US-headquartered ConocoPhillips plans to begin oil and gas exploration in two deepwater gas blocks offshore Bangladesh in the Bay of Bengal in October, Petrobangla Chairman Hussain Monsur said Thursday.
"ConocoPhillips has informed us of its plan to initiate seismic surveys in two deep-sea block areas exploring for oil and gas in October," he said.
ConocoPhillips signed a production sharing contract with state-owned oil and gas company Petrobangla last Thursday to explore in parts of the two offshore natural gas blocks that it was awarded in a 2008 tender.
ConocoPhillips won the right to conduct hydrocarbon exploration in DS-08-10 and DS-08-11 spanning a total area of 5,158 square kilometers (1,992 square miles), 280 km (174 miles) off Chittagong, where water depths are 1,000-1,500 meters. It can explore 70% of DS-08-10 and 85% of DS-08-11, with the rest in limbo until Bangladesh resolves a maritime boundary dispute with India and Myanmar.
Under the PSC, ConocoPhillips has up to nine years to carry out exploration work; five years for primary exploration, including a 973 km seismic survey and the drilling of one well, and two extensions of two years each. The company has provided guarantees worth $52 million for the initial period, $58 million for first extension and $50 million for the second.
The profit share for Petrobangla is 55-80% for natural gas and 60-85% for oil or condensate.
The PSC with ConocoPhillips is Bangladesh's first deepwater exploration contract and its first contract with an international oil company since 2001.
News of the agreement has provoked protest in Bangladesh, including calls for a half-day strike on July 3, which has been criticized by the country's leadership.
Monsur said ConocoPhillips' deepwater exploration is important to ensure the country's future energy security.
Bangladesh's deepwater potential is unexplored and any positive results could change the country's energy scenario, he said.
Bangladesh's current natural gas production, at around 1.98 Bcf/day, falls short of domestic demand of 2.50 Bcf/d.
Petrobangla has suspended new gas connections and rationed supply to existing customers in a bid to manage the shortfall.
