Bangladesh Oman energy cooperation: Diversification of the domain of energy for Bangladesh

On 14 March 2023, Abdul Ghaffar Albulushi, the ambassador of Oman to Bangladesh, paid a courtesy visit to the prime minister at Gono Bhaban. The PM requested Oman to increase its commerce with Bangladesh, improve its energy cooperation, hire more skilled workers and import agricultural products from Bangladesh at the meeting. She specifically requested that the Gulf nation double Bangladesh's annual LNG supply from the current 1.5 million tons. 

On the other hand, Ambassador Abdul Ghaffar Albulushi asked the Prime Minister to speed up the government-to-government system for the supply of refined petroleum products from Oman. He claimed that Bangladesh Petroleum Corporation has previously received a request letter in this regard from Oman National Oil Company. 

A visit like this and the warmth in it opens up many doors to strengthen cooperation in the energy domain of Bangladesh. This will also help to diversify the energy sector of Bangladesh and boost the energy export of Oman as well.

In 2018, according to Reuters, Bangladesh finalised a 10-year agreement to purchase 1 million tonnes of liquefied natural gas (LNG) per year from Oman Trading International. Following a previous arrangement with Qatari manufacturer RasGas, which has subsequently merged with sister business Qatargas, to fill the country's deficiency in domestic natural gas, Bangladesh now has a second LNG import agreement with Oman Trading. Before that, A Memorandum of Understanding (MoU) for the import of LNG (liquefied natural gas) was signed by Bangladesh and Oman in 2017.

Oman is ranked fifth in MENA, second in the GCC, and 38th overall in the RISE report. The UAE is placed 33rd overall in the GCC with a score of 81, followed by Oman (78), Saudi Arabia (73), Qatar (70), Bahrain (63) and Kuwait (56). On the flip side, amidst the Ukraine war, the world is experiencing a crisis in the energy domain. Bangladesh is trying to diversify its import of energy since there are obstacles to importing energy goods from certain states. The Bangladesh government hence tries to find newer sources of energy. Against such a backdrop, the meeting will support the growing cooperation in the energy sector between the two countries. 

Bangladesh and Oman's energy partnership is anticipated to have a wide range of effects on both countries as well as the larger South Asian energy market. As the globe struggles to meet its increasing energy demands, energy cooperation is positioned to significantly improve Bangladesh's energy security. As a result, it made its energy sources a primary goal. Bangladesh has a reliable option in Oman's large oil and gas reserves to lessen its reliance on some other sources. A reliable and constant supply of energy is anticipated to be provided to Bangladesh via the previously signed MoUs for the delivery of liquefied natural gas (LNG). 

In addition, it is envisaged that Bangladesh and Oman's energy cooperation will promote the growth and development of both countries' economies. It is predicted that the collaboration and investment made by the two nations in each other's energy sectors will promote technological improvements, job opportunities, and economic growth. Future partnerships between the two countries in a variety of industries will be made possible by this alliance.

The expanded South Asian energy sector is expected to benefit from the energy cooperation as well. The agreement between Bangladesh and Oman offers an alternative energy source and encourages the development of a more varied mix as the region suffers an increase in energy demand. This diversification will boost the region's energy security and promote long-term, sustainable economic growth.

The collaboration between Bangladesh and Oman is anticipated to make it easier for the two nations to share knowledge and skills, resulting in technological improvements in the energy industry. This might lead to the creation of ground-breaking energy production, transmission and storage systems that would be beneficial to both nations as well as the larger South Asian energy market.

The bilateral ties between Bangladesh and Oman could be strengthened as a result of the energy cooperation. The two nations can promote more trust, understanding and collaboration by cooperating on a project that benefits both of them. This may encourage more cross-sector cooperation and promote social, cultural and business interactions.

Both Bangladesh and Oman may benefit from foreign investment brought about by the energy collaboration. It is anticipated that if the two nations work together and invest in one another's energy industries, this will spark more interest from other nations and businesses. This can promote economic expansion and development, foster job growth, and raise citizens' standards of living.

As a result, collaboration may result in some functional adjustments in the energy industry. This can be seen as a testament to Bangladesh's strong and practical leadership, which has made the nation energy-sufficient.

Syed Raiyan Amir Research Associate The KRF Center for Bangladesh and Global Affairs (CBGA).

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.