Cabinet body sends back proposal to award offshore gas blocks
Friday, 24 July 2009
FE Report
A key cabinet body Thursday dragged its feet in awarding offshore gas blocks to two foreign companies, saying the leasing process needs further review, an official said.
The cabinet committee on economic affairs found some last minute 'gaps' in the information provided by the energy ministry on the selection of two companies for offshore gas exploration.
State-run energy giant Petrobangla had primarily selected the US oil company ConocoPhillips and Irish firm Tullow for nine offshore blocks under the country's latest offshore bidding launched in February 2008.
ConocoPhillips was picked for eight blocks and Tullow for one, although the energy ministry has recently halved the number of blocks to be leased out and sent the revised proposal to the cabinet committee for final approval.
The cabinet committee led by finance minister AMA Muhith reviewed the ministry's final proposal but found it "lacked adequate data and information," cabinet division spokesman Motiur Rahman told reporters.
"The committee members also observed that the proposal needs further review," he said, adding the energy ministry has been asked to submit the proposal again within the shortest possible time after covering the gaps.
Energy ministry officials have refused to comment on the cabinet committee's feet dragging, but they sounded confident that the offshore blocks would be awarded soon to boost the country's long term energy security.
"We are going to send the proposal again after plugging the information gaps," a top official said, speaking on condition of anonymity.
The offshore bidding was launched by the army-backed caretaker government in the wake of depleting gas reserve in the country. But it left the decision on awarding of the gas blocks to the elected government.
The two international oil companies (IOCs) pledged to invest a total of $492.52 million in exploration if they were awarded the exploration rights in all the nine blocks.
ConocoPhillips offered to invest $442.67 million and offered a bank guarantee of the same amount, while Tullow committed to invest $49.85 million and offered a bank guarantee of $33.9 million.
The cabinet committee also sent back the underground metro-rail project to the communications ministry, finding the proposal lacking necessary data, Rahman said.
"The committee has said that the metro-rail project needs further review," he said.
The communications ministry had sought the cabinet body to invite international tender for the subway project and to finalise the terms and conditions committee to execute the project.
A key cabinet body Thursday dragged its feet in awarding offshore gas blocks to two foreign companies, saying the leasing process needs further review, an official said.
The cabinet committee on economic affairs found some last minute 'gaps' in the information provided by the energy ministry on the selection of two companies for offshore gas exploration.
State-run energy giant Petrobangla had primarily selected the US oil company ConocoPhillips and Irish firm Tullow for nine offshore blocks under the country's latest offshore bidding launched in February 2008.
ConocoPhillips was picked for eight blocks and Tullow for one, although the energy ministry has recently halved the number of blocks to be leased out and sent the revised proposal to the cabinet committee for final approval.
The cabinet committee led by finance minister AMA Muhith reviewed the ministry's final proposal but found it "lacked adequate data and information," cabinet division spokesman Motiur Rahman told reporters.
"The committee members also observed that the proposal needs further review," he said, adding the energy ministry has been asked to submit the proposal again within the shortest possible time after covering the gaps.
Energy ministry officials have refused to comment on the cabinet committee's feet dragging, but they sounded confident that the offshore blocks would be awarded soon to boost the country's long term energy security.
"We are going to send the proposal again after plugging the information gaps," a top official said, speaking on condition of anonymity.
The offshore bidding was launched by the army-backed caretaker government in the wake of depleting gas reserve in the country. But it left the decision on awarding of the gas blocks to the elected government.
The two international oil companies (IOCs) pledged to invest a total of $492.52 million in exploration if they were awarded the exploration rights in all the nine blocks.
ConocoPhillips offered to invest $442.67 million and offered a bank guarantee of the same amount, while Tullow committed to invest $49.85 million and offered a bank guarantee of $33.9 million.
The cabinet committee also sent back the underground metro-rail project to the communications ministry, finding the proposal lacking necessary data, Rahman said.
"The committee has said that the metro-rail project needs further review," he said.
The communications ministry had sought the cabinet body to invite international tender for the subway project and to finalise the terms and conditions committee to execute the project.