2 contracts to be finalised with ConocoPhillips, ONGC Videsh in December.
Bangladesh will sign two contracts with two international oil companies (IOCs) in December for exploring hydrocarbons in the Bay of Bengal. “We have completed all necessary tasks by this time for signing the contracts, including the signing of the initial agreements, vetting from the law ministry, approval from the Cabinet, and final approval from Prime Minister Sheikh Hasina, who is the line minister of the energy ministry,” Petrobangla chairman Dr Hossain Monsur told The Independent.
He said Petrobangla is set to sign a production sharing contract (PSC) with US energy giant ConocoPhillips between 2 and 5 December, and it will sign another PSC with Indian oil giant ONGC Videsh Ltd by the end of December. “There is no harm in signing the contracts as we had completed all procedures a couple of months ago. It is a mere formality, nothing more than that,” energy adviser to the Prime Minister, Dr. Tawfiq-e-Elahi Chowdhury, disclosed. He added, “We know that the government cannot sign any contract during the time of polls. However, the Cabinet body approved the proposal last July and we signed the initials with ConocoPhillips and ONGC last September, so there is no harm in awarding them now.”
The PSC department of Petrobangla has already contacted ConocoPhillips for the final signing ceremony. “We told them over telephone to get ready to reach here between December 2 and 5 for the final signing, and their Singapore office agreed,” a senior official said.
The two companies will deposit bank guarantees of the same amounts they had proposed in the bidding, he added.
etrobangla has completed the remapping of offshore blocks and prepared the draft model PSC for the offshore bidding round 2012 by creating three blocks in the deep sea in the eastern part and identified nine blocks in shallow water, which are situated in undisputed areas, in accordance with the verdict of the International Tribunal for the Law of the Sea (ITLOS).
Earlier, Petrobangla selected Indian oil giant ONGC Videsh Ltd and the US-based ConocoPhillips Asia Pacific New Venture to explore respectively SS-04 and SS-09, and SS-07 blocks of shallow water in the bay.
In the new PSC, there is no scope for exporting oil and gas, but gas can be sold to a third party inside Bangladesh.
According to the offer, ONGC Videsh Ltd will spend USD 58 million at block SS04 (over an area of some 7,271 sq. km.) to conduct a two-dimensional seismic survey of 1,200 ‘line kilometres’ and one well in the initial mandatory work programme of five years for exploration. Subsequently, it will conduct 500 line kilometres and 200 sq. km. 3D seismic survey and drill one well. It will spend USD 85 million for conducting a three-dimensional seismic survey at block SS09 (about 7,022 km.) of 300 sq. km. and for drilling two exploration wells in the first extension period of two years, and four exploration wells in the second extension of two years.
ConocoPhillips offered to conduct a two-dimensional seismic survey at block SS07 (about 5,776 sq. km.) of 1,347 ‘line kilometres’ and drill one well in the initial mandatory work programme of five years for exploration; it will subsequently conduct 1,000 line kilometres and a 500 sq. km. line survey.Bangladesh has four PSCs with the IOCs: three for onshore and one offshore.
Petrobangla, the state-owned oil and gas company, sent invitation letters to Santos and Krisenergy to explore oil and gas in block 11 in the shallow waters of the bay. “Now we are all set to sign the initials as we have completed all procedural tasks. We have sent fax messages to the IOCs in this regard and hopefully we will be able to sign the initials with the companies soon,” Petrobangla chairman Dr. Hossain Monsur told The Independent.
-With The Independent input
