Bangladesh will import 1.5 million (15 lakh) metric ton of crude oil from Saudi Arabia and United Arab Emirates (UAE) for the year 2024. The Cabinet Committee on Economic Affairs (CCEA) in a virtual meeting, with Finance Minister AHM Mostafa Kamal, in-principle approved a proposal in this regard. As per proposal of the state-owned Bangladesh Petroleum Corporation (BPC), moved by the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources, the crude oil will be imported through direct purchase method (DPM) which means there was no tender or competitive bidding process in selecting the supplier. Dhaka urges Riyadh to consider crude or refined oil on deferred payment basis The proposal mentioned that Saudi Aramco and UAE-based Adnoc will supply the total crude petroleum. While briefing reporters about the outcomes of the Cabinet body's meeting, additional secretary of the Cabinet Division Sayeed Mahbub Khan informed that the cost or price of petroleum was not mentioned in the proposal as it came for in-principal approval. Bangladesh needs to import about 6.5 million metric ton of petroleum oil annually. Of this, about 1.5 million is crude and the remaining amount is refined petroleum. Glitch in brand new pipeline halts transfer of crude oil from mother vessel in Maheshkhali    The Cabinet body approved, in-principle, another proposal -- of Bangladesh Hi-Tech Park Authority under the Department of Information and Communication Technology -- to appoint a private company for operation and maintenance work of its “Vision 2041 Smart Tower” in Kawranbazar, Dhaka. The company will operate the building under the "Digital Entrepreneurship and Innovation Eco-System" project after its construction work.

The Cabinet Committee on Economic Affairs (CCEA) in a meeting today (July 26, 2023) approved the draft ‘Bangladesh Offshore Model Production Sharing Contract (PSC) 2023’ in order to invite international bidding for hydrocarbon exploration in offshore areas of the country.   Finance Minister AHM Mustafa Kamal presided over the meeting. However, Additional Secretary of the Cabinet Division, Sayed Mahbub Khan, who briefed about the outcomes, did not give further details of the Model PSC.  "This is the final approval to the draft Model PSC 2023,” he said. Cabinet purchase body approves import of LNG, rice bran oil and fertiliser According to official sources, the new Model PSC was prepared as part of the plan to invite international bidding within the current year for offshore deep and shallow water gas blocks by making Bangladesh more attractive to international oil companies and draw investment in hydrocarbon exploration in the Bay of Bengal. Under the initiative, the gas price was tagged with the price of Brent Crude in the international market so that the gas price will be flexible. “Under the plan, we’re going to offer the price of gas at 10 percent of Brent Crude,” a top official of Petrobangla, the state-owned national gas company, told UNB. The official, preferring anonymity, said if Brent oil is traded at $75 per barrel, the gas price would be $7.5 per thousand cubic feet (MCF). The gas price will always remain linked with the international oil price, he said, referring to the new provision of the 'Model PSC 2023'. Govt expedites gas exploration activities to increase primary fuel supply: Nasrul Hamid But there will be no difference between the price of gas in shallow and deep water blocks, he said, describing other characteristics of the 'Model PSC 2023'. “If the oil price goes down or up, the gas price will follow it rationally and Bangladesh will purchase the explored gas from the international oil companies at this rate,” said the official. Under a Model PSC, normally, if any international oil company (IOC) discovers gas, it gets a 40 percent stake while the government obtains the remaining 60 percent. The government also buys the IOC's gas at a certain price. So if the gas price is raised, IOCs feel encouraged to invest in exploration work. Keeping retail gas tariff unchanged govt resets margins of upstream, downstream companies Official sources said the country has a total of 48 blocks, of which 26 are located offshore. Of the 26 offshore blocks, 11 are located in shallow sea (SS) water while 15 are located in deep sea (DS) water areas. Of these, 24 offshore gas blocks remain open for IOCs while two blocks—SS-04 and SS-09–are under contract with a joint venture of ONGC Videsh Ltd and Oil India Ltd where drilling works have recently started. Bangladesh's offshore area remains unexplored despite the settlement of its dispute with neighbouring Myanmar and India over maritime boundary almost nine years ago. Titas Gas faces assaults