New tender for Bay exploration likely by month-end

Dhaka, Dec 14 (bdprem.com) – A new round of bidding for exploration of oil and gas in the Bay of Bengal could be invited late this month or in the beginning of the next, at the latest, officials have said. A proposal is awaiting approval from the Council of Advisers, the current cabinet, they said. Your Ad Here The energy and mineral resources ministry has also proposed changes to the production-sharing contract with the oil and gas firms, they said. "We have made attempts to invite tender by Dec 31. If it's not possible, we'll do that in the first weeks of January," Mohamnmad Mohsin, secretary to the ministry, told bdnews24.com by phone late Thursday. "The matters are now in the hands of the Council of Advisers." He said his ministry got the go-ahead from the law ministry to float the tender. On whether they would face any trouble since Bangladesh shared maritime borders with India and Myanmar, the secretary said he saw no problem. "I don't foresee any problem with India and Myanmar. Still, if there's any we'll sort it out through talks." The interim government after assuming power in mid-January divided the waters in the Bay into 28 blocks to search for oil and gas. Of the blocks eight are in less-deep sea while the rest in deep sea. The blocks' area ranges from 2,000 square kilometres to 7,000 square kilometres. Another official said they proposed to the government to change the production-sharing contract module. Petrobangla, the official agency for the exploration of the oil and gas, made the proposal to make the terms and conditions "contemporary", said its chairman Jalal Ahmed. Jalal acknowledged that they were on the process to call the tender for the offshore bidding of the blocks, which would take place soon after the interim cabinet gave the go-ahead. Another Petrobangla official, who spoke to bdnews24.com on condition of anonymity, detailed the proposed changes to the PSC. "Previously Petrobangla was responsible to pay the corporate tax of the international oil companies. But in the proposed changes it has been taken under the conditions put by the Board of Investment. "It means the oil and gas exploration companies would now enjoy tax holiday for up to 10 years and an individual up to three years," he said. The official also said the proposed changes recommended that the international oil companies could not hand over a contract to any other company "at their will". A company must inform Petrobangla first to transfer the shares and in such case Petrobangla would get a portion of the stakes, he added. The changes stemmed from the past instances where many companies had sold their shares to another company at the highest price and without informing Petrobangla, depriving the government of any benefit. "Under the new arrangement nothing could be done without the knowledge of Petrobangla. If there's an emergency Petrobangla must be notified in 30 days. "Local engineers and workers would get priority. To hire foreigners a company must need prior approval from the government," the official said. In 1993-94, the government invited first international bidding for 23 onshore and offshore blocks for exploration of gas and oil. The second round bidding took place in 1997-98. In 2005, a government effort to float the tenders did not see light.