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After long gap, global oil cos eager to explore offshore blocks
05 May, 2023, 10:45 pm
Last modified: 05 May, 2023, 10:48 pm
Petrobangla drafts new model product-sharing contract to attract international oil companies
Bangladesh is seeing an increase in interest from international oil production companies – especially from global and regional superpowers such as America, Russia, China, and India – in recent months to explore local potential sites for oil and gas.
The country is receiving these proposals years after some international oil companies, including South Korean Posco International, Australian Santos, and Azerbaijan's Socar, closed their operations here.
Currently, Bangladesh has 26 open offshore and 22 onshore blocks, with 11 offshore blocks located in shallow waters and 15 in deep waters.
The government has granted production-sharing contracts (PSCs) for two shallow sea blocks (SS-04 and SS-09) to ONGC Videsh and Oil India Ltd, which are jointly exploring the areas.
Out of the total onshore blocks, only four have been awarded to international oil companies. Chevron, a US oil giant, is exploring and producing natural gas in three onshore blocks (12, 13, and 14), while Singapore's KrisEnergy is active in block-9.
Meanwhile, Petrobangla has drafted a new model PSC, which is under legal scrutiny to get the final approval, offering a larger output share and increasing the gas price to attract international companies in the local fields.
The proposed PSC suggests an increase in the gas purchase price of IOC-produced gas to around $10 per thousand cubic feet (Mcf), three times higher than the existing PSC's rate. The government's share in "profit gas" is also proposed to decrease to 40%-70%, from the previous PSC's 55%-80%.
Although energy experts see the international oil companies' proposals as a positive sign for Bangladesh, they warn that the government needs to handle the proposals with caution.
Prof Dr Badrul Imam, a senior energy expert in the country, said, "There might be some geopolitical reasons behind the IOCs' proposal, but we should take their proposal as a positive sign for local oil and gas exploration, especially when it comes from giant companies like ExxonMobil.
"Previously companies left fields over gas pricing. Now, other companies are showing interest as Bangladesh is working to make its PSC attractive by increasing the benefits for IOCs, including raising the gas price. So we need to ensure serious negotiations on these proposals."
Earlier on 23 March, Petrobangla Chairman Zanendra Nath Sarker confirmed that the power and energy ministry had received a report from Petrobangla based on ExxonMobil's proposal for deep sea and onshore blocks. The ministry is currently analysing both the proposal and the report, he added.
Along with land, USA wants all the open sea
As a fresh business move, ExxonMobil Corporation, one of the world's largest oil and gas companies, has expressed interest in exploring gas in all the open deepwater offshore blocks and some onshore blocks in the maritime boundary of Bangladesh.
At the same time, Chevron Corporation, which has been developing three wells to supply 60% of gas produced from local fields, is now interested in expanding its footprint in the Sunetra gas field, located in Dharmapasha upazila of Sunamganj district.
The US is a significant foreign partner in Bangladesh's energy sector, with Chevron, an American multinational energy corporation, producing the lion's share of local gas predominantly in oil and gas.
Additionally, Excelerate Energy, a Texas-based natural gas distribution company, has been providing the LNG regasification service to Bangladesh through two floating storage and regasification facilities in Moheshkhali.
The US has also received in-principle approval from the government to build another LNG terminal at Payra in Patuakhali.
To acquire data on hydrocarbon reserves in Bangladesh's part of the Bay of Bengal, Bangladesh has started its much-anticipated multi-client survey, scheduled to be completed by this May.
Dr Tawfiq-e-Elahi Chowdhury has stated that discussions on ExxonMobil and other IOC's proposals are ongoing, and a contract signing could be possible if they agree to Bangladesh's terms and conditions.
Russia keen to make its position stronger
As the USA seeks to expand its business connectivity with Bangladesh, Russia is also exploring potential trade and economic cooperation with Bangladesh, despite the logistical and financial difficulties arising from the unstable geo-political situation.
