Dhaka: Burma has objected to Bangladesh's plan to sign a production-sharing deal between Petrobangla and US oil giant ConocPhilips, according to a media report of Bangladesh.

The report said that Burma recently sent a letter to the foreign ministry requesting the Bangladesh government refrain from signing the production-sharing contract, or PSC, with the US firm until the maritime boundary dispute between the two neighboring countries was resolved. The report quoted senior foreign ministry officials in Bangladesh.

Burma claimed that both the deep-water offshore gas blocks, DS-08-10 and DS-08-11, that ConocoPhilips selected for exploration, lay within the boundary of Burma's territorial waters.

The objection from Burma came about after the government completed all necessary formalities with ConocoPhilips before signing the PSC for oil and gas exploration in the deep-water offshore gas blocks in the Bay of Bengal.

Petrobangla already inked an initial agreement with ConocoPhilips in October last year, prior to signing of the PSC on completion of over two years' negotiations with the US firm.

Under the agreement, ConocoPhiilips has agreed to start exploration work in the two offshore gas blocks immediately after signing of the PSC. The company also agreed to avoid exploration in areas of the offshore blocks that are disputed by India and Burma.

ConocoPhilips has already been kept waiting over two years to sign the PSC, since it the launch of the first round of bidding in 2008.

The latest objection from Burma over signing of the PSC might further delay the agreement with the US firm, the report quoted officials as saying.

In its initial 2008 bid, ConocoPhilips pledged to invest $110.66 million in total and offered a bank guarantee of the same amount for the two blocks it was approved for.

ConocoPhilips has also committed to conducting 2D seismic survey covering 1200 line kilometers during its initial five years of exploration, with an investment commitment of $2.496 million and a bank guarantee of the same amount. The company has also committed to conduct 3D seismic survey in 500 square kilometers and drill a well during the first extension period of two years, investing $58.1665 million with a bank guarantee of the same amount.

The company has pledged to drill one well in its second extension period of two years with an investment commitment of $50 million.

According to sources, Burma also had raised objections during Bangladesh's offshore bidding round in 2008 and wrote letters to different international oil and gas firms asking them to not take part in the offshore bidding round.

Burma is not alone in its objections, with India also claiming part ownership of the offshore blocks targeted by Petrobangla for development.

Protest from the neighboring countries resulted in lukewarm response during the country's 2008 offshore bidding round, with only seven foreign firms submitting bids for 15 out of the 28 offered gas blocks.

The Bangladesh government is now in talks with its neighbors to settle the maritime boundary disputes and to kick off exploration in the prospective offshore blocks and shrug off the country's perennial energy crisis. It has also lodged a suit with the United Nations tribunal to settle the maritime boundary disputes.