from local lawmakers' supporters when removing illegal gas connections: Titas MD Currently, about 2300 mmcfd gas is being produced from 22 gas fields in the country, while about 700 mmcfd gas is being imported from abroad to meet the demand of about 4000 mmcfd, leaving a deficit of about 1000 mmcfd. The government had last amended the Model PSC in mid-2019, whereby the price of gas for any participating IOC, that is, the price at which they would sell the gas to the government, was raised to $5.5 per MCF for shallow water blocks, and $7.25 per MCF for gas extracted from its deep sea blocks. The source also informed that the new proposal has been prepared as per the recommendations of a Scottish consultancy firm, Wood Mackenzie, which was appointed last year to work out the new plan for Petrobangla to attract international bidding from IOCs. Talking to reporters, Petrobangla Chairman Zanendra Nath Sarker recently said the organisation has forwarded its proposal along with the Scottish consultancy firm’s recommendation to the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources, seeking its approval for the plan. Another senior official of Petrobangla also said that as soon as the Cabinet body approves the proposal, the organisation will invite international bidding within two months. “In this case, we hope we can go for bidding within this year,” he told UNB preferring anonymity. He said previously many IOCs were reluctant to participate in bidding for exploration due to the price offered by Bangladesh. Govt planning to invite int’l bidding for offshore blocks with more attractive PSC “Now we hope it will be a lucrative offer for the IOCs to invest in the offshore areas of Bangladesh for gas exploration,” he added. Official sources said the recent excessive hike in fuel prices, especially that of liquefied natural gas (LNG), has prompted the government to go for further amending the existing PSC so that the IOCs get interested to invest here. There was a target to invite international bidding in March 2020 for exploration in offshore areas, but that got postponed due to the coronavirus pandemic that emerged at exactly the same time. "The recent upward trend in oil and gas prices has pushed the policymakers to further raise the gas price by introducing much more flexibility and incentives including keeping the export option open in the PSC," said another Petrobangla official. He mentioned that the government had to import LNG at $36 per MMBtu while it was just below $10 early last year. The Russian invasion of Ukraine has further deepened the global market volatility pushing up petroleum price over $100 per barrel, the highest in the last 7 years. Now, again oil and gas prices are on a downward trend and Brent crude oil is traded at $75 per barrel while LNG price is at below $14 per MMBtu. New PSC: Petrobangla awaits final nods to invite int’l bidding for offshore blocks

State hydrocarbons agency Petrobangla’s is close to receiving the nod from the very top, to invite a round of international bidding for Bangladesh's offshore gas blocks based on its new model production sharing contract (Model PSC) within the current year. A proposal in this regard was recently sent to the Prime Minister’s Office (PMO) for its approval to proceed, UNB understands from its sources. “We’ve received initial approval from the Energy and Mineral Resources Division and then, as the next step, it was forwarded to the PMO as Prime Minister is the in-charge of the ministry,” said a top official of Petrobangla, preferring not to be named in discussing the sensitive issue. He said after the PM's approval, it would be placed in the Cabinet Committee on Economic Affairs (CCEA) for the very final approval, as it acts as the highest policymaking body. Since the PM heads the CCEA, that should be a formality once it passes her desk.  Read:  ‘Excessive delay’ in clearing dues: BPDB could end up paying independent power producers Tk 6000cr more Then Petrobangla will be free to move towards inviting the international bidding round, he noted.  