During the fourth session of the Russia-Bangladesh Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation (IGC), held virtually on 13-15 March this year, Russia proposed exporting liquefied natural gas (LNG) to Bangladesh to meet the latter's long-term energy needs.
The proposal was made against the backdrop of Western sanctions led by the USA, and Russian delegates expressed interest in exporting oil and oil products, cooperation in the coal industry, and the joint development of green energy sources, particularly nuclear and solar energy.
Currently, Russian State Atomic Energy Corporation – Rosatom, a global leader in nuclear technologies, is implementing the Rooppur Nuclear Power Plant in Pabna, which is Bangladesh's maiden nuclear power plant.
Gazprom EP International Investments BV is also engaged in gas exploration in Bangladesh.
Bangladesh currently faces a shortfall in its demand for 3,500 million cubic feet of gas per day (mmcfd), with 2,200 mmcfd coming from internal sources and another 600 mmcf from LNG imports.
While Bangladesh imports LNG from Qatar and Oman, this marks the first time that Russia has offered to export LNG to the country at the government level.
China and India compete over Hill tracts
In addition to the USA and Russia, regional powerhouses India and China also have significant investments in Bangladesh's energy and power sector.
China National Machinery Import and Export Corporation (CMC) has been engaged in coal mining and coal power development, while China Petroleum and Chemical Corporation (Sinopec) has been working in the gas sector.
Meanwhile, neighbouring India has a significant portfolio in Bangladesh's energy and power sector, including cross-border electricity and liquid exports.
Recently, both Asian rivals expressed interest in gas exploration in Bangladesh's hill tracts areas, according to sources at Bapex.
PetroChina Company Limited, an arm of state-owned China National Petroleum Corporation, and Indian Advent Oilfield Services Pvt expressed interest in gas exploration in the same area.
In addition, Indian Oil Corporation Limited (IOCL) and H-Energy have expressed interest in cross-border LNG supply to Bangladesh.
www.tbsnews.net
ENERGY
Eyamin Sajid05 May, 2023, 10:45 pm
Last modified: 05 May, 2023, 10:48 pm
Petrobangla drafts new model product-sharing contract to attract international oil companies
Bangladesh is seeing an increase in interest from international oil production companies – especially from global and regional superpowers such as America, Russia, China, and India – in recent months to explore local potential sites for oil and gas.
The country is receiving these proposals years after some international oil companies, including South Korean Posco International, Australian Santos, and Azerbaijan's Socar, closed their operations here.
Currently, Bangladesh has 26 open offshore and 22 onshore blocks, with 11 offshore blocks located in shallow waters and 15 in deep waters.
The government has granted production-sharing contracts (PSCs) for two shallow sea blocks (SS-04 and SS-09) to ONGC Videsh and Oil India Ltd, which are jointly exploring the areas.
Out of the total onshore blocks, only four have been awarded to international oil companies. Chevron, a US oil giant, is exploring and producing natural gas in three onshore blocks (12, 13, and 14), while Singapore's KrisEnergy is active in block-9.
Meanwhile, Petrobangla has drafted a new model PSC, which is under legal scrutiny to get the final approval, offering a larger output share and increasing the gas price to attract international companies in the local fields.
The proposed PSC suggests an increase in the gas purchase price of IOC-produced gas to around $10 per thousand cubic feet (Mcf), three times higher than the existing PSC's rate. The government's share in "profit gas" is also proposed to decrease to 40%-70%, from the previous PSC's 55%-80%.
Although energy experts see the international oil companies' proposals as a positive sign for Bangladesh, they warn that the government needs to handle the proposals with caution.
Prof Dr Badrul Imam, a senior energy expert in the country, said, "There might be some geopolitical reasons behind the IOCs' proposal, but we should take their proposal as a positive sign for local oil and gas exploration, especially when it comes from giant companies like ExxonMobil.
"Previously companies left fields over gas pricing. Now, other companies are showing interest as Bangladesh is working to make its PSC attractive by increasing the benefits for IOCs, including raising the gas price. So we need to ensure serious negotiations on these proposals."
