Petrobangla officials were left shocked as none of the international oil companies (IOCs) submitted bids for oil and gas exploration in the country's offshore blocks, after the deadline for bidding expired on Monday.
“We were really stunned by the non-submission of bids from the interested bidders,” a senior official of the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) told UNB.
Outgoing Petrobangla Chairman Zanendra Nath Sarker speculated that the declining trend of oil prices in the international market could have contributed to the lack of response.
However, some Petrobangla officials believe that the prevailing uncertainty surrounding the interim government and the political climate in the country would also have played a major role in the failure to generate even a single bid.
The Petrobangla chairman mentioned that a total of seven IOCs had purchased bid documents and nine IOCs had purchased offshore data packs in preparation for submitting bids in the round titled "Oil and Natural Gas Exploration Under Bangladesh Offshore Bidding Round 2024".
These companies include ExxonMobil and Chevron (USA), Petronas (Malaysia), the joint venture TGS and Schlumberger (Norway and France), Inpex Corporation and Jogmac (Japan), China National Offshore Oil Corporation (CNOOC), Eni SPA (Italy), Chris Energy (Singapore), and ONGC (India).
Petrobangla had floated the international open tender on March 10 this year, allowing six months for bid submission for the exploration of oil and gas within the country’s maritime boundary in the Bay of Bengal.
After two pre-bid meetings, the submission deadline was extended by three months, at the request of the IOCs, to 1 pm on December 9, 2024.
As per the tender, the bid documents were to be opened immediately after the submission deadline.
However, when UNB visited Petrobangla around 1 pm on Monday, none of the IOCs had arrived to submit their bids. Only one Petrobangla official was present to receive them.
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The tender outlined 24 offshore blocks available for bidding—nine shallow sea blocks and 15 deep-sea blocks. The shallow sea blocks include SS-01, 02, 03, 05, 06, 07, 08, 10, and 11, while the deep-sea blocks include DS-08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, and 22. Bidders, either individually or in association with other companies, could bid for one or more blocks.
According to the terms of the bids, contracts with successful bidders would be signed under the Bangladesh Offshore Model Production Sharing Contract 2023, as specified in the tender.
Qualification criteria for bidders included offshore daily production of at least 15,000 barrels of oil or 150 million standard cubic feet (mmsc) of gas, and at least one instance of global experience in oil and gas exploration and production outside their home country.
Notably, US giants ExxonMobil had displayed a strong interest in Bangladesh's offshore blocks, with a delegation led by its Opportunity Manager Jonathan Wilson visiting the country last February and sitting in talks with Petrobangla, apart from the then-state minister for Power and Energy Nasrul Hamid.
That followed a proposal in 2023, included in a letter from Wilson to Hamid, "to explore the country's untapped deepwater hydrocarbon blocks under a new production-sharing contract model, as well as carry out oil and gas exploration in some onshore blocks."
The Awami League government that Hamid was part of, was spectacularly deposed by a student-led mass movement in August, followed by a prolonged period during which uncertainty persisted over the law and order situation.
Almost everything to do with the old regime was overturned, possibly cooling interest on the part of ExxonMobil and other IOCs, with uncertainty yet to clear over the investment climate.
Exploration in Bangladesh's offshore blocks, particularly the deep sea ones, is going to be a high-risk, capital intensive venture that requires one of the giant IOCs to take an interest, according to experts.
The previous government was also expecting Chevron, which already operates in the country, to submit a bid as well, after convincing the company not to wrap up their operations here.
The Petrobangla chairman stated that they will now attempt to meet with the IOCs to understand why they did not submit their bids despite showing strong interest.
This information will then be conveyed to the government’s policymakers, who will take further steps in line with the directives of the Ministry of Power and Energy.