Lukewarm response to Dhaka’s oil exploration offer

May 8th, 2008 - 2:52 pm ICT by admin  

Dhaka, May 8 (IANS) Only seven multinationals have shown interest in the 16 offshore blocks that Bangladesh hopes to throw open for oil and gas exploration. Media reports said Thursday that some of the offers were overlapping different blocks and oil companies wanted to invest a total of $1.6 billion.

The offshore bidding was announced in February for 20 deep sea blocks and eight shallow water blocks - each with an exploration area between 3,000 and 7,000 sq km.

Only nine companies demonstrated seriousness by purchasing block data.

The oil companies submitted bids until Wednesday afternoon. An hour later, they were opened in the presence of representatives of oil companies, officials and journalists at the seminar room of the state sector oil/gas company, Petrobangla, The Daily Star said Thursday.

Australian oil company Santos International appeared as the top bidder, making a total investment proposal of $852 million under three production sharing contracts (PSCs) for six blocks. Santos has joint venture partnerships with British company Cairn and Chinese-US joint venture Longwoods Resources and Shanghai Zhongman Petroleum (LR & SZP).

Santos faced stiff competition from US oil company ConocoPhillips that submitted offers in common blocks. ConocoPhillips offered to invest $442.63 million under four PSCs for eight blocks.

Chinese-US joint venture Longwoods Resources Ltd, in joint venture with LR & SZP, offered to invest $170 million in three blocks.

Cypriot oil company Comtrack Services offered to invest $61 million in two blocks under one PSC, Irish company Tullow Bangladesh offered $50 million in one shallow water block and Chinese oil giant CNOOC offered $115 million in one shallow water block.

A seventh company, Korea National Oil Corporation of South Korea, submitted a bid for a block along with a bank guarantee proposal of $2.5 million without making any investment commitment. It stated that it would conduct a seismic survey over 1,000 km but did not mention any expenditure.

Petrobangla said it was satisfied with the outcome of the bidding.

“Twenty-five companies had purchased our promotional package and seven companies submitted bids. We are satisfied with the outcome,” said Petrobangla Director (PSC) M. Muktadir Ali after the offers were opened.

This bidding is the first of its kind in the country, a bid to catch up with neighbours India and Myanmar.

India has heavily explored the Bay in recent years and has found 100 trillion cubic feet (tcf) gas and two billion barrels of oil. In 2006, Myanmar discovered seven tcf gas in an offshore area which may be overlapping with Bangladesh’s maritime boundary.

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