ExxonMobil Corporation, one of the world's largest oil and gas companies, has expressed interest in exploring gas in all the open deepwater offshore blocks and some onshore blocks using the required two- and three-dimensional seismic surveys.
The company plans to implement the proposal, including production sharing contracts (PSC) negotiation and well exploration, in three phases over six years.
The proposal comes when Bangladesh is about to finalise its model PSC, under which international oil companies will be offered larger output shares and increased gas prices.
Meanwhile, Bangladesh has also started its much anticipated multi-client survey, which is scheduled to be completed by next May, to acquire data on hydrocarbon reserves in Bangladesh's part of the Bay of Bengal.
Bangladesh Oil, Gas and Mineral Resource Corporation (Petrobangla) Chairman Zanendra Nath Sarker said, "ExxonMobil has placed a primary proposal to negotiate on offshore blocks in deep-sea as well as for some onshore blocks.
"The proposal is now under consideration."
ExxonMobil wants all open blocks both in bay, land
In its proposal, ExxonMobil has expressed interest in direct negotiation for mutually acceptable PSCs covering all open deepwater blocks, data access for evaluation of selected onshore blocks needed for direct negotiation proposal, and participating in the planned tender for the offshore blocks.
It chalked out a timeline in three phases from this year to materialise the plan.
In the first phase, the Texas-based international oil and gas company is also eying to complete PSC negotiation and 2D seismic survey in two years.
Under the second phase, it intends to complete 3D seismic data acquisition, processing and interpretation on high-graded blocks in three years.
In the final phase, it plans to start drilling exploration wells, which will continue for three years.
At present, Bangladesh has 26 open offshore and 22 onshore blocks. Of these, 11 offshore blocks are located in shallow water and the remaining 15 are in deep waters.
Currently, the government has PSC for two shallow sea blocks – blocks SS-04 and SS-09, which ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are jointly exploring.
Of the total onshore blocks, only four are awarded to IOCs. USA oil giant Chevron has been exploring and producing natural gas in three onshore blocks – 12, 13 and 14 – while Singapore's KrisEnergy is active in block-9.
USA giant interested in survey jointly with TGS
Apart from this, ExxonMobil also wished to work directly with Norwegian survey company TGS and US firm Schlumberger. This joint venture is now conducting the multi-client survey in the Bay of Bengal to acquire a denser grid of 2D data during the initial acquisition phase.
Norway and US, joint venture firms, started the survey on 4 January this year and are scheduled to complete it by next May, said engineer Md Shaheenur Islam, director (Production Sharing Contract), Petrobangla.
Regarding ExxonMobil's wish to work with the TGS-led firm, Shaheenur said it depends on the decision of the Energy and Mineral Resource Division.
Stating its competency for the job, ExxonMobil said, "Any hydrocarbon accumulations in the deepwater offshore area in question are most likely to occur in stratigraphic traps, and ExxonMobil has the had the most successful track record in industry of exploring for such traps in the last decade, based on its exploration program in deepwater Guyana."
In contrast, the bulk of the anticipated onshore traps are structural, and ExxonMobil also has extensive experience in such settings, it added.
New PSC offers increased benefits to IOC
Petrobangla has drafted a new model PSC offering a larger output share and increasing the gas price to attract IOCs in the local fields.
As per the existing PSC, the rate of the purchase price of IOC-produced gas is below $3 per thousand cubic feet (Mcf). But in the proposed PSC, the price has been proposed to increase by three times to around $10 per Mcf, reads the draft PSC.
Besides, the government share in the "profit gas" also proposed to drag down to 40-70% from the previous 55-80% from the previous PSC.
Like the existing PSC, the new model PSC also allows the IOCs to export offshore gas after meeting domestic demand.
Regarding the updated PSC, Md Shaheenur Islam said it was now under legal scrutiny to get the final approval.