The Bangladesh government is improving its production sharing contract terms ahead of a proposed new international offshore licensing round in 2019.

Local government officials claimed state-owned Petrobangla has been updating the PSC model with the aim of making it more attractive to overseas players.

“One of the major changes is reduction of the mandatory seismic survey period to three years from the existing five years and giving an option to the contractor to decide whether to move further for exploration work,” a senior Petrobangla official was quoted by the Dhaka Tribune.

Removal of the need to drill a commitment exploration well is hoped to be a sweetener to prospective companies, according to the official.

Exploration drilling would only be required after the initial three-year term under the revised PSC terms.

Bangladesh has 26 offshore blocks – 15 in deep waters and 11 shallow-water tracts but only four (SS-11, SS-04, SS-09 and DS-12) have been awarded since 2014.

Indian partners ONGC Videsh and Oil India were awarded shallow-water blocks SS-04 and SS-09 and the Santos-Kris Energy joint venture got shallow-water Block SS-11 from the most recent licensing round in 2014.

Meanwhile, South Korea’s Posco Daewoo was subsequently awarded deep-water Block DS-12 via the Speedy Supply of Power and Energy (Special Provision) Act 2010 that allowed acreage to be granted without an open tender as Bangladesh struggles with a growing gas supply demand deficit.

“Since there was a big time gap between the last round of bidding in 2014, we’re now moving to invite international bidding in 2019,” said the Petrobangla official.

He added that the relevant documents are almost ready and, after a presentation before policymakers, the documents will be sent to the law ministry for its approval.

“Once we receive the vetting, we have a plan to invite the bidding in the first half of 2019,’ said the official.

However, Prime Minister Sheikh Hasina’s energy advisor Tawfiq-e-Elahi Chowdhury, has rejected the possibility of Bangladesh offering up any onshore acreage in the short term.

Despite revising the PSC terms, Petrobangla will not be increasing the price paid for gas ultimately produced from any blocks awarded from the planned 2019 offshore licensing round.

The price will remain at $6.5 per thousand cubic feet for deep-water blocks and $5 per Mcf for shallow-water fields.

Also, gas exports will still not be allowed from shallow-water blocks although operators will be able to export volumes produced from deep-water plays provided Petrobangla or another local outfit does not want to purchase this output.

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Bangladesh sweetens PSC terms