Bangladesh's offshore exploration has stalled as foreign companies avoid participating in tenders

Exploration activities for fuel, oil, and gas in the Bay of Bengal have faced significant delays due to international companies failing to submit bids despite tenders being issued. Petrobangla officials have yet to provide a clear timeline for the resumption of these activities. Although Bangladesh resolved its maritime boundary disputes with India and Myanmar a decade ago, offshore exploration has been largely stagnant. In contrast, both India and Myanmar have continued their exploration efforts at a faster pace. For instance, Myanmar made a major gas discovery in 2016 in the Thalin-1 block, estimated to contain 4.5 trillion cubic feet of gas, while India has been actively exploring the Krishna-Godavari Basin in the Bay of Bengal.

Currently, 23 out of 26 blocks in Bangladesh’s maritime boundary remain inactive. Despite gaining access to significant areas of the Bay of Bengal after the settlement of maritime disputes—resolved with India in 2012 and Myanmar in 2014—Bangladesh's offshore exploration has not progressed. The energy department confirmed that Bangladesh secured 111,631 square km of the Bay, along with an additional 19,467 square km from India, dividing these into 26 blocks, including 15 deep-sea and 11 shallow-sea areas.

However, only three blocks are operational. ONGC, an Indian company, is exploring two shallow blocks, while the majority of the blocks remain unused. Gas extraction in Bangladesh has been limited to the Sangu gas field, which was discovered in 1996 and ceased production in 2013 due to resource depletion. There have been no significant new discoveries since. ONGC has explored the SS-4 and SS-9 blocks in the Bay but has not yet identified substantial reserves of oil and gas. Recently, ONGC requested an additional two years to continue its exploration in these blocks.

Despite initial interest from four companies, three have abandoned their efforts. International companies have consistently failed to respond to tenders. Tenders issued in 2016 saw no interest, and even though Petrobangla signed a new Production Sharing Contract (PSC) in 2019, no tenders were issued for several years. In 2023, Petrobangla introduced a new PSC model to attract international firms. However, despite inviting 55 global companies in March 2024, no submissions were received by the September deadline. The deadline was extended to December 2024, but again, no tenders were submitted.

In response to this lack of interest, an investigation committee has been formed to explore the reasons behind the absence of submissions. The committee will examine whether the current PSC model or other factors are deterring companies from participating in offshore exploration in Bangladesh.

Petrobangla officials have acknowledged the issue, with Md Altaf Hossain, Director (Administration) at Petrobangla, stating that they cannot provide a timeline for when exploration will resume. He added that the investigation committee’s report will be forwarded to the relevant ministry for a decision. Power and Energy Adviser Muhammad Fauzul Kabir Khan also commented that Petrobangla has reached out to foreign companies to understand the reasons behind their lack of participation and is awaiting their responses.

This ongoing lack of international participation continues to delay Bangladesh's progress in offshore exploration, leaving the country trailing behind its neighbors in tapping into the energy resources of the Bay of Bengal.