Bangladesh Plans Higher Gas Tariff to Woo International Players

Bangladesh has planned to offer higher tariffs to international oil companies (IOCs) for hydrocarbon to be extracted from the shallow-water gas blocks in the Bay of Bengal under the next bidding round.

The government is mulling an increased tariff rate for the next bidding round to woo a good number of IOCs to take part in the planned bidding and explore the country's untapped hydrocarbon potentials in the Bay, Financial Express Bangladesh reported Thursday.

Gas price for the IOCs might be around $5.0 per unit (1,000 cubic feet) under the context of existing international energy prices.

Currently Santos operated shallow water Sangu gas field is the lone operating offshore gas field in the country.

Sangu is now producing around 9.0 million cubic feet per day (mmcfd), which is only 4.0 per cent of the field's peak output of around 220 mmcfd in 2006 when UK's Shell was its operator.

Contribution of offshore gas field is now less than 1.0 per cent of the country's overall gas output of around 2,060 mmcfd.

The government has moved to launch a new bidding round for exploration of about eight shallow-water oil and gas blocks in the Bay of Bengal by April this year.