Earlier, Petrobangla updated its Model PSC,  to make it more attractive for international oil companies (IOCs) to explore for oil and gas in the country’s maritime areas in the Bay of Bengal. In the new Model PSC, the gas price will be offered at 10 percent of Brent Crude, the most traded of all the oil and gas benchmarks. It means if Brent is being traded at $75 per barrel, the price at which the government would buy any gas the company is able to produce at $7.5 per thousand cubic feet (MCF). “The gas price will always remain linked with the international oil price,” said the official, referring to the new provision in the 'Model PSC 2023'. Read: Bangladesh needs to develop a National Hydrogen Strategy, says Australia-based scientist Dr Nawshad There will also be no difference between the price of gas in shallow or deep water blocks, he said. This is another change from the previous PSC. “If the oil price goes down or up, the gas price will follow it rationally and Bangladesh will purchase the gas from the IOCs at this rate,” said the official. Under a Model PSC, normally, if any IOC discovers gas, it gets a 40 percent stake while the government obtains the remaining 60 percent. The government also buys the IOC's gas at a certain price. So if the gas price is raised, IOCs feel encouraged to invest in exploration works. Read: Petrobangla initiates move to end foreign company’s monopoly in pre-paid gas metering system The government had last amended the Model PSC in mid-2019, whereby the price of gas for any participating IOC, that is, the price at which they would sell the gas to the government, was set at $5.5 per MCF for shallow water blocks, and $7.25 per MCF for gas extracted from deep sea blocks. Scottish consultancy firm Wood Mackenzie was appointed last year to update the Model PSC - specifically, to make it more attractive to IOCs. Petrobangla chairman Zanendra Nath Sarker recently said the organisation forwarded its proposal to the Energy and Mineral Resources Division for approval with a plan to go for international bidding by July or August this year. Officials said previously many IOCs were reluctant to participate in the bidding of the exploration due to the low price offered by Bangladesh. Read More: Petrobangla initiates move to end foreign company’s monopoly in pre-paid gas metering system Official sources said the recent excessive hikes in petroleum fuel price, especially that of liquefied natural gas (LNG), prompted the government to go for further amending the existing PSC so that the IOCs get interested to invest here. The country has a total of 48 blocks of which 26 are located offshore and 22 onshore. Of the 26 offshore blocks, 11 are located in shallow sea (SS) water while 15 are located in deep sea (DS) water areas. Of these, 24 offshore gas blocks remain open for IOCs while two blocks -SS-04 and SS-09-are under contract with a joint venture of ONGC Videsh Ltd and Oil India Ltd where drilling works have recently started. Bangladesh's offshore area remains largely unexplored, especially its deep sea (DS) blocks,  despite the settlement of its dispute with neighbouring Myanmar and India over the maritime boundary almost nine years ago. Read more: Govt planning to invite int’l bidding for offshore blocks with more attractive PSC Currently, about 2300 mmcfd gas is being produced from 22 gas fields in Bangladesh, while about 700 mmcfd gas is being imported from abroad to meet the demand of about 4000 mmcfd, leaving a deficit of about 1000 mmcfd daily.

The cabinet economic affairs committee (CCEA) on Wednesday approved in principle two proposals, including the procurement of two Russian helicopters by the Bangladesh Police. The CCEA gave the nod to the proposal of the Bangladesh Police at a meeting to procure the two helicopters from Russia under a G-to-G contract. However, the cost of the helicopters was not disclosed in the meeting as the issue will come to the cabinet committee on public purchase (CCPP) for the final approval. Meanwhile, the CCPP today approved 7 procurement proposals, including the import of LNG, wheat and fertiliser. Read: Cabinet purchase body clears procurement of huge wheat, fertiliser As per the CCPP-approved proposals, state-owned Petrobangla will import 33.60 lakh MMBtu of liquified natural gas (LNG) from Vitol Asia Pte Pls, Singapore at a cost of Tk 1,205 crore -- each MMBtu price at $35.8932 -- while another 33.60 lakh MMBtu of LNG will be imported from Gunvor Singapore Pte. Ltd at a cost of Tk 1,241 crore -- each unit price at $36.95. About the purchase of such a huge bulk LNG import on a single occasion, Finance Minister AHM Mustafa Kamal said through this import Bangladesh has completed its required purchase of fuel up to December year. “Since the price of LNG is rising, we’ve made advance procurement,” he told reporters. Read: Quick energy supply: Cabinet approves 5-yr extension of special provision The Food Directorate General will import 100,000 metric tons of wheat from Russia under a G-to-G contract at a cost of Tk 357.61 crore. Bangladesh Chemical industries Corp[oration (BCIC) will import 30,000 metric tons of bulk granular urea from Fertiglobe Distribution limited, UAE at Tk 127.67 crore while another 30,000 MTs will be imported from Muntajat, Qatar, at a cost of Tk 129.84 crore.

