Dhaka, Bangladesh: Dhaka will soon begin exploration of gas and oil in the Bay of Bengal, provided the government gives the go-ahead based on the evaluation report submitted by Petrobangla to the ministry, Chairman of Petrobangla Jalal Ahmed said.
Petrobangla, which is the state-run oil, gas and mineral company has selected US firm ConocoPhillips and Anglo-Irish independent firm Tullow for hydrocarbon exploration in the Bay of Bengal. ConocoPhillips was selected for exploring hydrocarbon in eight deep-water blocks, while Tullow won one block in the shallow waters, he added.
"The US-based oil company ConocoPhillips and the Irish oil company Tullow were qualified by the evaluation committee for exploration in our offshore gas fields in nine blocks and after receiving the final approval from the government, the companies would be allowed to begin gas exploration work within the next few months," Ahmed added.
Currently, Bangladesh is facing a power crisis, where it needs up to 200 million cubic feet of gas each day and the demand is rising daily. To fulfill this demand, the government had floated tenders on February 15, 2008 and seven companies have submitted 22 separate bids to explore natural gas and oil in 15 offshore blocks out of 28 blocks, officials said.
The companies, which participated in the bidding were Australia's Santos International, US-China joint venture Longwoods Resources, Korean National Oil Corporation, China National Offshore Oil Corporation, Cyprus-based Comtrack Services, US firm ConocoPhillips and Anglo-Irish independent company Tullow, sources said.
ConocoPhillips and Tullow would have to share 55% of their profits with Petrobangla and also pay corporate tax to the government at the rate of 40%. Currently, foreign oil and gas producers in Bangladesh pay no taxes to the government, officials said.
The two companies have been permitted up to nine years for exploration in deep-water blocks and eight years for shallow sea blocks. The offshore area has been carved up into 30 blocks ranging from 2611 square kilometres to 7703 square kilometers.
However, neighbouring Burma and India have raised objections over gas blocks being demarcated by the Bangladesh government, within its economic zone in the Bay of Bengal. "Only one block could have a problem and that would be solved through negotiations," Ahmed said.
Meanwhile, Bangladesh has become involved in a dispute with Burma, after the latter sent warships to support a Korean company drilling some 50 km south of Bangladesh's Saint Martin Island. Bangladesh immediately deployed four warships in the area and warned it would take "all possible measures" to protect its sovereignty. "Burma has withdrawn two warships," a senior Bangladeshi Navy officer, speaking on condition of anonymity, said on November 6.
"It is a positive response. There is now very little tension in the area. The four other ships engaged there for exploration activities are also preparing to back off. Their drilling work has already been stopped. We will also withdraw our vessels as soon as they remove their drilling ships," he added.
The Korean company, Daewoo, has stopped drilling and withdrawn the machinery, which had been installed in the waters of the Bay of Bengal, Bangladesh Foreign Adviser Iftekhar Ahmed Chowdhury said, based on information received from government sources of the Republic of Korea.
The Foreign Ministry also received a letter from the Daewoo Company stating that the dismantling process had begun, and might take a few days to be completed, he said. "This is indeed good news, and if true it would mean that our initiative has paid off," he added.
The area is marked as deep-sea blocks 8-13, a source from Petrobangla said.
