Bidding for shallow-depthoffshore blocks soon

M Azizur RahmanThe government has decided to launch bidding for oil and gas exploration in the country's shallow-depth blocks, avoiding areas that have been disputed by neighbouring India and Myanmar, officials said Monday. "The new bidding round will take place soon to ensure that exploration work at the planned offshore gas-blocks can start at the earliest," said a senior energy ministry official. He said almost all the shallow-depth offshore gas blocks will be put on offer for the international oil companies (IOCs). However, a few blocks will be kept as 'ring-fenced' for future exploration by the state-owned Bangla­desh Petroleum Exploration company (BAPEX). The energy ministry decided on the bidding round Sunday. It subsequently asked the Petrobangla to finalise necessary documents, including a model production sharing contract (MPSC), for the planned offshore bidding round. The government had launched the previous bidding round in February 2008 for both the shallow and deep water gas-blocks. Eight of these blocks were located in shallow-depth water and 20 in deep water. But the country got lukewarm responses from the IOCs, mainly due to opposition from neighbouring India and Myanmar over maritime boundary disputes. Both the neighbours had requested the IOCs not to take part in the bidding round because of the dispute, said a Petrobangla official. Many IOCs were also out of the bidding round, following a study report of the UK-based consulting firm Wood Mackenzie. According to the report, 12 out of the 28 Bangladeshi gas-blocks offered for the bidding round had been wholly or partly licensed by India and Myanmar. The government, however, finally got bids for 15 gas-blocks from a number of foreign firms including ConocoPhilips of the US, Australian Santos, Chinese CNOOC and Longwoods Resources, Korea National Oil Corporation of South Korea, Tullow Bangladesh and Comtrack Services of the UK. Of the 15 gas-blocks, three were shallow-water blocks and 12 were deep-water blocks. The government could not award even one of the shallow-depth gas-blocks due to overlapping claim by the neighbouring countries. It could, however, award contracts for two deep-water gas-blocks - DS-08-10 and DS-08-11 - in June 2011, three years after launching of the bidding round. US ConocoPhillips was awarded both the deepwater gas-blocks, though the maritime boundary dispute ate up 30 per cent areas from the block DS-08-10 and 15 per cent areas from the block DS-08-11. "This time all the planned shallow-depth offshore gas-blocks will be dispute-free," said a senior Petrobangla official. The government in April 2011 had moved to launch a bidding round for the onshore and offshore gas-blocks. But opposition from different quarters forced the government to hold the plan for leasing out the onshore gas-blocks for now, said the official. Energy experts said despite having significant gas reserve, the absence of necessary drilling and exploration works has resulted in gas supply crunch across the country.