The government is going to hire an international consultant for a brush-up of the existing model production-sharing contracts (PSCs) to lure foreign firms into exploration of hydrocarbons in Bangladesh's unexplored blocks, amid gas crunch.
Official sources say the corona-upended global fuel-market ecosystem -- hot and humid for high demand to feed resurgent global economies -- apparently prompts the domestic gas-exploration move.
Energy and mineral resources division under the Ministry of Power, Energy and Mineral Resources (MPEMR) has already directed state-run Petrobangla to initiate the process of appointing a reputed consultant, a senior energy official told the FE Thursday.
He said the consultant might be offered two months time to complete the job of revisiting and suggesting a redraft of the model PSCs to be offered to international oil companies (IOCs) in exploration biddings.
Petrobangla will seek expression of interest (EOIs) from interested potential consultants for the job, said a senior petrobangla official.
The existing model PSC for both onshore and offshore explorations were prepared in 2018 and was approved in 2019. But the global deadly coronavirus pandemic after 2019 changed the global economic ecosystem especially in energy sector where the demand for LNG (liquefied natural gas) kept skyrocketing.
"So the updating of the model PSC is necessary to attract the interested IOCs under the post-COVID scenario," said the energy ministry official to justify the need for its updating.
Officials said the government had a plan to float an international tender to carry out hydrocarbon exploration in offshore fields on September 15, 2020.
An announcement on floating the bidding round was planned to come on March 17, 2020 in celebration of the birth centenary of Bangabandhu Sheikh Mujibur Rahman. The deadline for receiving bids from the IOCs was planned for March 10, 2021. Signing PSCs with the bid-winning IOCs was planned by May 26, 2021. And "Petrobangla was to launch the bidding to offer offshore blocks adjacent to gas-rich blocks of Myanmar", said the Petrobangla official.
Under the existing model PSC 2019, the gas price for deep-sea blocks was set at around $7.26 per MMBtu (million British thermal unit), up 11.69 per cent from the previous MPSC for the deep-sea blocks.
The offshore gas price was set to increase every year by 1.5 per cent from the date of first gas production, according to the model PSC.
Petrobangla had floated the last bidding round nine years back in 2012 through which shallow-water blocks and one deep-water block was awarded to contractors.
But not a single exploratory well has been drilled by the contractors by now.
The country has not offered any onshore oil and gas block since 1997.
Bangladesh currently has a total of 31 open blocks for offer in the next bidding round. Of them, nine are located in onshore areas, 14 in deep-sea waters, eight in shallow-sea waters.
The country's natural gas output is currently hovering around 32,66 million cubic feet per day (mmcfd), of which 921 mmcfd is regasified imported LNG, according to Petrobangla statistics as on September 29, 2021.
The entire local production comes from onshore gas fields, as there has not yet been effective step for exploring gas in the extended economic area of the Bay of Bengal won through international arbitration.
Currently, four IOCs have active PSCs either individually or under a joint venture in three shallow-water blocks for offshore exploration of hydrocarbons. ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are jointly scouring for gas and oil in shallow-water blocks SS-04 and SS-09.
America's Chevron is active in exploring and producing natural gas in three onshore gas fields under onshore blocks 12, 13 and 14.
Singapore's KrisEnergy is producing natural gas from Bangora gas field.
