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India oil company close to securing 3 gas blocks in Bangladesh

08th August 2013

ONGC Videsh will be awarded the shallow gas blocks in Bangladesh as the sole bidders

shallow gas oil platform
ONGC Videsh were the sole bidders for shallow gas blocks

An Indian oil company is close to being awarded three gas blocks in Bangladesh.

 

India’s ONGC Videsh will be awarded gas blocks SS-04 and SS-09 by the Bangladesh Petroleum Exploration and Production Company, who will also have a 10 per cent stake in all three blocks.

 

ONGC Videsh were the sole bidders with other global nations backed out after the pre-bidding stage, citing lack of incentives to cover the offshore investments.

 

ONGC, on the other hand, are adamant that they will use their experience of exploring eastern and north eastern Indian gas fields. The area of the three blocks ranges from 4,463-7,692 sq km.

 

The deal between ONGC and the BPEPC includes ONGC’s right to explore Bangladesh’s first discovered offshore gas field in Kutubdia in the Southwest of the country. This was included under a ‘special package’, tagged withSS-04 in the bidding process.

 

Discovered in 1977, the block has recoverable reserves of around 45.5 billion cubic feet according to Bangladesh state-owned oil and gas company Petrobangla’s estimates.

 

The Tripura chief minister Manik Sarkar has said this proposal will lead to more than 100MW of power for Bangladesh.

 

The deal now has to go through the Bangladesh government to get approved before the contract can officially be signed. If it does get approved, the deal is not likely to be signed before September, but an initial agreement may be done in August.

 

Bangladesh, first striking oil in May 2012, has grown as a frontier nation for prospective BRIC countries. Chinese company CNOOC were in talks to buy UK company Tullow Oil’s stake in Bangladesh, potentially expanding into the nation, but nothing came from those talks.

 

In China, the ministry of land and resources have implemented tax breaks to encourage national and international companies to boost development of oil and gas in the country. China’s energy consumption is more than Russia, India, Germany and Japan combined.