Bangladesh has launched a fresh international bidding round for offshore oil and gas exploration in 27 blocks in the Bay of Bengal, offering a range of incentives aimed at attracting foreign investment and boosting the country’s energy security.
State-owned Petrobangla on Sunday invited international tenders for exploration activities in 12 shallow-sea blocks and 15 deep-sea blocks under the Offshore Bidding Round 2026.
The initiative comes as Bangladesh faces increasing energy shortages and rising dependence on imported fuel despite resolving maritime boundary disputes with neighbouring countries more than a decade ago.
According to Petrobangla, international oil companies interested in participating in the bidding process have been asked to submit their proposals by 1pm on 30 November.
Under the proposed Production Sharing Contract (PSC), foreign companies will be allowed to export gas if Petrobangla or domestic buyers decline to purchase it. However, Petrobangla will retain the first right of refusal. Companies will also be permitted to sell gas to other local buyers if necessary.
Gas prices under the contracts will be linked to international crude oil prices, with fixed floor and ceiling limits aimed at reducing market volatility. For deep-sea blocks, gas prices will be set at 11 per cent of the prevailing international oil price, with a minimum price of $7.5 per MMBtu and a maximum cap of $11 per MMBtu. In shallow-sea areas, the ceiling price has been fixed at $10.5 per MMBtu.
To encourage investment, the government has offered several financial incentives. Petrobangla will bear the income tax liabilities of expatriate employees working under the projects, while imported machinery and materials for exploration and production activities will receive full customs duty exemptions.
The draft agreement outlines a nine-year exploration period. The first four years will be dedicated to geological and seismic surveys, followed by two years for exploratory drilling and three years for moving into commercial production if discoveries are made.
Companies awarded contracts will also be required to provide bank guarantees at different project stages, including $3 million before surveys, $20 million before drilling and another $20 million before commercial production begins.
Under the cost recovery system, companies will be allowed to recover up to 75 per cent of their annual investment costs from oil or gas sales. The remaining profit will be shared between Petrobangla and the contractors.
Petrobangla’s share in shallow-water projects will range from 40 percent to 65 percent, while in deep-sea projects the share will vary between 35 percent and 60 per cent.
The government has also reduced labour welfare obligations for offshore investors, lowering the contribution requirement from 5 per cent to 1.5 percent of profits.
State-owned exploration company BAPEX will receive a mandatory 10 percent stake in shallow-sea projects, though it will not participate in deep-sea blocks.
Petrobangla expects offshore exploration work to begin by the end of 2027 after the completion of bidding and contractual formalities.
An earlier offshore bidding round launched during the interim government period failed to attract final bids, although several companies had initially purchased tender documents.
