The government is working on launch of a new bidding round to lure international oil companies (IOCs) into oil and gas exploration in both onshore and offshore blocks.
Discovery of new hydrocarbon reserves will be the key focus of the new bidding round as the country will start importing expensive LNG (liquefied natural gas) late next month to meet the mounting energy demand.
The find of any fresh hydrocarbon reserve will help reduce dependence on import of the expensive LNG.
"Petrobangla has started working on preparing a draft of a production sharing contract (PSC) to lure international oil companies (IOCs) into carrying out oil and gas exploration in both onshore and offshore blocks," Petrobangla chairman Abul Mansur Md Faizullah told the FE.
The state-run oil company has planned to accommodate recommendations from international consultants while drafting the PSC as the country's previous several bidding rounds saw lukewarm response from the IOCs.
Many IOCs did not take part in the offshore bidding rounds in 2008, 2012 and 2016 only due to 'inadequate' fiscal terms, said a senior Petrobangla official requesting for anonymity.
Only few IOCs, that took part in the bidding and subsequently inked PSCs in 2008 and 2012 discontinued exploration later and exited the blocks.
Only one IOC submitted finally the request for proposal (RfP) under the 2016 bidding round and inked PSC only for one block out of three that were up for grabs.
The US-based oil and gas giant ConocoPhillips shut operations and left exploration rights to two separate deepwater blocks -- DS-08-10 and DS-08 -11 -- on December 15, 2014 after carrying out 2D seismic surveys due to 'poor' fiscal terms.
The same firm in April, 2013 also backed out from signing a deal on the shallow-water block SS-07 as the fiscal terms were deemed not supportive for it.
The US firm was awarded the shallow water block in the 2012 bidding round.
The country had not offered any onshore oil and gas blocks since 1997.
These were big setbacks for the country's future energy security as Petrobangla was failing once and again to attract IOCs to carry out hydrocarbon exploration in offshore blocks, said Professor M Tamim of Bangladesh University of Engineering and Technology (BUET).
The government should open up the blocks both onshore and offshore for exploration by IOCs under PSCs, he said.
The country is currently dependent on onshore fields for its entire natural gas output.
Gas production at present is around 2,700 million cubic feet per day (mmcfd) against the demand for over 3,200 mmcfd.
Short supply of natural gas has pushed the government to ration natural gas supplies to industries, power plants and fertiliser factories for around a decade.