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal of the Health Service Division to import Sinofarm Covid-19 vaccine. Dr Shahida Aktar, additional secretary to the Cabinet Division, disclosed this while briefing reporters after a meeting of the committee.  She, however, did not provide any detail about the price of the Chinese vaccine and its quantity. “It’s just an approval made in principle. Details of the proposal will be known when it’ll come again for approval of the Cabinet Committee on Public Purchase.”  Dr Shahida said the proposal was instantly placed on the table during the virtual meeting. She said the CCEA approved another proposal of the Health Service Division to import 40 Oxygen generators to be used for the treatment of Covid patients. Also read: Dhaka requests Delhi to send vaccine to Bangladesh soon The Central Medicine Store Department (CMSD) will import the oxygen generators. Another proposal made by the Industries Ministry received approval of the CCEA to sign a contract for the import of 1.28 million metric tons of fertiliser from three countries for the fiscal year 2021-2022. Of the bulk fertiliser, 500,000 mt will be imported from Muntajar Qatar, 500,000 mt from Sabic of Saudi Arabia and 250,000 mt from Fertiglbe of the UAE. Meanwhile, the Cabinet Committee on Public Purchase (CCPP) approved nine proposals, including the import of LNG and awarding a contract for installing a 400MW power plant to a Chinese contractor. As per the proposal, state-owned Petrobangla will import 3.360 million MMBtu of (liquified natural gas) LNG from AOT Trading of Switzerland at a cost of Tk 340.62 crore -- $10.199 per unit. Also read: Bangladesh to get 106,000 doses of Pfizer vaccine on June 2: Health Ministry State-owned Bangladesh Power Development Board (BPDB) will award an EPC contract to Chinese contractor SEPCO-III Electric Power Construction Company Ltd, at a cost of Tk 1,796.72 crore to set up a 400MW gas-fired power plant at Raozan Power Station in Chattogram. The plant will be installed replacing the existing one. A proposal of the Bangladesh Police received approval of the committee to award a contract Joint Venture of (1) Smart Technologies (BD) Ltd, Dhaka and (2) Digicon Technologies Ltd, Dhaka to introduce surveillance systems on Dhaka-Chattogram Highway. Under the contract, the contractor will set up CCTV monitoring systems and other infrastructure on the highway. Two other proposals of the Directorate General of Food (DGF) received approval of the CCPP. Also read: Bangladesh seeks at least 2 mln doses of AstraZeneca vaccine from Canada The DGF will award a Tk 261.70 contract to the Joint Venture of (1) Beximco Computers Limited, Bangladesh, (2) Bangladesh Export Import Company Ltd. Bangladesh, (3) Tech Mahindra Ltd. India, and (4) Tech Valley Networks Ltd. Bangladesh to install software, set up data centres and monitoring systems at all the food storehouses across the country under the package No-GD-27 of the “Modern Food Storage Facilities (MFSP)” project. The DGF will award another contract of Tk 330.86 crore under the package No-W-21 of the same project to Joint Venture of (1) Confidence Infrastructure Limited, Bangladesh and (2) The GSI Group LLC, USA to set up a food steel silo for rice at Barisal. Payra Port Authority’s tender proposal to award a Tk 5,629.18 crore contract to Jan De Nul (JDN), a Belgium-based dredging company, to conduct capital dredging and maintenance at the Rabonabad channel of the Payra Port received approval of the committee. Another proposal of Bangladesh Inland Water Transport Authority (BIWTA) under the Shipping Ministry received approval of the CCPP to award a contract to Karnaphuli Ship Builders Ltd., to construct and supply four coastal passenger vessels at a cost of Tk 230.95 crore.