Govt discusses with Tullow deal signing on offshore gas block

September 30, 2009

Despite protests and street agitation against awarding gas block to any foreign companies
Petrobangla officials on Tuesday discussed with Tullow officials the modalities of signing a deal on gas exploration in the country’s territorial waters in the Bay of Bengal under a government decision, which has faced with raucous protests.
According to official sources, Tullow country director Richard Lee led the Irish oil company’s delegation while Petrobangla Chairman M Muktadir Ali led the stat-owned petroleum corporation at the negotiation.
This meeting between the government side and the IOC took place at a time when a coalition of protestors comprising country’s leftist political parties and groups is waging street agitation against awarding any gas block to any foreign companies.
Earlier, Petrobangla had sent invitation to two international oil companies-Irish Tullow and US-based ConocoPhillips-to sign their respective agreements with it to take over the responsibility of exploration in three gas blocks in shallow waters and in the deep-sea area of the bay.
The outcomes of the meeting between Tullow and Petrobangla were not immediately known. But sources said that the local Tullow officials communicated the Petrobangla that the agreement-signing invitation was sent to their headquarters for further steps.
Petrobangla officials said they would discuss with ConocoPhillips next week the proposed deals awarding gas blocks in the deep sea. The government on August 26 decided to award contracts to the two IOCs for hydrocarbon exploration in three blocks within the country’s maritime boundary.
As per the decision, the US-based ConocoPhillip will be awarded block-10 and 11 in the deep-sea areas while the Irish company, Tullow, will obtain block-5 in the shallow-water area. As per bidding conditions, the IOCs will be initially given 8 years for exploration, then 3 years for project appraisal and next 25-30 years for production.
The government, however, tagged a condition in its decision that the selected two IOCs would not conduct their exploration in the disputed areas under the blocks unless the disputes are settled with the neighbouring countries.
According to Energy Ministry, all the 3 blocks have more or less disputes with either India or Myanmar.
Against the backdrop of nagging energy crisis, the immediate-past caretaker government invited international bidding in February in 2008 for 28 hydrocarbon blocks in shallow-and deep-sea areas. A number of foreign companies had submitted their offer for 15 blocks out of 28. But, after bid evaluation, only 9 offers from two companies were found to be responsive. Of the IOC duo, ConocoPhillips submitted offers for 8 blocks while Tullow vied for only one.

Courtesy of UNB, Dhaka

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