Offshore blocks offered in Bangladesh’s Bay of Bengal have attracted a disappointing level of interest from license-holders; however, anticipated improvements to the terms governing the country’s oil and gas industry could entice investors.
According to the company’s latest report*, only one extra bid is thought to have been received for the shallow-water blocks during the extension of Bangladesh’s 2012 bidding round, adding to the three already received. As a result, more attractive fiscal terms are likely to be implemented in upcoming rounds, although the next one is unlikely to commence until 2015.
The fiscal terms for Bangladesh’s deepwater blocks were amended significantly, with a number of new incentives, mid-round in 2013; however, no such improvements were applied to the terms for the shallow-water area, despite increasing demand for natural gas.
Jonathan Lacouture, Lead Analyst for the Asia-Pacific region, cites this lack of incentives as a reason for the low number of bids.
“Bangladesh faces fierce competition from India and Myanmar for exploration investment in the Bay of Bengal,” says the analyst. “Incentives are needed to make the Bangladeshi blocks stand out, especially considering the substantial turnout which Myanmar recently experienced in its own licensing round.”
Indeed, Bangladesh’s upstream oil and gas sector is further clouded by ongoing uncertainty over the status of certain blocks in the shallow-water area. Following a clash with Myanmar over maritime boundaries, a similar dispute with India now remains unresolved, and arbitration on this dispute is not expected until June 2014.
Lacouture continues: “If the ruling on this issue favors India, then it would threaten the integrity of the six offshore blocks on the western edge of the exclusive economic zone, which are currently claimed by Bangladesh. This arbitration means that the next bidding round will probably not happen until 2015 and the delay will only increase authorities’ urgency to attract investors.”
Will Scargill, Fiscal Analyst, suggests that future incentives are most likely to be offered through either a higher-cost recovery limit, or an improved gas-pricing framework.
He says: “Given the level of domestic demand, export provisions are unlikely to be offered. The 2008 model contract permitted exports, and it was precisely for this reason that there was a lot of political opposition to the contract.”
- Historic and forecast data relating to production, consumption, imports, exports and reserves are provided for each industry sub-segment for the period 2000-2020.
- Historical and forecast data and information for all the major gas fields, Liquified Natural Gas (LNG) – Terminals and pipelines in Bangladesh for the period 2005-2017.
- Operator and equity details for major natural gas assets in Bangladesh.
- Key information relating to market regulations, key energy assets and the key companies operating in the Bangladesh’s energy industry.
- Information on the top companies in the Bangladesh including business description, strategic analysis, and financial information.
- Product and brand updates, strategy changes, R&D projects, corporate expansions and contractions and regulatory changes.
- Key mergers and acquisitions, partnerships, private equity and venture capital investments, and IPOs.
Reasons to buy
- Gain a strong understanding of the country’s energy market.
- Facilitate market analysis and forecasting of future industry trends.
- Facilitate decision making on the basis of strong historic and forecast production, reserves and capacity data.
- Assess your competitor’s major natural gas assets and their performance.
- Analyze the latest news and financial deals in the gas sector of each country.
- Develop strategies based on the latest operational, financial, and regulatory events.
- Do deals with an understanding of how competitors are financed, and the mergers and partnerships that have shaped the market.
- Identify and analyze the strengths and weaknesses of the leading companies in the country.
Spanning over 88 pages, 36 tables and 14 figures, “Bangladesh Gas Markets, 2013” report covering Bangladesh Energy Sector; Bangladesh Gas Upstream Investment Environment Benchmarking; Bangladesh Exploration and Production Sector; Bangladesh Pipeline Sector; Bangladesh LNG Sector; Profile of Chevron Corporation; Profile of Bangladesh Oil, Gas and Mineral Corporation; Profile of A.P. Moller – Maersk A/S; Financial Deals Landscape; Recent Developments.
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