, DS-15, DS-16, DS-17, DS-18, DS-19, DS-20, DS-21 and DS-22.
Global oil and gas majors including ExxonMobil, Chevron, Shell and BP have already made inquiries about the forthcoming bid round, the official added.
The cabinet committee on economic affairs has already approved the "Bangladesh Offshore Model PSC 2026", paving the way for state-run Petrobangla to announce the 2026 bidding round.
The deadline for bid submissions has been fixed for November 30, 2026.
The newly elected BNP-led government has moved quickly to launch the bid round and strengthen the country's future energy security by identifying new hydrocarbon reserves against the backdrop of the persistent Middle East crisis and restrictions on vessels passing through the Strait of Hormuz.
Petrobangla has further sweetened the draft production-sharing contract (PSC) to attract IOCs in the forthcoming bidding round, a senior Petrobangla official said.
He said the mandatory contribution to the workers' profit participation fund (WPPF) had been reduced to 1.5 per cent from the previous 5.0 per cent.
Besides, a decision has been taken to ease obligations relating to the construction of hydrocarbon pipelines following discoveries and subsequent operations, he added.
Full repatriation of profits, no signature bonus or royalty, and attractive wellhead gas prices linked to international benchmark Brent crude - with floor and ceiling prices determined on the basis of the lowest and highest average Brent prices over the previous five years - are among the key contract features.
Contractors will also be entitled to mutually agreed pipeline tariffs, to be paid by the buyer, to support pipeline investments for both shallow and deep-sea blocks.
The contracts also include exemptions from duties on equipment and machinery imported for petroleum operations during exploration and production phases, while contractors' corporate income tax liabilities will be borne by Petrobangla.
Sources said not a single IOC participated in the latest offshore bidding round launched under the previous Awami League government, although several companies had purchased bid documents.
Market insiders said lack of confidence among IOCs, coupled with inadequate data on offshore blocks, contributed to the poor response.
Petrobangla had kept the offer open for nine months after floating the international tender on March 10, 2024.
At that time, 24 offshore blocks - 15 deep-sea and nine shallow-water blocks - were offered for exploration leases.
Before the latest bid round, Bangladesh had launched only one offshore bidding round over the past decade, in 2017, and that was limited to three deep-water blocks, according to Petrobangla.
Although Posco-Daewoo was awarded deep-water block DS-12 following the bidding, the company withdrew from the block in 2020 after conducting a 2D seismic survey.
Previously, Petrobangla floated another bidding round in 2012, through which three shallow-water blocks and one deep-water block were awarded to contractors.
Currently, four IOCs hold active PSCs, either individually or through joint ventures, for exploration in three shallow-water blocks in Bangladesh.
US oil major Chevron is actively exploring and producing natural gas in three gas fields under onshore blocks 12, 13 and 14. Singapore-based KrisEnergy is producing natural gas from the Bangura field under Block 9. ONGC Videsh and Oil India are jointly exploring shallow-water blocks SS-04 and SS-09.
Azizjst@yahoo.com
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