Dhaka, Dec 09: Despite extending the deadline and attracting initial interest from seven foreign companies, no bids were submitted for oil and gas exploration in the Bay of Bengal, officials from Bangladesh Oil, Gas, and Mineral Resources Corporation (Petrobangla) confirmed.
The tender submission period, which ended at 1:00pm on Monday, yielded no participants.
Petrobangla had extended the original six-month deadline by three months to December 9 to encourage more competition.
However, none of the foreign companies that purchased tender documents, including major players like ExxonMobil, Chevron, and Inpex, came forward.
Possible reasons for lack of interest
Petrobangla officials suggested that global and domestic factors might have deterred bidders.
Political Uncertainty: Companies might be wary of the current political situation in Bangladesh.
Market Conditions: The global decline in oil prices, which directly affects gas pricing under the Production Sharing Contract (PSC)-2023, may have reduced the financial appeal. The current oil price of $70–72 per barrel translates to $7–7.2 per unit of gas, a drop from higher rates during the tender’s announcement.
A decade without discoveries
Bangladesh has yet to find significant oil or gas reserves in the Bay of Bengal, despite resolving maritime disputes with India (2012) and Myanmar (2014). Over the years, four foreign companies initiated exploration, but three exited prematurely, with the remaining company set to leave by February 2024.
The recent tender covered 15 deep-sea and 9 shallow-sea blocks, with promises of more favorable terms compared to previous agreements. Officials had expressed optimism based on data from a 12,000-kilometer seismic survey conducted by TGS and Schlumberger, which was showcased at a seminar attended by over 15 international companies in May.
Next steps
Petrobangla Chairman Janendra Nath Sarkar told journalists that the situation would now be reassessed. “We will contact the interested companies to understand their concerns, make necessary amendments, and prepare for a new tender,” he said.
Long road ahead
Since the last tender in 2016, efforts to attract foreign investment have faced hurdles. Companies like ConocoPhillips, Santos, and Posco Daewoo previously abandoned projects over disagreements on pricing. Currently, India’s ONGC is the sole company exploring two shallow-sea blocks.
Bangladesh’s maritime boundary comprises 24 exploration blocks, with 15 located in deep-sea areas and 11 in shallow waters. Currently, India’s ONGC is conducting exploration in two shallow-sea blocks.
To boost offshore oil and gas exploration, tenders were invited on March 11, with an initial submission deadline of September 9. The deadline was later extended by three months, concluding on December 9.
The previous tender for offshore exploration was issued in 2016. Although a new Production Sharing Contract (PSC) was finalised in 2019, no tenders were called until this year.