Offshore deals okayed for ConocoP, Tullow Dhaka, Aug 24 (bdnews24.com)—Bangladesh has approved offshore oil, gas exploration deals with two international companies, ConocoPhillips and Tullow Oil plc, in three sea blocks. The companies will not be able to operate in any disputed waters of the blocks in the resource-rich Bay of Bengal. "Proposals from the two companies seem worthy. So, we decided to award them three blocks, 5, 10 and 11," finance minister AMA Muhith said after chairing a meeting of the cabinet committee for economic affairs on Monday that approved the deals. ConocoPhillips, the third largest energy company in the US, will get deep-sea blocks 10 and 11. Shallow-sea block 5 will be awarded to Irish company Tullow that already operates in Bangladesh's Bhangura gas field. Muhith said the mineral resources ministry has been recommended to sit with the two companies on the new deals. "The ministry will inform the companies that they will not be able to explore in the areas of the three blocks disputed with India and Myanmar," he told reporters. Muhith said results of the exploration are expected within the next four to five years, depending on the depth of the blocks. Foreign minister Dipu Moni, who also attended the meeting, was optimistic about concluding the exploration within the stipulated period. "Discussions are on to resolve disputed waters with India and Myanmar in bilateral talks and also in international forums," she said. Monday's decision ends some of the year-long uncertainty regarding the allotment of offshore blocks previously selected by state-owned Petrobangla for IOCs to explore under production sharing contracts. A total of 28 Bay of Bengal blocks, eight in shallow water and 20 in deepwater, were offered for competitive bidding last year under the past caretaker government. The government received a total of 22 bids from seven companies for 15 offshore blocks—three shallow-sea and 12 deep-sea. It marked the third time Bangladesh had invited international oil companies to explore for oil and gas in the country, with earlier international bidding rounds in 1993 and 1997 for onshore explorations. ConocoPhillips and Tullow were shortlisted for exploration deals in nine of offshore blocks after last year's bidding. Conoco won bids for eight deep-sea blocks in all (DS-08-10, DS-08-11, DS-08-12, DS-08-17, DS-08-15, DS-08-16, DS-08-20 and DS-08-21). It proposed to invest about $450 million for exploration of all eight blocks Tullow submitted the winning bid for shallow-water block SS-08-05 offering to spend $50 million. Both companies reportedly wrote several times to the energy ministry since then to know the fate of the blocks they were selected for. Prime minister Sheikh Hasina, after coming to power in January, said Bangladesh was planning to move ahead with offshore exploration deals with IOCs after proper scrutiny of all proposals. A summary on the proposed deals was sent to the prime minister in June. She referred them to the economic affairs committee for further scrutiny at the start of July. Bangladesh, with about 15 trillion cubic feet (425 billion cubic metres) of proven and recoverable gas reserves, is currently facing around 100 million cubic feet of gas shortages a day. |
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