Petrobangla, the state owned oil and gas corporation, is set to award US-based ConocoPhillips and Norway-based Statoil ASA the task of exploring oil and gas in three deep-sea blocks in the Bay of Bengal, known as offshore blocks 12, 16 and 21 soon.
Prime Minister Sheikh Hasina, the Minister for the Power, Energy and Mineral Resources, has approved the draft Production Sharing Contract (PSC) in this connection in the last week of January. However, following the approval, the Energy Ministry has referred it to the Petrobangla for taking necessary steps.
"Yes, we are set to sign the PSC with the ConocoPhillips and Statoil to explore our Bay soon," State Minister Nasrul Hamid told this correspondent on Monday.
According to him the matter would be placed to the Cabinet Committee on Government Purchase (CCGP) soon. Petrobangla will purchase gas (if found) from these blocks at a rate of $US 6.5 per unit.
According to Petrobangla, ConocoPhillips and Statoil would spend $109m on the exploratory well and other work in each block and deposit the amount as bank guarantee as per the bidding proposal.
During the bidding round in 2012 Conoco was selected as a right bidder to explore these blocks but it had laid out conditions for Petrobangla to increase gas price and allow them to explore Block 7. It also wanted to pull out from Bangladesh. However, finally it has showed interest in doing business in Bangladesh.
ConocoPhillips and Statoil recently submitted a joint bid to explore oil and gas in these blocks near the Myanmar territory of the Bay.
"But the company is yet to sign any joint venture agreement with BAPEX, the state owned oil exploration company which is a mandatory job to sign a JVA with BAPEX," an Energy Ministry official said.
Earlier, the government decided that it would not award any company more than one block. But now it retreats from its earlier position as it is considering the price and timing issues to go for a fresh bidding round.
According to the Energy Ministry sources, Conoco-Statoil joint venture wants deep sea blocks 12 and 21 leaving out block 16. Later the joint venture company on January 12, 2014 submitted bids for hydrocarbon exploration in deep sea blocks 12, 16 and 21 under Model Production Sharing Contract 2012.
According to the PSC, the two companies will conduct mandatory 2D seismic surveys on 1,412 line-kilometre area of block 12; 775line-km of block 16; and 1,376line-km of block 21 in three years. In the next two years, they will conduct 2,000line-km of 2D or equivalent 3D seismic surveys and drill an exploratory well each in the three blocks. After the initial five-year period, the two companies will drill another exploratory well in each block.