The recent proposal from ExxonMobil, the world’s second-largest energy company, to explore oil and gas in the deep sea areas of the Bay of Bengal is a major opportunity for Bangladesh to positively tackle the energy shortage caused by both local and international crises.

Energy experts have said the US supermajor’s proposal has much potential considering various strategic aspects, in line with the country’s attempts to reduce the ongoing energy crisis and high fuel import pressure while securing a future to maintain fuel-hungry industrial developed countries’ demand by 2041.

They said that even after winning two maritime boundary disputes more than a decade ago, no good energy exploration company has shown interest in properly exploring the Bay of Bengal.

Under such circumstances, ExxonMobil’s experience and expertise can unlock good potential in the undiscovered blue economy, they added.

Petrobangla officials have also said that Bangladesh should not miss this offer due to the same reasons. The proposal has been verified and sent to the Ministry of Power, Energy and Mineral Resources. It’s now being reviewed at the highest levels of the government.

Sources at Energy and Mineral Resources Division (EMRD) and Petrobangla said the government is considering the proposal cautiously, bearing in mind the ongoing global geopolitical situation and the importance of the Bay of Bengal.

A senior EMRD official, requesting anonymity, told The Business Post that although ExxonMobil’s proposal is a big opportunity, it will be difficult to make a quick decision due to geopolitical sensitivity.

A meeting, chaired by Finance Minister AHM Mustafa Kamal, on this issue was held at the secretariat on March 30. State Minister for Power, Energy and Mineral Resources Nasrul Hamid, EMRD Secretary Md Khairuzzaman Mozumder and other senior officials were present. But sources could not say anything about the meeting’s outcome.

“ExxonMobil is the best among the world’s seven largest energy exploration companies that transformed poor Arab countries in the 1960s,” said Prof Badrul Imam of the Geology Department at Dhaka University.

“Therefore, in any aspect, ExxonMobil’s proposal is a great opportunity for Bangladesh,” the energy expert added.

Md Maqbul-E-Elahi Chowdhury, a former member of the Bangladesh Energy Regulatory Commission, said ExxonMobil’s proposal is positive but no deal should be made without an international tender.

Because, in the past, US companies Chevron and ConocoPhillips had come in as well but left without completing the explorations, he added.

Doubts over merit of bidding round
Petrobangla has been floating international tenders for oil and gas exploration for a long time and there are different types of Production Sharing Contracts (PSC) for offshore and onshore areas.

According to the Model PSC-2019, the gas price in the deep sea is $7.25 per MMBTU. All investments are made by respective companies.

Petrobangla has revised the PSC several times and called for international bids to attract international oil companies (IOCs) to explore offshore oil and gas after winning the maritime boundary disputes with Myanmar and India in 2012 and 2014, respectively.

But no major companies showed interest in hydrocarbon exploration in the Bay of Bengal. As a result, the government gave some blocks to various companies without any bidding. Almost all the companies, including ConocoPhillips, left midway in 2014.

Although several benefits, including tax exemption and making the gas price $10 per MMBTU, were offered to the companies coming to explore oil and gas, the initiative remained fruitless.

Currently, the revised PSC is in Prime Minister Sheikh Hasina’s office. Petrobangla General Manager (Contract) Shahnewaz Parvez said that it will be final if the cabinet approves it by May.

Petrobangla officials say there is no possibility of an agreement even if an international bid is floated this year as it is an election year. Seeking anonymity, a senior official said it’s unlikely that efficient companies will show interest now even if they float a tender.

The official told TFP that some companies from India, Singapore or South Korea may participate in the bidding but they are low-skilled.

On the other hand, ExxonMobil, the top exploration company in the world, has offered to explore the deep sea in the Bay of Bengal. This is a huge opportunity and it should not be squandered, the official added.

The prime minister’s Power, Energy and Mineral Resources Affairs Adviser Tawfiq-e-Elahi Chowdhury said they approached ExxonMobil several times a few years ago but it did not show any interest.

“But now it’s suddenly showing interest. The reason for this is being scrutinised and if it turns out to be a win-win situation for both parties, the deal could be signed within this year,” he said.