The much-awaited international tender was finally floated this week for oil and gas exploration in a total of 24 blocks, with 15 located in deep waters and nine in shallow waters in the Bay of Bengal. Interested companies will have the opportunity to participate in the tender over the next six months. Some 55 companies, including US multinationals ExxonMobil, Chevron, ConocoPhillips, and China's Sinopec, have been invited to take part in the tender - however, any company from any country in the world has the opportunity to participate in it as the tender is open.

According to PretroBangla, the last tender for offshore oil and gas exploration was called in 2016. A new model Production Sharing Contract (PSC) was signed in 2019 but no bidding was called. After nearly four years, the cabinet gave final approval to another new model PSC last July. Bangladesh has a total of 26 blocks in the Bay of Bengal. Currently, India's state-owned Oil and Natural Gas Corporation (ONGC) is working in two blocks in the shallow waters, where the depth is up to 200 metres.

The new model PSC has certainly attracted the attention of many oil giants, including Chevron and ExxonMobil. They have already held several meetings with Bangladesh, as we have reported before. According to the 2019 PSC, the price at which the government would buy the recovered gas was fixed at $7.25 (per 1,000 cubic feet) for deep waters and $5.5 for shallow waters. However, the new PSC does not fix the price. Instead, the price of gas has been fixed at 10% of the price of Brent crude oil - the most traded of all the oil benchmarks in the world.

If the benchmark price increases or decreases in the world market, the price of gas will also increase or decrease proportionally. The formula for profit-sharing between multinational companies acting as contractors and Petrobangla has been changed this time. Previously, the two sides used to share profits after deducting investment and operating expenses.

Based on the amount of gas recovered, Petrobangla used to receive 55-80% of the profit. If production increased, Petrobangla's profit share would also increase. However, this time, the total revenue earned from the gas field will be shared. Petrobangla will receive 35-65% of the revenues. Although it is left open, Bangladesh would be hoping to rope in one of the US oil giants for the deep sea blocks in particular, which present challenges that lesser companies may not be able to overcome. Just last month, ExxonMobil officials were in Dhaka ahead of the tender being floated, clearly reflecting real interest in partnering with the government.

The government must ensure clarity in negotiations so that large multinational companies do not get the scope to exploit the country's natural resources in any way, nor leave the projects unfinished. They must move forward with the conviction that what we have at issue here is a win-win situation for everyone, and the opportunity that has come up must be taken.