US energy giant Chevron has submitted a comprehensive proposal to Bangladesh for a new framework agreement on gas resource development, seeking fresh investment opportunities, competitive gas pricing and access to new onshore blocks.
A high-level Chevron delegation led by Javier La Rosa, President of Base Assets and Emerging Countries (BAEC), presented the proposal during a courtesy call on Prime Minister Tarique Rahman at his office at the Bangladesh Secretariat.
The proposal, formally submitted by Chevron Bangladesh on 16 July, sets out a roadmap for identifying areas of mutual cooperation and new investment opportunities in Bangladesh’s energy sector. The proposal was subsequently rejected, according to officials.
Chevron Bangladesh’s newly appointed president, Shu Xiong, also attended the meeting at the Bangladesh Secretariat.
The US company made the proposal outside the existing model production-sharing contract (PSC) framework at a time when Bangladesh is facing severe constraints on fuel imports and rising costs to meet the country’s energy demand.
The country is under growing pressure to secure fuel supplies amid increased import costs, with additional expenditure estimated at around $5 billion to meet demand.
The energy situation has also been complicated by disruptions in the Red Sea and wider geopolitical tensions following the US-Iran conflict, including concerns over shipping routes and Houthi attacks and blockades.
According to official sources, the proposed framework is based on four key areas, including investment stability, with Chevron seeking a predictable and secure regulatory environment to support long-term investment.
The company has also proposed competitive gas pricing mechanisms that reflect market conditions while remaining commercially viable for the state, potentially outside the existing PSC arrangements.
Chevron is seeking an extension of the operating life of the Bibiyana gas field, where production has been declining as the field matures.
In addition, the company has sought access to new onshore gas blocks under the proposed framework, potentially paving the way for further exploration and investment.
As part of its proposal, Chevron has also sought to revise its contribution to the Workers’ Participation Fund (WPF) from 5 per cent to 1.5 per cent.
However, a senior government official who attended a meeting on the proposal told Just Energy News that the government had rejected the proposed framework earlier, although it was reviewed again at a meeting on Sunday.
“Chevron has proposed new investment to explore new wells. We will review their proposal,” Petrobangla Chairman Md Abdul Mannan told Just Energy News.
“The government is planning to introduce onshore production-sharing contracts, which are currently under review by the Ministry of Law and Legislative Affairs for vetting,” another government official said.
Just Energy News contacted Chevron officials for comment on the latest development, but they declined to comment.
Prof M Tamim, vice-chancellor of Independent University, Bangladesh, told Just Energy News that the government could consider extending Chevron’s agreement to allow the company to explore and develop new wells, potentially through a low cost tariff arrangement, to help meet the country’s growing energy demand.
Chevron is the major stakeholders to supply output around 900mmcfd against the supply of 1600mmcfd from locally produced gas fields.