Bangladesh will invite international bids next Sunday for offshore oil and gas exploration in the Bay of Bengal, a top official has confirmed to Just Energy News today.
“We are taking all necessary preparations to invite international bids for offshore oil and gas exploration in the Bay of Bengal next Sunday,” said Mohammad Saiful Islam, secretary of the Energy and Mineral Resources Division.
Speaking to Just Energy News, Islam said the Energy Division and state-owned Petrobangla had already completed preparations for the bidding round.
He said the latest tender package had been made “more attractive” than previous rounds in an effort to draw greater interest from international energy companies. Measures include revised gas tariffs, reduced costs for pipeline construction and lower prices for geological and technical data.
“Our goal is to attract maximum participation from foreign companies in the international bidding process,” Islam said. “As part of the offshore tender campaign, initiatives have been taken to organise roadshows and send letters to foreign embassies to communicate with potential international oil company bidders.”
He added that the government was hopeful the revised terms and promotional efforts would generate a stronger response from investors this time.
According to the energy secretary, US energy giants ExxonMobil and Chevron have already expressed interest in participating in the bidding round.
A senior Petrobangla official said several international oil companies were showing renewed interest in offshore exploration as fresh investment in some Middle Eastern energy projects has slowed amid tensions involving Israel, Iran and the United States.
“So, we are hopeful about the prospects,” the official said, requesting anonymity.
The Cabinet Committee on Economic Affairs recently approved in principle a revised production sharing contract (PSC) aimed at attracting international oil companies to offshore blocks in the Bay of Bengal.
Bangladesh is facing mounting pressure from rising liquefied natural gas (LNG) imports, higher global fuel prices and growing concerns over long-term energy security amid geopolitical instability.
Officials said the government plans to offer 26 offshore exploration blocks under significantly revised fiscal and contractual terms designed to address concerns that undermined previous bidding rounds.
The energy secretary said the revised terms were intended to resolve longstanding issues raised by foreign companies over pricing, cost recovery and operational flexibility.
“We have reviewed the earlier production sharing contract and introduced a pricing structure that will be adjusted within upper and lower ceilings every five years,” he said.
Under the revised model, companies will be allowed to relinquish only 20 per cent of awarded acreage during the exploration phase, compared with the previous requirement of 50 per cent. The government has also reduced the contribution to the workers’ welfare fund from 5 per cent of profits to 1.5 per cent.
Pipeline tariffs — another contentious issue in earlier negotiations — will now be settled through direct negotiations with successful bidders, while full recovery of infrastructure investment costs will remain available.
Bangladesh has also revised its gas pricing formula in an effort to make offshore projects commercially viable. Gas prices will now be linked to Brent crude oil instead of high-sulphur fuel oil.
Under the new formula, deep-water gas production will receive 11 per cent of the three-month average Brent price, based on a floor price of $70 and a ceiling of $100 per barrel. Shallow-water production will receive 10.5 per cent, while onshore gas pricing will range between 8 and 8.5 per cent depending on location.
The changes replace a 2023 pricing structure that offered a flat 10 per cent of Brent prices but failed to attract bids despite several companies purchasing tender documents.
The revised framework also replaces the London Interbank Offered Rate (LIBOR) with the Secured Overnight Financing Rate (SOFR), bringing the contract structure closer to international financial standards.
Officials said the reforms were prepared following recommendations from consultancy Wood Mackenzie and reviewed by the Law Ministry.
The offshore bidding initiative comes as Bangladesh struggles with soaring energy subsidy costs linked to volatile LNG markets and supply disruptions.
Officials estimate the country’s energy subsidy bill could exceed Tk19,000 crore during the current fiscal year, driven partly by higher LNG prices in the international market.
According to Petrobangla, subsidy calculations were initially based on LNG prices of around $20 per million British thermal units (MMBtu), although spot prices have already climbed above $25 per MMBtu. Before recent market volatility, prices were closer to $10 per MMBtu.
In parliament, State Minister for Energy and Mineral Resources recently said Bangladesh’s recoverable natural gas reserves stood at 29.74 trillion cubic feet (TCF), of which 22.11 TCF had already been extracted by the end of 2025. Remaining reserves are estimated at 7.63 TCF.
Officials also confirmed that a separate onshore bidding round is being prepared and is currently under legal review.