Off shore exploration in Bangladesh can be a risky proposition Bangladesh has granted exploration rights to Conoco Philips and Tullow oil in three disputed offshore blocks in the Bay of Bengal. The oil companies are expected to spend about $160 millions exploring the area. Given the lack of agreement and understanding between Bangladesh, Myanmar & India regarding the ownership of the territory involved , this can be a somewhat risky proposition. There has been some tension between Bangladesh & Myanmar in the recent past on this very issue. The Bangladesh government recently awarded exploration rights to Conoco Philips and Tullow oil to explore some offshore blocks in the Bay of Bengal. Bangladesh is bordered by India on one side and Myanmar on the other side on its southern coast which touches the Bay of Bengal. The Bay of Bengal has seen a lot of exploration activity recently and is estimated to hold reserves of about 18 billion barrels of oil and about 200 trillion cft of natural gas. Substantial gas reserves have already been discovered by Reliance Industries in the KG basin in the bay of Bengal. The ownership of some of the territory in 3 offshore blocks awarded by Bangladesh has been disputed by Myanmar & India. This is because the maritime boundary between India- Bangladesh and Bangladesh-Myanmar is disputed. Under the UN Convention on Law of the Sea(UNCLOS) 12 nautical miles from the coast is territory, 200 nautical miles is Exclusive Economic zone and 350 miles is continental shelf of the country. Both India and Myanmar have maintained that this be demarcated using the Equi distant principle whereas Bangladesh has insisted on demarcating their territory based on the principle of Equity. This use of different basis and the curved shape of the coast line at the top of the Bay of Bengal has resulted in an overlap of some territory between India-Bangladesh and Bangladesh-Myanmar. As per International law, the equidistant principle of demarcation will apply if there is no prior agreement/claim/historic reason for not applying it. Bangladesh has not filed a claim to the ICJ as yet and has not had any talks with India on this subject for the last 28 years. In case Bangladesh does not file a claim by July 27th, 2011, the equidistant method of demarcation will apply and some of these blocks will become India/Myanmar territory. Thus it will be prudent to wait and see the developments on this front before spending any money on exploration in the disputed areas. |
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