Wednesday, February 21, 2024

Petrobangla set to award 3 shallow gas blocks to oil cos by end-June

Petrobangla, the state-owned oil and gas company, is set to award three shallow natural gas blocks to international oil companies (IOCs) for exploring hydrocarbons in the Bay of Bengal by the end of June. The energy ministry completed all the necessary tasks in this connection on Monday and sent the file to the Prime Minister’s Office (PMO) to receive the final nod from the Prime Minister, who is also the energy minister.
“We completed the whole process to award the three blocks to the selected IOCs by June and, hopefully, they (the IOCs) can start drilling by 2014,” Petrobangla chairman Dr. Hossain Monsur told The Independent.
“We have verbally told the IOCs to be ready to sign the final contract by June and asked the PSC (Production Sharing Contract) division to send them a letter in this regard,” he added.
Petrobangla selected Indian oil giant ONGC Videsh Ltd and the US-based ConocoPhillips Asia Pacific New Venture to explore the bay since these two companies submitted bid documents expressing their willingness to respectively explore SS-04 and SS-09, and SS-07, blocks of shallow water in the bay.
“The government has formed a 10-member evaluation committee comprising officials from the energy ministry and Petrobangla. It evaluated the bids on the marking system that was dependent on the ‘work programme’ of the IOCs along with their offers for spending and the bid-bond amount,” the Petrobangla chairman said.
According to the offer, ONGC Videsh Ltd will spend USD 58 million at block SS-04 (over an area of about 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 of exploration.
Subsequently, it will conduct 500 line kilometres and a 200-sq.-km. 3D seismic survey and one well. It will spend USD 85 million for conducting a three-dimensional seismic survey at block SS-09 (about 7,022 km.) of an area 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 period of two years.
ConocoPhillips offered to conduct a two-dimensional seismic survey at block SS-07 (about 5,776 sq. km.) of 1,347 ‘line kilometres’ and one well in the initial mandatory work programme of five years for exploration; subsequently it will conduct 1,000 line kilometres and a 500-sq.-km. line survey.
In accordance with the verdict of the International Tribunal for the Law of the Sea (ITLOS), Petrobangla has completed the re-mapping 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 that are situated in undisputed areas.
Bangladesh has four PSCs with the IOCs: three onshore and one offshore.
The model PSC does not have the provision of gas exports. The model PSC is different from the existing PSC. However, the energy ministry is set to amend some clauses of the PSC to make it profitable for the IOCs.
Petrobangla will purchase gas from the IOCs at a rate of USD 3.5 per thousand cubic feet.
Under the terms of the new model contract, Petrobangla’s share of profits in natural gas production from shallow-sea blocks will be no less than 55 per cent if the output is up to 75 mmcfd, no less than 60 per cent if it is 75-150 mmcfd, no less than 65 per cent if 150-250 mmcfd, no less than 70 per cent if 250-400 mmcfd, no less than 75 per cent if it is 400-600 mmcfd and no less than 80 per cent if the output is above 600 mmcfd, officials said.
Petrobangla’s stake in the profits of oil or condensate or natural gas liquid (NGL) produced and saved from the contract areas will be no less than 55 per cent if the oil production is up to 5,000 barrels per calendar day (bcd), no less than 57.5 per cent if the production is 5,000-12,500 bcd, no less than 60 per cent if the output is 12,500-25,000 bcd, no less than 65 per cent if it is 25,000-40,0000 bcd, no less than 70 per cent if 40,000-65,000 bcd, no less than 75 per cent if 65,000-100,000 bcd and no less than 80 per cent if the production volume is over 100,000 barrels per day.
According to the energy ministry, a total of 14 companies had purchased bid documents to participate in the bidding round. The US-based Chevron, ConocoPhillips and ExxonMobil; Anglo-Dutch Shell Oil; Australia’s Santos and Carnavan; Statoil of Norway; Cris Energy of Singapore; Oil and Natural Gas Corporation (ONGC) of India; ENI of Spain; Premier of the UK; Bahrain Petroleum Company (BAPCO) of Bahrain; Cairn India; and China National Offshore Oil Corporation (CNOOC) were among the IOCs that purchased tender documents. However, they expressed their dissatisfaction over the price of gas that the state-owned oil and gas company, has offered in the offshore bidding round-2012 package.

-With The Independent input

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