The Petrobangla Production-Sharing Contract (PSC) did not get final approval. In the middle of last year, Petrobangla was asked to amend PSC to explore oil, gas in land and sea which was then sent to the ministry of energy for approval from the policy makers of government.
However, final approval is still pending, which has left the tender process in limbo.
Petrobangla Chairman Ruhul Amin told Bangla Tribune, “It’s not our duty to finalise PSC; after corrections, we have sent it to the ministry and once it’s approved, an international tender will be called.”
A Petrobangla official said, “Due to PSC, there’s no progress in oil-gas exploration.”
Meanwhile, Energy Division Joint Secretary Nazmul Ahsan, says, “To expedite the pace of work of the energy ministry, we took several plans, one of which is the correction of PSC.”
Another official says, “Advisers have talked about two changes to PSC, one is the price of gas and another, cost recovery rate.”
Foreign companies have been demanding 100 per cent cost recovery, which means they will recover their total expenditure, but if that happens, then Petrobangla will not get any gas.
Petrobangla is for keeping recovery between 65 and 80 per cent. At present, the price of each unit of gas in deep sea is $6.5 which the oil gas companies want to raise to the level of LNG in international markets.
The companies want to raise the price to $ 9 but Petrobangla is not willing to hike it so much. The country has 48 blocks, of which 22 are on land and 26 on sea. Of the blocks at sea, 11 are in shallow waters and 15 in deep sea. On land, Chevron is extracting gas from blocks 12, 13 and 14.
Chris Energy is extracting gas from Bangura while Santos, Chris, ONGC and Pesco Daewoo are working on 4 blocks at sea.
Petrobangla says that plans to dig 4 wells at sea are final with Indian company ONGC working in three wells of blocks SS-4 and SS-9.
Santos has begun work at SS-11. In total, of the 48 blocks, work is underway in 8.