The government is set to sign a Production Sharing Contract (PSC) with US energy giant ConocoPhillips by next week to explore blocks 10 and 11 for oil and gas in the hydrocarbon rich Bay of Bengal.
Such PSC for exploration in the Bay is the first in Bangladesh when the government is eagerly waiting for immediate launch of exploration in the potential areas to reduce supply-demand energy gap.
The PSC is a special agreement between the government and foreign contractors signed mainly for petroleum exploration and development.
Both the government and Conoco have concluded their discussion positively on the issues which had created discords earlier, says a high official of the Energy and Mineral Resources Division (EMRD).
“We are hopeful that we can sign an agreement with ConocoPhillips by next week. The ministry instructed us to sign the agreement before the Eid-ul-Azha. We have prepared the draft which awaits law ministry vetting,” said Muhammad Imaduddin, director (PSC), of Petrobangla.
Imaduddin added Conoco representatives have agreed with the government position on the PSC and expressed their intention to sign it as early as possible.
“We have invited them to visit Bangladesh to sign the agreement,” he informed.
Earlier, Conoco was demanding a sovereign immunity for its project and residual rights to other blocks while participating in the bidding. But the government cleared its position that it would not be able to allow Conoco a sovereign immunity and residual rights to other blocks.
“Conoco sought addition of sovereign immunity provision to the PSC to secure their staff and company from any legal complexity. But Petrobangla cleared its position that it could not give them any extra privilege beyond the PSC procedure,” Imaduddin said.
On their earlier demand on residual rights to other blocks, the government cleared its position that it would not be able to guarantee any residual rights to the other six blocks in which Conoco was the highest bidder.
By residual rights Conoco has been demanding a priority when the government would award other six blocks for exploration.
The government has agreed to resolve any dispute to any third country court as the company demanded.
The army-backed emergency government invited bids for offshore exploration in February 2008 after dividing its sea territory in the Bay into 28 blocks.
In 1974, Petrobangla conducted the first round bidding, in which 47 companies took part. Petrobangla signed six contracts.
In 1988, Petrobangla called the second round bidding, but no international oil companies showed interest.
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