Bangladesh has extended the deadline for submitting bids for offshore oil and gas exploration and development to 31 March 2027, giving international energy companies additional time to assess investment opportunities in the country’s maritime areas. The previous deadline was 30 November, Petrobangla has announced.
The extension follows discussions with several established international oil companies (IOCs) and requests from potential participants. Petrobangla expects that improved access to exploration data packages will encourage more companies to take part in the latest bidding round.
The international tender was launched on 24 May for exploration and extraction across 26 offshore blocks, comprising 15 in deep water and 11 in shallow water. The price of the tender documents has been set at US$7,000. According to engineer Md Shoaeb, companies can submit bids for individual blocks or make proposals covering the entire offshore area.
Three companies have already purchased tender documents, including the Turkish Petroleum Corporation (TPAO) and China National Offshore Oil Corporation (CNOOC). Purchasing tender documents does not necessarily mean that a company will submit a bid, however. The level of participation will become clearer once the submission deadline has passed.
Lessons from the previous bidding round
Bangladesh’s previous offshore bidding round was launched in March 2024. Seven internationally recognised companies, including US energy giant ExxonMobil, purchased tender documents, while two companies also acquired exploration data from Petrobangla. Despite this initial interest, the companies refrained from submitting bids amid political uncertainty and other concerns. The 2024 bidding round was subsequently declared unsuccessful and abandoned.
The interim government later formed a committee to examine the reasons for the failure. Following the committee’s recommendations, several contractual and financial terms were revised in an effort to make offshore exploration more attractive to international investors.
One of the changes concerns the cost of transporting gas from deep-water areas to the mainland through pipelines. The wellhead price premium factor (WPPF), previously set at 5 per cent, was reduced to 1.5 per cent, according to the information provided.
The pricing formula for gas was also revised. Under the updated terms, the price linked to Brent crude was increased from 10 per cent to 11 per cent for deep-water blocks and set at 10.5 per cent for shallow-water blocks. Under the Model Production Sharing Contract (PSC) 2019, the fixed gas prices were US$5.60 and US$7.25 for shallow- and deep-water areas respectively. The revised arrangements are intended to improve the commercial appeal of exploration projects, although companies will also consider geological risks, development costs and the time required to bring any discoveries into production.
A large maritime area with untapped potential
Bangladesh’s maritime boundaries with Myanmar and India were settled through international legal proceedings in 2012 and 2014 respectively. These decisions clarified the country’s maritime rights and opened up a substantial area for offshore exploration. The source material puts the area under Bangladesh’s maritime jurisdiction at more than 118,813 square kilometres.
Despite this extensive maritime area, exploration has not progressed at the pace hoped for by policymakers and energy-sector observers. Successive governments have faced difficulties in attracting sustained investment and translating the country’s offshore potential into commercial discoveries.
Myanmar has been extracting natural gas from its offshore fields for years. Its activity in the wider Bay of Bengal has contributed to interest in the geological prospects of neighbouring waters, but it does not by itself establish the size or commercial viability of Bangladesh’s potential reserves. Exploration, appraisal and detailed geological studies would be needed to confirm whether significant quantities of recoverable gas are present.
Bangladesh has previously secured offshore exploration agreements with international companies. In 2008, contracts were signed with US company ConocoPhillips for blocks DS-10 and DS-11. The company later sought changes to several terms, including the price of gas. After the requested revisions were not accepted, it withdrew in 2014.
Under the 2012 offshore bidding round, India’s ONGC Videsh Limited signed agreements for blocks SS-4 and SS-9. These earlier arrangements illustrate the challenges involved in sustaining international investment, particularly when companies and the government differ over commercial terms.
Declining domestic output increases pressure
The renewed effort to attract offshore investment comes as Bangladesh faces pressure from falling production at domestic gas fields and rising demand. According to the supplied figures, daily gas production, which once reached around 2,800 million cubic feet, has fallen to approximately 1,620 million cubic feet.
The figures underline the importance of maintaining existing fields while pursuing new discoveries. Natural gas is essential for electricity generation, industrial production, fertiliser manufacturing and other economic activities. When domestic supplies decline, meeting demand becomes more difficult and reliance on imported energy can increase exposure to international price movements and foreign-exchange pressures.
Offshore exploration, particularly in deep water, requires substantial investment, specialised equipment, advanced technology and detailed geological data. International companies assess not only the potential size of reserves but also the contractual terms, operating risks, infrastructure costs and expected returns before committing funds.
Extending the deadline to 31 March 2027 gives prospective bidders more time to review data, assess individual blocks and prepare commercial proposals. Whether the revised terms and additional time will attract a larger group of investors remains to be seen.
The outcome of this bidding round could have important implications for Bangladesh’s long-term energy planning. A successful exploration programme would not guarantee immediate supplies, as discoveries must be evaluated and developed before production can begin. However, stronger participation in the bidding process could mark a step towards reducing the long-standing gap between the country’s offshore potential and its actual exploration activity.
