Cabinet body approves fresh PSC signing with ConocoPhillips
Tuesday, 24 May 2011
FE Report
The cabinet committee on economic affairs Monday approved afresh the signing of production sharing contract (PSC) with the US-based oil giant ConocoPhillips to initiate exploration in reduced areas of two deep water offshore blocks in the Bay of Bengal. "ConocoPhillips has been awarded two blocks - DS-08-10 and DS-08-11 - to initiate oil and gas exploration," Finance Minister A M A Muhith told newsmen after the meeting. But the US firm will not be able to conduct exploration in the entire block, as neighbouring India and Myanmar have opposed awarding the disputed area for exploration. Initially the company will conduct exploration in 70 per cent areas of block DS-08-10 and 85 per cent areas of DS-08-11. Once the maritime boundary dispute is over, the ConocoPhillips will be able to conduct exploration in the remaining areas of the blocks, depending on the solution of the dispute, the meeting decided. The state-owned Petrobangla will also sign a side letter agreement with ConocoPhillips to ensure that the US firm will have the rights for conducting exploration in entire areas of both the two blocks, once the dispute with the neighbouring countries is over. "This is indeed a good news for the country's energy sector," Petrobangla Chairman Dr Hussain Monsur told the FE Monday. He hoped that the PSC with ConocoPhillips will be signed shortly. "Exploration by the US firm in the Bay of Bengal will help us ascertain the gas reserve potentials in the Bay of Bengal," the Petrobangla chairman said. ConocoPhillips won exploration rights for the two offshore gas blocks in February 2008, although it was primarily selected for eight offshore blocks. During the 2008 bidding, another international firm - Tullow - also won a shallow-depth block. The same cabinet committee in a meeting in July 2009 had decided that ConocoPhillips would be awarded only two offshore blocks, and Tullow the SS-08-05 block due to maritime boundary dispute with the neighbouring countries. However, India and Myanmar protested awarding those blocks, saying that all the three blocks were situated in disputed areas. Recently, the energy ministry has decided that ConocoPhillips will be offered reduced areas for exploration, following almost two years of meetings and negotiations with the neighbouring countries as well as with ConocoPhillips and Tullow. The ministry also decided that Tullow will not get the block SS-08-05, as its major areas still remain in disputed zone.
The cabinet committee on economic affairs Monday approved afresh the signing of production sharing contract (PSC) with the US-based oil giant ConocoPhillips to initiate exploration in reduced areas of two deep water offshore blocks in the Bay of Bengal. "ConocoPhillips has been awarded two blocks - DS-08-10 and DS-08-11 - to initiate oil and gas exploration," Finance Minister A M A Muhith told newsmen after the meeting. But the US firm will not be able to conduct exploration in the entire block, as neighbouring India and Myanmar have opposed awarding the disputed area for exploration. Initially the company will conduct exploration in 70 per cent areas of block DS-08-10 and 85 per cent areas of DS-08-11. Once the maritime boundary dispute is over, the ConocoPhillips will be able to conduct exploration in the remaining areas of the blocks, depending on the solution of the dispute, the meeting decided. The state-owned Petrobangla will also sign a side letter agreement with ConocoPhillips to ensure that the US firm will have the rights for conducting exploration in entire areas of both the two blocks, once the dispute with the neighbouring countries is over. "This is indeed a good news for the country's energy sector," Petrobangla Chairman Dr Hussain Monsur told the FE Monday. He hoped that the PSC with ConocoPhillips will be signed shortly. "Exploration by the US firm in the Bay of Bengal will help us ascertain the gas reserve potentials in the Bay of Bengal," the Petrobangla chairman said. ConocoPhillips won exploration rights for the two offshore gas blocks in February 2008, although it was primarily selected for eight offshore blocks. During the 2008 bidding, another international firm - Tullow - also won a shallow-depth block. The same cabinet committee in a meeting in July 2009 had decided that ConocoPhillips would be awarded only two offshore blocks, and Tullow the SS-08-05 block due to maritime boundary dispute with the neighbouring countries. However, India and Myanmar protested awarding those blocks, saying that all the three blocks were situated in disputed areas. Recently, the energy ministry has decided that ConocoPhillips will be offered reduced areas for exploration, following almost two years of meetings and negotiations with the neighbouring countries as well as with ConocoPhillips and Tullow. The ministry also decided that Tullow will not get the block SS-08-05, as its major areas still remain in disputed zone.