Deep-sea block bid submission deadline now Jan 12

Deep-sea block bid submission deadline now Jan 12

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State-owned Petrobangla has finally announced a new schedule for the aspirant international oil companies (IOCs) submitting bids for three deep-sea blocks under revised terms and conditions. Under the new schedule, the IOCs will have to submit their bids before or on January 12, 2014 as bid documents were made available for purchase on October 27, said a senior Petrobangla official. Upon a request from the IOCs, Petrobangla suspended the bidding—the Bangladesh Bidding Round 2012—in April this year and moved for bringing changed conditions for deep-sea hydrocarbon exploration. Last month, the government approved six changes to ‘Model Production Sharing Contract (PSC) 2012’, a key document, as per recommendation of Petrobangla to facilitate the participation of the IOCs. Among the six changes, the major one is to allow the IOC to sell its obtained gas to a third party. Earlier, no IOC had such opportunity. They were allowed to sell their gas only to state-owned Petrobangla under the existing PSC. The other changes are raising gas price to US$ 6.5 per thousand cubic feet (MCF) from the existing US$ 5.5 per MCF, hiking the price by 2 percent every year for price adjustment, payment of corporate tax by Petrobangla instead of IOCs, raising the cost recovery portion to 70 percent from 55 percent and exempting IOCs from paying 4 percent transportation tariff to Petrobangla for carrying gas within the country. Besides, a new clause has been introduced in the Model PSC which makes it obligatory for the IOCs to transfer technology and recruit more Bangladeshis. While amending the PSC, the officials said these changes have been brought in line with the offers of neighbouring Myanmar and Sri Lanka, who are also inviting foreign oil companies to bid in their territories for oil and gas exploration. Petrobangla initiated tenders in December last year to invite IOCs for hydrocarbon exploration in the country’s nine shallow and three deep-sea gas blocks. But at one stage of the bidding, the foreign companies showed their reluctance about submitting bids for deep-sea blocks, terming the Model PSC’s conditions stiff and unsuitable. – UNB

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