State-owned Petrobangla has re-opened its international tender for three deepwater blocks in the Bay of Bengal under revised terms and conditions for international oil companies (IOCs), according to one official.
The revisions include significant fiscal and commercial improvements, such as increased gas price, annual price escalation, enhanced annual cost recovery limit and a tax waiver for the contractor for the entire life of the project. Others include no transmission tariff and the scope to sell the contractor’s gas to a third party within the country, according to Petrobangla’s director for production sharing contracts (PSCs), Muhammad Imaduddin.
The blocks on offer are DS-12, DS-16 and DS-21, with bidders able to compete for one or more.
Imaduddin added that the individual company or at least one member of a joint venture must have existing offshore production of at least 15,000 b/d of oil or 150 MMcf/d of gas as an operator to qualify to bid. Contracts will be signed with successful bidders in line with the revised model production-sharing contract (MPSC) 2012.
IOCs that have already purchased the promotional package are not required to buy it again, the official added. It expects to receive bids for the blocks by 12 January, 2014. The license areas cover between 3,190 sq km to 3,516 sq km each, with water depths ranging from 200-2,000 m (656-6,562 ft).
Under the revised MPSC for deepwater blocks, the prices of wellhead oil and gas would increase by at least 2% annually with the start of production.
Other features of the revised MPSC include full repatriation of profit, no signature bonus or royalty, and no duty for equipment and machinery imported for petroleum operations during exploration, production and development. It also includes provision for assignment of interest and share transfer, 100% cost recovery, mandatory work programmes consisting of 2D seismic for each block, minimum work obligation in each of the exploration periods and a maximum 70% cost recovery per calendar year.
The three blocks were first offered for exploration alongside nine other shallow-water blocks in December 2012. The authorities then suspended bidding on the three deepwater blocks to review the PSC terms and to make it competitive with the PSC terms of neighbouring India and Myanmar.
Petrobangla awarded two deepwater blocks – DS-08-10 and DS-08-11 – to ConocoPhillips in June 2012. The US operator has so far carried out 2D survey work.
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