The government plans to float international tenders for onshore and offshore exploration blocks, aiming to boost domestic gas production and slash costly imports of liquefied natural gas. It intends to offer 47 blocks in total: 21 onshore and 26 in the Bay of Bengal.
The move is a priority in the administration’s 180-day work plan, according to sources in the Energy and Mineral Resources Division. Energy Secretary Mohammad Saiful Islam told Bonik Barta that preparation for the tender round, covering both land and sea areas, had been completed and would be included in the new government’s initial 180-day programme.
Preparation for the tender round is already advanced. State-run Petrobangla will invite international oil companies to explore the blocks under a revised production-sharing contract (PSC). The exploration and distribution corporation Petrobangla has pushed ahead with its planning and will start the tender process immediately once it receives cabinet approval.
“Petrobangla is ready to invite international tenders for onshore and offshore blocks,” Md Shoaib, the company’s PSC director, told Bonik Barta. “The government’s 180-day plan has prioritised onshore and offshore gas exploration. We’re now waiting for final approval to start the process immediately.”
After taking office on February 18, the newly elected government received a five-year plan from EMRD. The plan set a 100-day target for finalising a model production-sharing contract for oil and gas exploration in onshore and offshore blocks, a goal the division has now met with the completion of the Model PSC 2026. It also proposed launching a bidding round in the 2026–27 fiscal year. Other objectives included completing seismic data acquisition — a 500 line-kilometre 2D survey, a 3D survey in the Charfesson area of Bhola, and surveys of the Lalabazar, Goainghat, Kailashtilla South and Fenchuganj West structures in the Sylhet region onshore.
Preparatory work for the tender was finalised in February before the national election, following scrutiny of the draft Offshore Model PSC 2026 by the law ministry. The ministry raised several queries on both the offshore and onshore provisions. Petrobangla has since supplied the requested information.
The newly elected BNP-led government had been in power for just 11 days when war erupted in the Middle East. The conflict has sent global energy prices soaring. Oil has crossed $100 a barrel, while LNG is trading near $16.50 per million British thermal units on the Japan–Korea Market. Bangladesh’s most recent spot purchase of LNG was at $21 per MMBtu. If the Middle East crisis persists, securing oil and gas from international markets will become increasingly difficult and expensive.
Petrobangla data show domestic gas production has fallen sharply each year. In February and March 2020, local wells supplied nearly 2,700 million cubic feet per day. By yesterday, that had dropped to 1,701 million cubic feet. The significant decline over the past six years has forced Bangladesh to rely on costly LNG imports to meet the resulting shortfall. Total national demand now stands at about 4,200 million cubic feet per day. With LNG included, supply to the national grid yesterday was only 2,543 million cubic feet. The substantial deficit has created gas shortages across all sectors — industry, residential and power generation.
The ousted Awami League government opened a bidding round for offshore exploration in March 2024 with the final deadline set for nine months later. Despite seven companies purchasing the tender documents, not a single one submitted a bid then. The AL government fell on August 5, 2024 and was replaced by an interim administration.
Officials at Petrobangla said at the time that despite considerable foreign interest in Bangladesh’s offshore blocks, the political upheaval deterred participation. Multinational companies, however, cited different reasons. In April last year, two of them told Bonik Barta that the production-sharing contract (PSC) drafted by Petrobangla for the offshore round lacked terms attractive enough to draw global players. They also claimed that the corporation’s own data and modelling did not suggest the presence of substantial oil and gas reserves within the country’s maritime territory.
Petrobangla subsequently examined why international firms had shunned the tender. The now dissolved interim government also placed renewed emphasis on launching a new offshore exploration round during its 18-month tenure, but made little visible progress.
The changes to the new model PSC are geared towards rebuilding investor confidence. Key reforms include a revised gas-pricing mechanism, cost recovery for pipelines, adjustments to work programme commitments, and a reduced contribution to the workers’ welfare fund.
Under the new terms, gas prices will be benchmarked against Brent crude oil, replacing the previous link to the high-sulphur fuel oil index. For deep-water blocks, the price will be set at 11 percent of the three-month average Brent price, within a band of $70 to $100 a barrel. The rate for shallow-water blocks is fixed at 10.5 percent. Onshore, the rate is 8 percent for plains areas and 8.5 percent for hilly terrain. The contract also proposes introducing a negotiable tariff for pipeline use. The mandatory contribution to the workers’ welfare fund has been cut to 1.5 percent from 5 percent. Petrobangla officials confirmed that blocks in the Chittagong Hill Tracts will not be included in the upcoming tender round.
Badrul Imam, a geologist and energy expert, described the government’s plan to invite bids for onshore and offshore exploration as a groundbreaking initiative. “If international companies carry out extensive exploration under this process, there’s a strong chance of discovering significant gas reserves,” he told Bonik Barta. “Finding major new deposits would reduce Bangladesh’s dependence on expensive LNG imports. The push for exploration would also feature prominently in the government’s 180-day work plan for the energy sector.”