Conoco-Statoil JV yet to decide on signing PSC

The ConocoPhillips (US) and Statoil (Norway) joint venture (JV) has not yet decided whether it would ink production sharing contract (PSC) or back out.
The cabinet committee on economic affairs approved awarding of all the three deepwater blocks in the Bay of Bengal, a company insider said.
The JV is yet to take any decision as to whether it would stick to its demand of executing 2.0 per cent annual hike in natural gas prices earlier than first gas production or ink the PSC straight way, he added.
The US-Norwegian JV was seeking early execution of the PSC provision of annual 2.0 per cent hike in natural gas price.
As per the model PSC, it was to take effect from first production. In an e-mail response to the FE, Managing Director of ConocoPhillips (Bangladesh) operations Tom Early Monday said, "Any discussion relating to the PSC will be conducted with the Ministry [Energy] and Petrobangla directly."
He did not respond to the FE query whether the JV would stick to its recent demand of 2.0 per cent annual hike of natural gas price earlier than the first gas production or ink the PSC without further bargaining.
The cabinet committee on economic affairs Wednesday last approved awarding of all three deep water blocks to the JV for oil and gas exploration in the Bay of Bengal.
The approval came 26 months after the initial bidding for the three deep water blocks-DS-12, DS-16 and DS-21 and 17 months after re-launch of the bidding after revising the fiscal terms.
The Energy and Mineral Resources Division (EMRD) of the Ministry of Power, Energy and Mineral Resources (MPEMR), however, is yet to decide on the JV's new proposal for amending the PSC.
The Petrobangla had invited bids initially in December 2012 from the international oil companies for a total of 12 offshore blocks including these three deepwater blocks and nine in shallow water.
It later had suspended bidding procedure for these deepwater blocks and re-launched the bidding for them again in October 2013 after revising upward the fiscal terms and other benefits, he said.  
The ConocoPhillips-Statoil duo jointly submitted bids for all the three deepwater blocks and emerged as the single bidder for all the three blocks offered under that bidding round.
The JV in early January sought the provision of hiking natural gas tariff earlier than the first production.
"We have proposed that escalation of the gas price begin earlier than the first production, which is similar to what is in place in neighbouring countries like Myanmar and Thailand," Mr Early had told the FE in January.
Regarding the new offer, a senior Petrobangla official said, ConocoPhillips-Statoil JV was in talks with the Bangladesh government and state-owned Petrobangla after being found fit technically by the evaluation committee for award of three new deepwater blocks-DS-12, DS-16 and DS-21.
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