Bangladesh is close to approving a new model production-sharing contract (PSC) that will expedite the country’s long-delayed hydrocarbon exploration in the Bay of Bengal. The proposed PSC awaits approval from the cabinet committee on economic affairs and aims to attract international oil companies (IOCs) to explore oil and gas reserves in the bay. Under the new draft contract, Petrobangla, the state-owned energy company, will purchase hydrocarbons from exploration contractors at a higher price, linked to the benchmark used for liquefied natural gas (LNG) purchases.
The proposed pricing formula sets the buying price at around US$7.6 per million British Thermal unit (MMBtu) based on the current global Brent crude price. Additionally, the model PSC suggests reducing the government’s share in “profit gas” from 70% to around 40%. Bangladesh has recently completed a multi-client survey in a significant portion of its sea territory to identify hydrocarbon reserves, with results expected in August. The seismic data will be shared with interested IOCs for basin evaluation and participation in the upcoming bidding for exploration.
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