Two IOCs may be given go-ahead for offshore exploration in Bay today

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FHM Humayan Kabir
The highest public procurement body -- government purchase committee -- is likely to allow two international oil companies (IOCs) today (Tuesday) to explore prospective huge untapped oil and gas in the Bay, an official said Monday.
Under the Offshore Bidding Round 2008, Bangladesh oil, gas and mineral corporation -Petrobangla - has already selected US petroleum exploration giant ConocoPhilips and Irish oil company Tullow and sent the proposal to the purchase committee for approval.
A meeting of the purchase committee will be held today (Tuesday), where it could approve the Petrobangla's proposal of signing production sharing contracts (PSC) with the two IOCs for working in nine gas blocks in the Bay, an official of the energy division said.
"If the proposals for signing the PSC are approved, we will sign the final deals with the selected companies by the next month (October) aiming at starting exploration activities in the next dry (winter) season," said Chairman of the Petrobangla Jalal Ahmed Monday.
"The selected IOCs will go for extraction of oil and gas, if found, from the offshore blocks from the year 2016. It will help the country ensure its energy security for the next decade," he said.
Following the soaring demand of natural gas and its prevailing crisis in the country, the Petrobangla floated tenders in February seeking proposals from the IOCs for exploring oil and gas in the Bay of Bengal within the country's territorial waters.
The energy ministry said Bangladesh, with about 13.50 trillion cubic feet of proven and recoverable gas reserves, now has a daily shortfall of about 200 million cubic feet of gas against its daily demand for 2000mmcfd, keeping hundreds of factories and households in the waiting line.
It said the existing reserve will be depleted by 2015 if the country does not have any new discovery of gas reserve.
Bangladesh had earlier had two rounds of international bidding - one in 1993 and 1997-- for the hunt of gas and oil in the country. But mainly the onshore blocks were auctioned off to the companies during the two biddings.
Under the Offshore Bidding Round 2008, a total of seven IOCs submitted tenders for 15 offshore gas blocks expressing their interest to explore hydrocarbon investing millions of dollar.
Out of them, five were disqualified due to their failure in complying with necessary requirements sought by the Petrobangla.
Before inviting tenders, the Petrobangla demarcated 28 prospective gas blocks in the shallow and deep waters of the Bay of Bengal.
The ConocoPhilips has been selected for exploring hydrocarbon in the blocks 10, 11, 12, 15, 16, 17, 20 and 21 in the deep sea. Four production sharing contracts (PSCs), each for two blocks, will be signed between the company and the Petrobangla.
On the other hand, Tullow has been selected for block 5 in the shallow water of the Bay. One PSC will be signed with the Petrobangla for exploring gas in the prospective block.
The disqualified five companies in the bidding process are Australian giant Santos International, Chinese CNOOC and Longwoods Resources Ltd, Korean National Oil Corporation of South Korea and the United Kingdom's Comtrack Services Ltd.
As per model PSC, the selected companies will get nine years from the work orders to explore hydrocarbon at their respective block in the offshore areas in the Bay.