The cabinet committee on economic affairs is set to approve a proposal to award three shallow-sea blocks to an American and an Indian company to boost gas production to meet its rising demand.
US-based oil company ConocoPhillips will be awarded block 7, while India’s Oil and Natural Gas Corporation Ltd (ONGC) will get blocks 4 and 9 under the Bangladesh Offshore Bidding Round 2012.
The energy and mineral resources division will soon seek permission from the cabinet committee to sign production sharing contracts with the companies, an official said.
It came after Prime Minister Sheikh Hasina in principle agreed to award the three shallow-sea blocks in the Bay of Bengal for exploring gas.
Both companies will conduct 2-D, 3-D seismic surveys to drill development wells in the blocks.
ConocoPhillips will share 55 percent to 80 percent of the gas discovery and 60 percent to 85 percent of oil discovery with Bangladesh.
ONGC will provide 60 to 85 percent of the gas discovery and 70 to 90 percent of the oil discovery to Bangladesh.
Officials said the exploration would aim to meet the demand for gas in the Chittagong region, which is suffering from an acute energy crisis. The offshore bidding was announced in December last year to explore nine shallow blocks and three deep-sea blocks.
Sources: The daily star
related article with additional information
ConocoPhillips to start exploration next winter
M Azizur Rahman
US oil giant ConocoPhillips, encouraged by its 2D seismic survey outcome, plans to carry out further exploration deep into the Bay of Bengal, a senior Petrobangla official said.
“ConocoPhillis this month has expressed its intention to start the exploration programme in the next winter, Petrobangla Director for production sharing contract, Muhammed Imaduddin, said Saturday.
Originally, the US firm had no plan for exploration in 2013.
But ConocoPhillips has moved away from its initial plan and now wants to carry out exploration, perhaps, after being encouraged by the 2D survey result, he said.
ConocoPhillips is planning to carry out more seismic programmes including 2D and 3D and drill an exploration well in the deep sea blocks of DS-08-10 and DS-08-11, he added.
Exploration of ConocoPhillips in deep water gas blocks in Bangladesh, which is first international oil company to do so, is very important to ensure the country’s future energy security, Imaduddin said.
Bangladesh is now experiencing natural gas crisis with the production hovering around 2,200 million cubic feet per day (mmcfd) against the demand for over 2,700-3,0000 mmcfd.
ConocoPhillips on June 16, 2011 signed a production sharing contract with Bangladesh’s state-run Petrobangla for part of two deepwater gas blocks — DS-08-10 and DS-08-11 — in the Bay of Bengal which the US firm won in Bangladesh’s 2008 bidding.
A 2D seismic grid in 100 square kilometres radius of the whole blocks, is part of ConocoPhillips mandatory work programme under the PSC terms.
Under the PSC, ConocoPhillips will get a total of nine years to carry out exploration work, with five years as a primary exploration period and two years each for the first and second extended exploration periods.
Minimum work programme, under the deal, includes carrying out of 973 line kilometre seismic survey and drilling one (optional) well during the initial exploration period.
During the first extended exploration period, ConocoPhillips will have to carry out 500 sqkm 3D seismic survey and drill one exploration well as minimum bided work programme under the PSC.
Drilling another exploration well having a minimum of 2200 metres true vertical depth (TVD) from seabed during the second extended exploration periods is also a commitment of ConocoPhillips, as per the PSC.
The US oil company has provided a $52 million guarantee for the initial exploration period, $58 million for the first extension period and $50 million for the second extension period, as per the deal.