Bangladesh reopens doors to offshore energy exploration

Seeking to address its dwindling energy reserves, Bangladesh on Sunday reopened international bidding for oil and gas exploration in the Bay of Bengal.

This marks the first such tender in eight years and encompasses a total of 24 blocks, spread across deep (15) and shallow (9) waters. Despite a 2019 production sharing contract (PSC), tenders have not been offered until now.

A PSC is a key agreement in offshore oil and gas exploration bidding. It essentially outlines the terms of collaboration between a government and a contractor company for exploring and extracting resources in a designated offshore area.

Zanendra Nath Sarker, the chairman of state-owned energy corporation Petrobangla, stressed that the new contract is significantly improved compared to previous ones. “It offers more attractive terms for investors,” he told Anadolu.

The tender will be open for the next six months, attracting interest from major energy companies. Sources at Petrobangla revealed invitations sent to 55 companies, including giants like ExxonMobil, Chevron, ConocoPhillips (US), and Sinopec (China).

This move comes at a critical juncture. Bangladesh faces a growing energy crisis, fueled by rapidly depleting gas reserves and a surge in global fuel prices since the start of the Ukraine war. Experts warn that without new discoveries, the country's gas reserves could be completely exhausted by 2033.

Bangladesh's dwindling foreign currency reserves meanwhile have impacted its ability to import oil and gas, prompting a $4.7 billion bailout request from the International Monetary Fund last year.

Despite its largely unexplored offshore potential, Bangladesh had previously faced maritime boundary disputes with neighboring Myanmar and India, which hampered explorations in the Bay of Bengal. Experts now see the renewed exploration efforts as a positive step towards securing the country's energy future.

“Our gas reserves in lands are going to be exhausted soon. We have to do offshore exploration,” said Shamsul Alam, energy advisor at the Consumer Association of Bangladesh (CAB). “I hope the government will maintain transparency in the bidding process.”