Dhaka, Bangladesh (BBN)- The Joint Venture (JV) of US oil company ConocoPhillips and Norway's Statoil have been awarded the contract for oil and gas exploration in three deep-sea blocks in the Bay of Bengal.
Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave nod to the proposal of the ConocoPhillips and Norway's Statoil Joint Venture (JV).
Besides, the Cabinet Committee on Government Purchase (CCGP) approved the proposals for the appointment of consultants to construct two coal-based power plants in Cox's Bazar,Mustafizur Rahman,Joint-Secretary of Cabinet Division, told reporters after the meetings.
Both the CCGP and CCEA meetings were presided over by Finance Minister A M A Muhith at Cabinet Division.
Energy Division last week accepted a proposal of the state-owned Petrobangla to award all three deep sea blocks (DS-12, DS-16 and DS-21) to the ConocoPhillips and Norway's Statoil JV.
The Petrobangla invited international bidding in 2012 for the deep sea blocks. ConocoPhillips tied up with Norwegian Statoil to form a joint venture (JV) company-named "ConocoPhillips Asia Pacific New Venture and Statoil ASA" and submitted bids for the three gas blocks. They inked production sharing contract (PSC) under Bangladesh Off-shore bidding round 2012.
In its bids, the US-Norwegian JV has offered drilling of one mandatory well in each deep sea block besides conducting a 872-775 line kilometer 2D seismic survey for each block in its eight years of exploration.
About the coal-based power plants, Rahman said that STEAG Energy Services Limited of India was appointed as the consultant by the CCGP for Taka 20.50 crore for constructing two coal-based power plants at Maheshkhali in Cox's Bazar.
He said the CCGP also gave nod to two procurement proposals of Local Government Division under two packages involving Taka 66.29 crore. EPTISA Services of Spain along with its two local agents K S Consultant Limited and BCL Access Limited won the work.
Rahman said a revised financial proposal of Clean Air and Sustainable Environment Project was approved by the CCGP involving BDT 2.181 million. The actual cost of the project was BDT 1.762 million. MinConsult of Malaysia and its local partner Modern Engineers has been implementing the project.
As per new terms of condition of the production sharing contract (PSC), the price of gas has been fixed at US$6.5 per 1000 cubic feet (MCF) and the price will annually be increased by 2 percent. It means, Petrobangla will buy the company's shared gas at this price which was earlier $5.5 per MCF.
The company will be allowed to sell 50 percent of its cost recovery and profit gas to any local company at a negotiated price without any permission from the state-owned Petrobangla.
The company does not need to pay any corporate tax. Rather, Petrobangla will pay corporate tax on its behalf.
The company will also get the opportunity to use Petrobangla's gas pipeline without paying the existing 4.0 per cent
BBN/SSR/AD-18Feb15-10:56 pm (BST)