Earlier on 23 March, Petrobangla Chairman Zanendra Nath Sarker confirmed that the power and energy ministry had received a report from Petrobangla based on ExxonMobil's proposal for deep sea and onshore blocks. The ministry is currently analysing both the proposal and the report, he added.
Along with land, USA wants all the open sea
As a fresh business move, ExxonMobil Corporation, one of the world's largest oil and gas companies, has expressed interest in exploring gas in all the open deepwater offshore blocks and some onshore blocks in the maritime boundary of Bangladesh.
At the same time, Chevron Corporation, which has been developing three wells to supply 60% of gas produced from local fields, is now interested in expanding its footprint in the Sunetra gas field, located in Dharmapasha upazila of Sunamganj district.
The US is a significant foreign partner in Bangladesh's energy sector, with Chevron, an American multinational energy corporation, producing the lion's share of local gas predominantly in oil and gas.
Additionally, Excelerate Energy, a Texas-based natural gas distribution company, has been providing the LNG regasification service to Bangladesh through two floating storage and regasification facilities in Moheshkhali.
The US has also received in-principle approval from the government to build another LNG terminal at Payra in Patuakhali.
To acquire data on hydrocarbon reserves in Bangladesh's part of the Bay of Bengal, Bangladesh has started its much-anticipated multi-client survey, scheduled to be completed by this May.
Dr Tawfiq-e-Elahi Chowdhury has stated that discussions on ExxonMobil and other IOC's proposals are ongoing, and a contract signing could be possible if they agree to Bangladesh's terms and conditions.
Russia keen to make its position stronger
As the USA seeks to expand its business connectivity with Bangladesh, Russia is also exploring potential trade and economic cooperation with Bangladesh, despite the logistical and financial difficulties arising from the unstable geo-political situation.
During the fourth session of the Russia-Bangladesh Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation (IGC), held virtually on 13-15 March this year, Russia proposed exporting liquefied natural gas (LNG) to Bangladesh to meet the latter's long-term energy needs.
The proposal was made against the backdrop of Western sanctions led by the USA, and Russian delegates expressed interest in exporting oil and oil products, cooperation in the coal industry, and the joint development of green energy sources, particularly nuclear and solar energy.
Currently, Russian State Atomic Energy Corporation – Rosatom, a global leader in nuclear technologies, is implementing the Rooppur Nuclear Power Plant in Pabna, which is Bangladesh's maiden nuclear power plant.
Gazprom EP International Investments BV is also engaged in gas exploration in Bangladesh.
Bangladesh currently faces a shortfall in its demand for 3,500 million cubic feet of gas per day (mmcfd), with 2,200 mmcfd coming from internal sources and another 600 mmcf from LNG imports.
While Bangladesh imports LNG from Qatar and Oman, this marks the first time that Russia has offered to export LNG to the country at the government level.
China and India compete over Hill tracts
In addition to the USA and Russia, regional powerhouses India and China also have significant investments in Bangladesh's energy and power sector.
China National Machinery Import and Export Corporation (CMC) has been engaged in coal mining and coal power development, while China Petroleum and Chemical Corporation (Sinopec) has been working in the gas sector.
Meanwhile, neighbouring India has a significant portfolio in Bangladesh's energy and power sector, including cross-border electricity and liquid exports.
Recently, both Asian rivals expressed interest in gas exploration in Bangladesh's hill tracts areas, according to sources at Bapex.
PetroChina Company Limited, an arm of state-owned China National Petroleum Corporation, and Indian Advent Oilfield Services Pvt expressed interest in gas exploration in the same area.
In addition, Indian Oil Corporation Limited (IOCL) and H-Energy have expressed interest in cross-border LNG supply to Bangladesh.
After long gap, global oil cos eager to explore offshore blocks
Petrobangla drafts new model product-sharing contract to attract international oil companies
