Settling past gas deals with promptness and wisdom
Wednesday, 29 April 2009
THE international oil companies selected for exploring gas in nine offshore blocks through an international bidding in February 2008 are now pressing the government to know about the fate of the lease contracts they were committed to be awarded by the then caretaker government in office. Of the 28 offshore blocks in the Bay of Bengal, the tender, to recall here, was invited for leasing out nine gas blocks. The successful companies out of the seven international bidders were the US-based oil company ConocoPhilips and Irish company Tullow. As committed by the government of that time, the signing of the lease contracts were to be done by October 2008. However, that has not happened so far, though meanwhile six months have passed after the October 2008 deadline to sign the contracts.
The caretaker government that called the tender left office after December 29 general election keeping the issue of fulfilling their commitment on the gas block lease to the successful parties open. On the other hand, it passed the buck to the elected political government, which is obviously not in the know of the entire deal. Since the deal is international in nature, the incumbent government also would not be able to avoid responsibility about it. The international bidders, ConocoPhilips and Tullow, are learnt to have sent letters to the government seeking to know the government's latest position on the issue. Whatever the decision the government may take, it will have to be very careful about it. For these deals involve international interests and the government's response in this regard will be keenly watched and assessed by the quarters concerned.
It would be worthwhile in this connection to recall that hardly about two moths back, some international oil companies had abandoned their exploration rights over four gas blocks on the ground that initial results based on seismic surveys produced negative results. Experts were of the view that the government's indecisiveness and the row over gas price did also play their part in prompting those IOCs' to relinquish their exploration rights in a hurry. Apart from this, the number of companies that took part in the last year's bidding for the offshore blocks, were also few. This is indicative of the IOCs' diminishing interest in the future exploration of oil and gas in Bangladesh.
Bangladesh's disputes with the neighbouring countries, such as Myanmar and India, over its territorial rights in the Bay discouraged the IOCs to take part in the bid, a specialist on the subject opined. Under the circumstances, the present government's decision on the yet unresolved issue of awarding the lease contracts to the selected companies against the February 2008 international bidding may turn out to be a vital cue to other IOCs and their future behaviour towards gas drilling in Bangladesh.
While considering the case of the gas block bidders in question, the government will have too keep in mind that the issue of gas is a life and death question for Bangladesh. A serious doubt has already been raised about the real situation centring the gas reserves in the country. The gas fields now in operation will be exhausted within a decade. The lone operating offshore gas block at Sangu has started to show signs of declining yields thereby throwing the power production and the fate of a large number of newly set up industries in Chittagong into great jeopardy. Against this backdrop, there is no time to wait for completing the exploration activities in the offshore gas blocks, which hold our last hope.
The caretaker government that called the tender left office after December 29 general election keeping the issue of fulfilling their commitment on the gas block lease to the successful parties open. On the other hand, it passed the buck to the elected political government, which is obviously not in the know of the entire deal. Since the deal is international in nature, the incumbent government also would not be able to avoid responsibility about it. The international bidders, ConocoPhilips and Tullow, are learnt to have sent letters to the government seeking to know the government's latest position on the issue. Whatever the decision the government may take, it will have to be very careful about it. For these deals involve international interests and the government's response in this regard will be keenly watched and assessed by the quarters concerned.
It would be worthwhile in this connection to recall that hardly about two moths back, some international oil companies had abandoned their exploration rights over four gas blocks on the ground that initial results based on seismic surveys produced negative results. Experts were of the view that the government's indecisiveness and the row over gas price did also play their part in prompting those IOCs' to relinquish their exploration rights in a hurry. Apart from this, the number of companies that took part in the last year's bidding for the offshore blocks, were also few. This is indicative of the IOCs' diminishing interest in the future exploration of oil and gas in Bangladesh.
Bangladesh's disputes with the neighbouring countries, such as Myanmar and India, over its territorial rights in the Bay discouraged the IOCs to take part in the bid, a specialist on the subject opined. Under the circumstances, the present government's decision on the yet unresolved issue of awarding the lease contracts to the selected companies against the February 2008 international bidding may turn out to be a vital cue to other IOCs and their future behaviour towards gas drilling in Bangladesh.
While considering the case of the gas block bidders in question, the government will have too keep in mind that the issue of gas is a life and death question for Bangladesh. A serious doubt has already been raised about the real situation centring the gas reserves in the country. The gas fields now in operation will be exhausted within a decade. The lone operating offshore gas block at Sangu has started to show signs of declining yields thereby throwing the power production and the fate of a large number of newly set up industries in Chittagong into great jeopardy. Against this backdrop, there is no time to wait for completing the exploration activities in the offshore gas blocks, which hold our last hope.