Myanmar objects to deal with ConocoPhillips
M Azizur Rahman
Myanmar has objected to Petrobangla's planned signing of a production-sharing deal with US oil giant ConocoPhillips, according to sources.
Myanmar in a recent letter to the foreign ministry requested Bangladesh government to refrain from signing production sharing contract (PSC) with the US firm until the maritime boundary dispute between the two countries was resolved, a senior foreign ministry official said.
Myanmar claimed that both the deep-water offshore gas blocks DS-08-10 and DS-08-11, for which ConocoPhillips was selected to conduct exploration, lay within the boundary of its territorial waters.
The objection from the neighbouring country came at a time when the government completed all necessary formalities with ConocoPhillips before signing the PSC for oil and gas exploration in deep-water offshore gas blocks in the Bay of Bengal.
Petrobangla already inked an initial agreement with ConocoPhillips in October last prior to signing of the PSC on completion of its over two years' negotiation with the US firm.
Under the agreement ConocoPhillips has agreed to start exploration works in two said offshore gas blocks immediately after signing of the PSC.
It also agreed to avoid exploration activities in disputed areas in the blocks as claimed by neighbouring India and Myanmar.
ConocoPhillips has already been kept waiting to sign the PSC for over two years since launching of the 2008 offshore bidding round.
The latest objection from Myanmar over signing of PSC might further delay the signing of PSC with the US firm, said officials.
In its bid in 2008 the ConocoPhillips pledged to invest $110.66 million in total and offered bank guarantee of the same amount for the two blocks it got approval for.
The ConocoPhillips has committed to conduct 2D seismic survey covering 1200 line kilometres (LKM) during its initial five years of exploration period with an investment commitment of $ 2.496 million offering bank guarantee of the same amount.
It has also committed to conduct 3D seismic survey in 500 square kilometres and drill a well during the first extension period of two years investing $58.1665 million and offering bank guarantee of the same amount.
The company has pledged to drill one well in its second extension period of two years with an investment commitment of $50 million.
Officials said Myanmar also had raised objection during Bangladesh's offshore bidding round in 2008 too and had wrote letters to different international oil and gas firms asking them not to take part in the offshore bidding round.
Neighbouring India also raised objection over the bidding that time claiming part ownership over the offshore blocks as delineated by Petrobangla.
Protest from the neighbouring countries resulted in lukewarm response during the country's 2008 offshore bidding when only seven foreign firms submitted bids for 15 gas blocks out of 28 offered blocks.
The government is now in talks with the neighbours to settle the maritime boundary disputes for kicking off exploration in the prospective offshore structures and shrug off the country's perennial energy crisis.
It has also lodged suit with the United Nations tribunal to settle the maritime boundary disputes with neighbours.
At present Australian Santos operates Sangu gas field is the country's lone operational offshore gas field.
The government has so far awarded only 12 hydrocarbon blocks -- both onshore and offshore -- since gas exploration began in Bangladesh in late 1960s.
But the international companies are now active in only six blocks having given up the rest.
M Azizur Rahman
Myanmar has objected to Petrobangla's planned signing of a production-sharing deal with US oil giant ConocoPhillips, according to sources.
Myanmar in a recent letter to the foreign ministry requested Bangladesh government to refrain from signing production sharing contract (PSC) with the US firm until the maritime boundary dispute between the two countries was resolved, a senior foreign ministry official said.
Myanmar claimed that both the deep-water offshore gas blocks DS-08-10 and DS-08-11, for which ConocoPhillips was selected to conduct exploration, lay within the boundary of its territorial waters.
The objection from the neighbouring country came at a time when the government completed all necessary formalities with ConocoPhillips before signing the PSC for oil and gas exploration in deep-water offshore gas blocks in the Bay of Bengal.
Petrobangla already inked an initial agreement with ConocoPhillips in October last prior to signing of the PSC on completion of its over two years' negotiation with the US firm.
Under the agreement ConocoPhillips has agreed to start exploration works in two said offshore gas blocks immediately after signing of the PSC.
It also agreed to avoid exploration activities in disputed areas in the blocks as claimed by neighbouring India and Myanmar.
ConocoPhillips has already been kept waiting to sign the PSC for over two years since launching of the 2008 offshore bidding round.
The latest objection from Myanmar over signing of PSC might further delay the signing of PSC with the US firm, said officials.
In its bid in 2008 the ConocoPhillips pledged to invest $110.66 million in total and offered bank guarantee of the same amount for the two blocks it got approval for.
The ConocoPhillips has committed to conduct 2D seismic survey covering 1200 line kilometres (LKM) during its initial five years of exploration period with an investment commitment of $ 2.496 million offering bank guarantee of the same amount.
It has also committed to conduct 3D seismic survey in 500 square kilometres and drill a well during the first extension period of two years investing $58.1665 million and offering bank guarantee of the same amount.
The company has pledged to drill one well in its second extension period of two years with an investment commitment of $50 million.
Officials said Myanmar also had raised objection during Bangladesh's offshore bidding round in 2008 too and had wrote letters to different international oil and gas firms asking them not to take part in the offshore bidding round.
Neighbouring India also raised objection over the bidding that time claiming part ownership over the offshore blocks as delineated by Petrobangla.
Protest from the neighbouring countries resulted in lukewarm response during the country's 2008 offshore bidding when only seven foreign firms submitted bids for 15 gas blocks out of 28 offered blocks.
The government is now in talks with the neighbours to settle the maritime boundary disputes for kicking off exploration in the prospective offshore structures and shrug off the country's perennial energy crisis.
It has also lodged suit with the United Nations tribunal to settle the maritime boundary disputes with neighbours.
At present Australian Santos operates Sangu gas field is the country's lone operational offshore gas field.
The government has so far awarded only 12 hydrocarbon blocks -- both onshore and offshore -- since gas exploration began in Bangladesh in late 1960s.
But the international companies are now active in only six blocks having given up the rest.
