The Government of the People’s Republic of Bangladesh along with Petrobangla (state-owned gas company) has announced the Bangladesh Offshore Bidding Round 2024. A total of 24 offshore blocks, comprising nine shallow sea blocks (SS-01, 02, 03, 05, 06, 07, 08, 10 & 11) and fifteen deep sea blocks (DS-08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 & 22), are now open for exploration bids from International Oil Companies (IOCs).
This move comes with highly attractive terms, aimed at fostering competition and a lucrative environment for oil and gas exploration; the invite noted that there is no requirement for royalty or a signature bonus.
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The offering is made under the Bangladesh Offshore Model Production Sharing Contract 2023, which allows for the full repatriation of profit by IOCs, an uncapped gas price linked with international markers, and an oil price determined based on the fair market value prevailing in South and South East Asia. Moreover, IOCs benefit from several operational incentives such as no duty on imported equipment and machinery for petroleum operations, Petrobangla bearing the contractor’s corporate income tax liability, and a bank guarantee for the performance of the minimum exploration program.
The contract also stipulates a 100% cost recovery with a yearly cap of 75%, and mandates a work program consisting solely of a 2D seismic survey. IOCs have the option to sell or export their share of natural gas, subject to Petrobangla’s right of first refusal. Additionally, for shallow sea blocks, there is a carried stake of 10% for BAPEX (Bangladesh Petroleum Exploration & Production Company).
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To qualify for bidding, individual bidders or at least one member of a joint venture must have offshore daily production of at least 15,000 barrels of oil or 150 million standard cubic feet (mmscf) of gas as Operator. Additionally, bidders must demonstrate at least one global experience in oil & gas exploration and production outside their home country.
Bids, required to be submitted in duplicate in sealed envelopes marked “Confidential,” are due by 1:00 pm BST on 09 September 2024, with a public opening of bids scheduled on the same day.
According to TGS, the Bengal fan offshore Bangladesh is considered one of the most extensive unexplored frontier basins with one of the world’s largest deepwater fans and significant evidence of working petroleum systems.
