Seven global oil and gas companies purchased tender documents for gas exploration in the Bay of Bengal, but none submitted the papers within the deadline that ended today.

The document submission deadline was September 9, and with a three months' extension it finally ended on December 9, but none came up with the documents within that schedule.

Petrobangla Chairman Zanendra Nath Sarker confirmed the matter to The Daily Star.

At the same time, two other companies also showed interest to participate in the tender, as they purchased the seismic survey data, a set of information which indicates gas and oil exploration potential of any specific area, he said.

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‘Domestic gas exploration is the most economical option’

Gas exploration in the Bay of Bengal was a long-discussed topic during the Awami League tenure as the Hasina administration has always neglected exploration, rather it focused on the import of high-cost liquified natural gas.

On March 10 this year, Petrobangla floated the offshore bidding tender, inviting international oil companies to explore Bangladesh's maritime area -- the first major initiative to exploit the natural resources from the sea after maritime border disputes were settled with India in 2012 and with Myanmar in 2014.

The tender process was opened for nine out of the 11 blocks of the shallow sea and all 15 deep sea blocks.

Only foreign companies with experience in offshore daily production of at least 15,000 barrels of oil or 150 million cubic feet of gas a day (mmcfd) was allowed to participate in the tender.

The model 'production sharing contract' (PSC) attached with the new tender was made more attractive than the previous contracts, allowing international companies earn more share of profit than the previous initiatives.

This time, the gas price—which earlier used to remain fixed—was set at 10 percent of the present price of Brent Crude, an international benchmark for oil prices.

The other attractive features of the tender include full repatriation of profit, no signature bonus or royalty and determination of oil price based on the fair market value prevailing in the South and South East Asia.

In 2019, Petrobangla had finalised a PSC but did not float the tender then, showing a lack of interest of global companies in the process.

This time, before floating the tender notice, the government had conducted a two-dimensional multi-client seismic survey, the absence of which was also blamed for the lack of interest of foreign companies in such offshore exploration.

Prof Badrul Imam, a renowned geologist, was surprised after hearing the news.

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What to make of Petrobangla’s new oil and gas exploration tender?

"I don't know if there was any weakness in our campaigning or if there is any lacking in promotional packages or in the advertising process," he said, adding that the Bay of Bengal is a textbook example of having huge gas resources.

The Petrobangla chairman said the state-owned energy company needs to know why the companies purchased the tender documents but did not submit those.

Petrobangla needs to sit with the companies in official and unofficial discussions, he said.

"We will find out the loopholes in the process, discuss those with the government high-ups and then re-evaluate the tender documents."