The cabinet committee on economic affairs in a meeting on Thursday agreed in principle on the draft Bangladesh Offshore Model Production Sharing Contract enabling state-owned Petrobangla to call soon international tenders on 26 exploration blocks in the Bay of Bengal.
Presided over by finance and planning minister Amir Khosru Mahmud Chowdhury at the secretariat, the meeting also agreed in principle to provide subsidy to power produced by the state-owned plants and joint venture plants, and imported from Adani Power Limited plants in India and Nepal.
Officials said that the draft Bangladesh Offshore Model Production Sharing Contract had been prepared by reviewing the previous ones so as to attract international oil companies (IOCs).
The country has been trying to explore its offshore blocks in the Bay over the past two decades after settling maritime boundary disputes with Myanmar in 2012 and India in 2014 but has been struggling to attract IOCs.
Last time in 2024, the Petrobangla invited bids and extended the deadline but without any success.
Officials said that the latest draft had brought about changes to issues of gas pricing, pipeline cost recovery, and work obligations after pre-bidding review meeting with participating IOCs.
Contractors will now be allowed to relinquish 20 per cent of the awarded spaces in place of the previous 50 per cent, expected to be suitable for operational flexibility, while the contribution to the Workers’ Welfare Fund has been revised down to 1.5 per cent of profits instead of 5 per cent, said the officials.
The officials also said that the prices of Brent crude oil -- instead of high-sulphur fuel oil -- would be the determining factor for gas pricing while the pipeline tariffs would be determined through direct negotiation with successful bidders.
Of the 26 offshore blocks, 11 are located in shallow sea waters, while 15 are located in deep sea water areas.
Officials also said that the pricing modalities had been same for both water blocks while the bidders would enjoy liberty to export natural gas after meeting domestic demand.
The approval from the cabinet committee reflects pledges for the first 180-day activities by the newly elected Bangladesh Nationalist Party-led government, which included exploring natural gas from the Bay to meet local demand.
Against the backdrop of falling gas supply from onshore wells, Bangladesh has been importing natural gas, some portion of it from the spot-market, often at high prices because of the supply disruptions in the wake of ME conflicts and geo-politics.
The latest war in Persian Gulf between the United States forced Bangladesh and other countries to pay high prices for energy items.
