Photo : Messenger
After a decade-long wait due to maritime disputes, the government has finally initiated exploration in the sea for extracting gas and oil, and consequently floated bids, inviting 55 international gas exploration companies to compete.
However, the government faced criticism over the Speedy Supply of Energy and Power Act-2010, which bypassed the competitive procedure in exploring gas and power plant projects. This time, the ministry is opting for the traditional competitive procedure.
Experts believe that instead of preferring giants, the government should prioritise medium-sized companies to keep prices lower. Larger companies tend to dominate negotiations, whereas small and medium companies often perform better at the initial stages.
“Of course, bidding is a positive initiative, but the government should select small and medium companies to ensure the lowest prices,” Makbul E Elahi, former director of BAPEX, told The Daily Messenger.
He also expressed concerns over the high price of offshore gas, pointing out that neighbouring countries pay less than 7 dollar, while Bangladesh offers 10 dollar excluding corporate tax. India and Myanmar pay 6.5 dollar. Over 25 years, the USA increased from 2.5 dollar to 3.5 dollar.
He mentioned that inviting medium companies could attract 50 more participants, making the bidding rounds more competitive. Moreover, the government should make data accessible to all companies for evaluation and avoid offering two blocks to a single company to prevent monopolies.
State Minister for Power Energy and Mineral Resources told The Daily Messenger, “We amended the PSC to increase the price because none of the energy giants showed interest at the previous price. After the hike, Chevron, Exxon, and some other major companies have shown interest.”
Regarding medium companies, he said, “We don't want inefficient companies offshore.”
Nasrul Hamid also said, “We want world-renowned companies to participate so that we can offer jobs competitively. Promotional seminars will be held after Ramadan, with foreign participation.”
The invited companies include Malaysian Petronas, Saudi Aramco, Kuwait Oil Company (K.O.C.), PTT Exploration and Production Public Company Ltd Thailand, Petrovietnam, Pertamina Indonesia, Oil India Limited, Mitsui Oil Exploration Co Ltd Japan, KrisEnergy Ltd Singapore, ONGC Videsh Limited India, Bahrain Petroleum Co. (BAPCO), Daewoo International Corporation Korea, Korea National Oil Corporation (KNOC), China National Offshore Oil Company (CNOOC), CNPC International Ltd China, SINOPEC China, Idemitsu Oil & Gas Co. Ltd. Japan, Pearl Energy Limited Singapore, Medco Energi Global Pte Ltd Singapore, Pavilion Energy Pte. Ltd Singapore, POSCO International Korea, Abu Dhabi National Oil Company (ADNOC), Qatar Petroleum (QP), Reliance Energy, India, Inpex Corporation Japan, Mubadala Energy Abu Dhabi. Additionally, five Australian companies are competing: Carnarvon Energy Ltd, Santos Ltd, Woodside Petroleum, Caltex Australia Limited, BHP Billiton Limited, and seven American Companies: Chevron, ConocoPhillips, Occidental Petroleum Corporation (Oxy), ExxonMobil, Repsol Energy North America Corporation, Murphy Exploration & Production Company, Talisman USA. Besides, 12 more companies, including those from the EU, will join the bidding.
Bapex's share in the sea will be 10 percent. Petrobangla opened international tenders on March 10 for 24 blocks of offshore oil and gas exploration. Nine national newspapers, as well as the foreign newspaper The Economist, are in the process of publishing tender notices. Multinational oil and gas companies will have six months (until September 9) to submit tenders. Companies will be given 20 years for oil exploration and 25 years for gas.
The last tender for offshore oil and gas exploration was in 2016. In 2019, a new PSC was updated, but no tender was called. 55 top-level companies worldwide have been invited. After the settlement of the sea border dispute, the area has been divided into 15 blocks in the deep sea and 11 in the shallow sea.
In 2010, ConocoPhillips worked on the DS-10 and DS-11 blocks in the deep sea. They demanded a gas price increase after a 2D survey. As their demand was not met, they left the job. On the other hand, Australia's Santos and South Korea's Posco Daewoo left after the agreement. Indian company ONGC is now the only company exploring in two blocks in the shallow sea. Besides these two, tenders have been invited for the remaining 24 blocks.
Messenger/Fameema
