Bangladesh opens Bay bidding round for oil, gas exploration

Bangladesh has launched an international bidding round for offshore oil and gas exploration in the Bay of Bengal, aiming to attract foreign investment and strengthen the country’s long-term energy security amid rising domestic demand and dwindling gas reserves.

The government on Sunday formally announced the 'Bangladesh Offshore Bidding Round-2026', offering 26 offshore blocks — including 11 shallow-sea and 15 deep-sea blocks — for exploration by international energy companies.

Speaking at a press briefing at the Secretariat, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood said the government would ensure that all agreements with foreign companies safeguard Bangladesh’s national interests.

“We will move forward with full transparency and ensure that no decision harms the country’s interests,” the minister said. “Any contract signed under the bidding round will be carefully assessed in line with international standards and national priorities.”

The government hopes the new offshore bidding initiative will breathe fresh life into exploration activities in Bangladesh’s maritime territory, where vast hydrocarbon potential still remains largely untapped despite the country securing maritime boundary settlements more than a decade ago.

Officials said no major international offshore bidding round had taken place since the BNP government in the 1990s.

Mahmood said Bangladesh had long failed to make headway in offshore resource exploration despite repeated discussions over the country’s maritime prospects.

“We still do not fully know what resources lie beneath our seabed,” he said. “If oil or gas is discovered and extracted successfully, it could become a game changer for future economic growth.”

The minister also said international investors were showing renewed interest in Bangladesh due to confidence in the country’s elected government and policy continuity.

“We are an elected government with a public mandate, and there is no question over the election,” he said. “Investors see this as a place of confidence, and we have ensured accountability and transparency.”

He added that several major international companies, particularly from the United States and China, had already expressed interest in participating in the bidding process.

The minister also acknowledged that state-owned exploration company BAPEX currently lacks the technical expertise and operational capacity required for deep-sea exploration. As a result, the government is encouraging joint ventures between BAPEX and international oil companies to facilitate technology transfer and skill development.

Officials said the new Production Sharing Contract (PSC)-2026 model was revised after the previous offshore bidding round in 2024 failed to attract bids despite interest from several companies.

Under the updated model, the government has introduced more investor-friendly terms, including 100% cost recovery, gas pricing linked to Brent crude oil, third-party gas sales opportunities and conditional export options.

The PSC framework also allows foreign contractors to receive tariff support for pipeline investments and provides duty-free import facilities for exploration equipment. Petrobangla will bear contractors’ income tax obligations under the agreement.

According to the Energy Division, offshore gas prices for investors will be determined using a percentage of Brent crude prices — 10.5% for shallow-water blocks and 11% for deep-sea blocks — with both floor and ceiling pricing mechanisms included to cushion market volatility risks.

The total exploration period under the new model has been fixed at nine years, including an initial six-year phase followed by an additional three-year extension period.

Officials said the government had also introduced investment protection measures, including stabilisation and expropriation safeguards, to shore up investor confidence.

Under the bidding rules, companies can participate individually or through consortiums. However, operators bidding for shallow-water blocks must have prior production experience of at least 5,000 barrels of oil per day or 75 million cubic feet of gas per day. For deep-sea blocks, the requirement rises to 10,000 barrels of oil or 100 million cubic feet of gas per day.

The deadline for submitting bids has been set for 30 November 2026.