Bangladesh is moving forward with plans to launch its first onshore oil and gas bidding round in nearly three decades, aiming to boost domestic energy production and reduce its growing dependence on imported fuel.
As part of the initiative, state-owned Petrobangla has submitted a draft Model Production Sharing Contract (MPSC) to the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources recently. The proposed framework is currently under review by the government before the bidding process is formally announced.
According to Petrobangla officials, the planned tender will invite international oil and gas companies to explore hydrocarbon resources in both plain-land and hilly regions of the country. The move follows the recent launch of an offshore bidding round and forms part of a broader strategy to strengthen Bangladesh’s energy security.
The government is seeking to increase gas production from domestic fields at a time when output is declining while demand from industries, power plants and other sectors continues to rise. Officials noted that Bangladesh has not conducted an onshore hydrocarbon bidding round since 1997.
To attract foreign investors, the proposed contract offers more competitive terms based on recommendations from international consultancy Wood Mackenzie. Under the draft agreement, gas prices for international operators would be linked to a three-month rolling average of Brent crude oil prices. The proposed rate would be approximately 8 per cent of Brent prices for plain-land blocks and 8.5 per cent for hilly areas.
Based on current crude oil prices, gas from future onshore fields could be sold at more than $7 per MMBtu, significantly higher than existing rates paid to operators. Currently, Chevron receives around $2.76 per MMBtu for gas supplied to Petrobangla, while KrisEnergy receives about $2.31 per MMBtu.
The 1997 bidding round resulted in the award of four blocks to international companies. At present, Chevron operates gas fields under Blocks 12, 13 and 14, while KrisEnergy produces gas from the Bangora field under Block 9.
The planned onshore tender comes shortly after Petrobangla offered 26 offshore exploration blocks in the Bay of Bengal, reflecting the government's renewed focus on expanding domestic energy exploration and attracting foreign investment into the sector.
