Could Bangladesh finally be on the verge of a much-needed and long-awaited upstream renaissance?

Government officials are upbeat following Posco Daewoo’s encouraging results from a recent seismic survey and its decision to acquire more detailed 3D data later this year before potential exploration drilling.

The South Korean operator is today the only company engaged in exploring Bangladesh’s deep waters, but state-owned Petrobangla is hoping others will be tempted back to its gas-prone offshore plays.

The government is having yet another review of its production sharing contract terms, which might again be revised ahead of a touted offshore acreage offering before the end of next year.

Dhaka had been buoyed by United Nations Convention on the Law of the Sea rulings in 2012 and 2014 that awarded Bangladesh more territorial waters from disputes with neighbours Myanmar and India.

However, Bangladesh has been unable to capitalise on these rulings, whilst its neighbours have held successful rounds.

Myanmar also mandated that foreign players partner at least one local company for shallow-water and onshore blocks in its 2013 licensing rounds, to help domestic outfits gain valuable experience.

Such a move could benefit Bangladesh and might help improve public sentiment about foreigners exploiting its hydrocarbon resources.

There is little doubt the nation has more gas to be discovered, both offshore and onshore, but making it attractive to international players with the required technologies, skills sets and adequate finances is another matter.

Bangladesh of late has abandoned formal licensing rounds, instead awarding acreage under the Speedy Supply of Power & Energy (Special Provision) Act 2010, which removes the need for a competitive tender and indemnifies government officials from prosecution for their decision-making.

If Posco Daewoo does discover a significant gas field and the government can further improve its PSC terms, other international companies might just be tempted to give Bangladesh a shot.

Weekly

Bangladesh hopes to spur oil and gas revival