Again Bangladesh received poor response in its re-tender for hydrocarbon exploration as only an Australia-Singapore joint venture, Santos-Kris Energy, submitted bid for a single shallow water block on Monday, the closing day of submission. “We received a bid from the Santos-Kris JV for the block No-SS-11. Initially, two more international oil companies (IOCs) showed their interest, but finally they didn’t submit any bid,” said Petrobangla director Imaduddin.
A total of six (6) shallow water blocks were placed for bidding in the ‘Re-Tender’ following the last year’s tender which also received similar poor response. Petrobangla and energy sector sources said the low gas price offered by the government has been the main reason for such poor response. “Because, neighbouring India, Myanmar and Sri Lanka have increased the gas price in their recent hydrocarbon bidding. Their offer is higher than Bangladesh’s US$ 5.5 per unit (thousand cubic feet) of gas,” said a Petrobangla official.
About the re-tender result, Petrobangla chairman Dr. Hussain Monsur, who seemed unhappy with the poor response, said: “It’s good enough if a single bid is found to be potential.” The state-owned Petrobangla invited first tender in December last year and received offer from IOCs in April this year where only two IOCs submitted bids for three blocks. At that time, a total of nine (9) blocks were placed for bidding. US-based ConocoPhillips and the Indian ONGC Videsh — submitted bids separately for three offshore shallow blocks.
ConocoPhillips had submitted bid for block No.SS-07 while the Indian ONGC’s offers were found for blocks No.SS-04 and SS-09 in the Bay of Bengal. All the three blocks are located in areas in the Bay where there is no dispute with neighbouring India or Myanmar. ConocoPhillips already remain engaged in exploration in deep sea block 10 and 11 after obtaining bids in the tender invited in 2008.
Last year’s verdict by ITLOS (International Tribunal for the Law of the Seas), through which maritime dispute with Myanmar was resolved, paved the way for Bangladesh inviting the bidding. Initially, a total of 12 blocks were placed for the bidding under the `Bangladesh Offshore Bidding Round 2012’. Of the blocks, nine are in shallow sea and three in deep-sea in the Bay.
But later, bid submission for three deep-sea blocks was postponed for bringing a revision into some of the provisions of the model production sharing contract (PSC) to make them “more attractive” to the IOCs. About the latest Santos-Kris offer, Petrobangla director Imadiuddin said the JV company has offered a work programme for 870 km 2D mandatory seismic survey and 300 km mandatory 3D survey. It has given a US$ 15 million bank guarantee. No specific financial expense was mentioned in the bidding offer.
“But their total expense might be US$ 30-32 million for initial 5-year exploration work,” said Imaduddin. – UNB
