Multinational curiosity surges in Bay of Bengal oil and fuel exploration

Bangladesh is witnessing a surge of multinational curiosity in its untapped oil and fuel reserves within the Bay of Bengal. As Petrobangla, the nationwide oil firm of Bangladesh, prepares for essential conferences with a number of multinational firms, the potential for vital overseas funding within the area’s power sector is turning into more and more obvious. This text explores the newest developments, together with upcoming bilateral conferences, multinational curiosity, and the strategic steps Bangladesh is taking to draw funding.

Zanendra Nath Sarker, the Chairman of Petrobangla, has introduced that a number of bilateral conferences with multinational firms will happen earlier than Eid. These conferences are a part of Petrobangla’s strategic efforts to draw overseas funding in oil and fuel exploration within the Bay of Bengal. Chairman of Petrobangla acknowledged, “We’re taking preparations for bilateral conferences with a few firms earlier than Eid. Moreover, we’re contemplating extending the tender submission deadlines for some firms”.

These conferences purpose to finalize negotiations and foster collaboration with worldwide power giants. Among the many potential contributors is Chevron, a significant US-based oil firm. In accordance with Petrobangla officers, a gathering with Chevron is prone to be the primary on this sequence of discussions.

The Japan Vitality Summit held in Tokyo on June 4th supplied additional insights into the rising curiosity of multinational firms in Bangladesh’s offshore oil and fuel sector. Through the summit, Haley Fam, Vice President of Enterprise Growth for ExxonMobil Asia Pacific, expressed eager curiosity in collaborating with Bangladesh for oil and fuel exploration within the Bay of Bengal. Though she didn’t touch upon whether or not ExxonMobil had bought the tender paperwork, her remarks underscored the continued discussions between the corporate and the Bangladeshi authorities.

Bangladesh has divided its maritime territory into 26 blocks, comprising 15 deep-sea and 11 shallow-sea blocks. At the moment, India’s Oil and Pure Gasoline Company (ONGC) is conducting exploration actions in two shallow-sea blocks. The remaining 24 blocks are open for tender, with the deadline for submissions prolonged till September 9, 2024. This extension is aimed toward accommodating the pursuits of multinational firms and making certain complete participation within the tender course of.

Petrobangla’s proactive strategy consists of inviting over 55 top-tier firms from world wide to take part within the tender. Following the decision of maritime boundary disputes, Bangladesh has established possession over 118,813 sq. kilometers of sea territory, making a conducive surroundings for exploration and funding.

To draw multinational firms, Petrobangla has launched a lovely Manufacturing Sharing Contract (PSC) mannequin. Not like earlier PSCs, the place fuel costs have been fastened, the brand new mannequin ties fuel costs to the worldwide Brent crude market. The fuel value per thousand cubic ft is ready at 10 p.c of the Brent crude value. This represents a major shift from the sooner fastened charges of US$5.6 and US$7.25 per thousand cubic ft for shallow and deep-sea blocks, respectively.

The brand new PSC mannequin, applied in 2019, goals to make sure a balanced progress ratio between fuel manufacturing and income sharing. Beneath this mannequin, Bangladesh’s share of fuel manufacturing will vary from 35 to 60 p.c in deep-sea blocks and 40 to 65 p.c in shallow-sea blocks, relying on manufacturing ranges. This versatile strategy goals to draw multinational firms whereas making certain a fair proportion of sources for Bangladesh.

On Could 8, 2024, Petrobangla hosted a world seminar on the brand new PSC mannequin, which was attended by over 15 multinational firms. The seminar supplied a platform for in-depth discussions on funding alternatives and the potential of Bangladesh’s offshore oil and fuel sector. Through the seminar, Nasrul Hamid, the State Minister for Energy, Vitality, and Mineral Sources, highlighted the numerous curiosity proven by worldwide firms in exploring Bangladesh’s maritime sources.

Dr. Tawfiq-e-Elahi Chowdhury, the Prime Minister’s Advisor for Energy, Vitality, and Mineral Sources, emphasised the wealthy potential of Bangladesh’s maritime space. He acknowledged, “Our sea space is a resource-rich area. The multi-client survey knowledge signifies vital potential. If we will present a positive funding local weather, we will appeal to substantial funding”.

Bangladesh is on the cusp of a significant transformation in its power sector, with multinational firms exhibiting heightened curiosity in exploring the Bay of Bengal’s oil and fuel reserves. Petrobangla’s strategic initiatives, together with bilateral conferences, engaging PSC fashions, and proactive engagement with worldwide stakeholders, are positioning Bangladesh as a promising vacation spot for power investments.

Because the nation prepares for essential discussions with Chevron and different multinational firms, the prospects for unlocking the huge potential of the Bay of Bengal’s sources have gotten more and more tangible. With a positive funding local weather and strategic partnerships, Bangladesh is poised to harness its maritime wealth and drive financial progress within the coming years.