Bangladesh government-owned PetroBangla in March floated a tender inviting bids for the exploration of 24 offshore blocks, including 15 deep-sea and nine shallow-sea blocks. Bids are to be submitted by 9 September.
“A consortium of OVL and Oil India, which already has operations in Bangladesh, is likely to bid in the tender currently open for offshore blocks in the country,” said a person aware of the developments.
An executive with one of these two oil companies said the blocks on offer have to be evaluated before a final decision is made. “The bids need to be submitted by September, so there is considerable time for a concrete decision on this.”
Russia’s invasion of Ukraine and the resultant energy market volatility have left Indian oil-producing companies scouting for long-term contracts and stakes in assets across regions to reduce dependence on a few nations.
India imports about 85% of its annual energy requirements. In 2023-24, India imported 232.5 million tonnes of crude.
ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corp. Ltd, and Oil India are already involved in the exploration of two blocks in Bangladesh.
The two companies did not reply to queries on their plans for bidding in the new blocks on offer.
All boxes ticked
PetroBangla’s tender document seeking bids for the offshore hydrocarbon blocks specifies that the bidders must have daily offshore production of at least 15,000 barrels of oil, or 150 mmscf (million standard cubic feet) of gas, as an operator to quality. In the case of a consortium, at least one of the entities must meet that requirement.
PetroBangla added that the bidders must be involved in the exploration and production of at least one global oil and gas project.
ONGC Videsh qualifies on both terms.
In 2023-24, OVL’s oil production stood at 7.178 million tonnes, as per its annual results. That translates to about 52.61 million barrels, or about 144,150 barrels per day.
Besides, as of 2022-23, ONGC Videsh had investments worth $20.86 billion in 13 oil-and-gas-producing assets across the globe, including in Russia, Vietnam, Venezuela, Colombia, and Abu Dhabi, per its annual report. It had another $487.57 million worth of cumulative investments in 14 exploratory assets across Colombia, Brazil, Libya, Iraq, Vietnam, Bangladesh and Myanmar.
Oil India’s overseas exploration and production portfolio as on 31 March, 2023 was spread across seven countries—four producing assets in Russia and Venezuela, two discovered and development assets in Mozambique and Nigeria, and four exploratory assets in Libya, Gabon, and Bangladesh.
In 2023-24, Oil India produced 3.359 million tonnes of oil, which translates to about 24.62 million barrels, or 67,456 barrels per day. Its production last financial year was 5.76% higher than in 2022-23.
Bangladesh’s depleting reserves
Along with Oil India, ONGC Videsh is involved in the exploration of two blocks in Bangladesh.
Block SS-09 was awarded to a consortium of OVL and Oil India in 2012. The Bangladesh government, PetroBangla, and a consortium of ONGC Videsh, Oil India and Bangladesh Petroleum Exploration and Production Co. Ltd (Bapex) signed a production-sharing contract on 17 February 2014.
ONGC Videsh is the operator of the block with a 45% participatory interest, while Oil India and Bapex hold 45% and 10% participatory interest, respectively.
Similarly, ONGC Videsh is the operator in Bangladesh’s Block SS-04, with a 45% participatory interest.
Bangladesh has oil reserves of about 82 million barrels. The country’s move to offer 24 offshore blocks comes amid expectations that its gas reserves will be depleted by 2033 if no new major discoveries are made.
On 16 July, Bangladesh daily The Daily Star cited data from PetroBangla that of the country’s original reserve of 28 trillion cubic feet (Tcf) of natural gas, about 18 Tcf of gas had been consumed, leaving on 10 Tcf of natural gas.
PetroBangla estimates another 1 Tcf of gas in the possible reserve category.