US giant ConocoPhillips wants privilege from Bangladesh

Financial Express Tuesday July 24 2012

The US oil company ConocoPhillips has expressed willingness to expand its gas exploration activities in Bangladesh and requested the government to give it preference in the next round of international bidding for offshore gas blocks, reports BSS.

“ConocoPhillips officials have conveyed me about their claim of preference in the next round of gas block bidding.. they want to expand their operation in the country,” Finance Minister Abul Mall Abdul Muhith told journalists after the meeting with the US oil major officials.

Vice-president of ConocoPhillips William Lafferrandre and Managing Director Thomas J Earley joined the meeting with the finance minister.

The two top officials of ConocoPhillips declined to make any comment about the topic of the meeting.

US oil giant seeks preference in future bidding

Mr Muhith said the two officials have conveyed him that ConocoPhillips should get preference in the next round of gas block bidding. “They have come just to convey it,” he added.

Replying to a question, the finance minister said the US oil company has expressed its willingness to work in the areas where they were not allowed to work earlier due to disputes with neighbouring Myanmar. But after Bangladesh’s victor over maritime disputes, Bangladesh got those areas where they want to work now, he added.

The US oil company made its claim of preference when the government is planning to float international bidding for some gas blocks that it obtained following the solution to disputes over maritime boundary with Myanmar.

ConocoPhillips was awarded two blocks-Block 10 and 11 in the offshore gas block bidding in 2008 although it obtained a total of eight blocks. The government cancelled the bidding for six blocks due to disputes over maritime boundary with Myanmar and India.

About the development of the two blocks, Mr Muhith said the US oil company informed him that it has already completed the seismic survey in the two offshore blocks in the Bay of Bengal and it will get the survey report in September.



Whistleblower WikiLeaks, according to a report published on Dec 2010 in London-based The Guardian, revealed that US ambassador John F Moriarty was pressuring prime minister’s energy advisor Tawfiq-e-Elahi Chowdhury for awarding ConocoPhillips and two other US firms the contracts they were trying for.

The cables revealed that Moriarty held talks with Chowdhury in July 2009 and asked him to approve leasing the gas blocks to ConocoPhillips and also allowing it to export gas.

“These US companies have been given advantages as per his directives,” said The Guardian report quoting Moriarty.

ConocoPhillips was given the green signal soon after.]]]


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No one trusts ConocoPhillips

Aminur Rahman Rasel

Dhaka, June 16 (—Discounting howls of protests, the government is all set to sign the country’s first deep-sea gas and oil exploration deal with US firm ConocoPhillips, allowing it to export gas.

The deal is slated to be inked at Petrocentre in the city’s Karwan Bazar on Thursday noon.

The Houston, Texas-based oil giant won blocks 10 and 11 in 2008 in the second-round bidding for the production sharing contract (PSC), but could not sign the PSC with state-run Bangladesh Oil, Gas and Mineral Corporation, or Petrobangla, as parts of these blocks were also claimed by India and Myanmar.

It will invest about $111 million and has offered a bank guarantee worth the same amount for the twin blocks.

The cabinet in 2009 approved signing of the agreement, which apparently seems heavily tilted in favour of the US firm, and a suicide note for Bangladesh – a country in the jaws of a severe gas crisis, which is sure to spell slowdown in industrialisation and cause immense trouble to the households.

The final go-ahead for inking the PSC was given on May 23 by the cabinet committee on economic affairs.

The country is divided into 52 blocks, 28 of which are in the Bay.

Petrobangla chairman Hossain Monsur, however, told on Wednesday that some people were misinterpreting the deal.

“There is nothing against the country’s interests in the PSC,” he claimed.

The country currently produces around 2,000 million cubic feet (mmcft) gas per day against a demand of over 2,500 mmcft. The proven gas reserves are 7.3 trillion cubic feet (tcf) and probable reserves 5.5 tcf.

The National Committee on Protection of Oil, Gas and Mineral Resources, Power and Ports, comprising academicians, students, professionals and media activists, has been holding a series of demonstrations to protest the proposed deal.

Several left parties and experts are also against the deal, saying Bangladesh would lose ownership of the blocks once the contract was signed.

The citizens’ platform demands that the government strengthen its own relevant institutions, so as to explore the twin precious commodities–gas and oil–on its own by sub-contracting the job to foreign companies, which the US firm would eventually do.

Experts say ConocoPhillips will have the authority to export 80 percent of gas, and Petrobangla will get the rest, which will have to be carried to the shore at its own cost — not an economically viable proposition for Bangladesh, in any case.

Mansur, however, said, “First they’ll sell the gas to the government and if it fails to buy, they’ll sell to private firms.

“When they too decline, only then will (the firm) be able to export the gas as Liquefied natural gas (LNG).”

“According to the PSC,” he said, “The firm will have to sell 20 percent of the LNG to Bangladesh.”

However, contrary to the Petrobangla chairman’s contention, Bangladesh University of Engineering and Technology (BUET) professor M Nurul Islam and the National Committee member secretary Anu Muhammad termed the deal ‘suicidal’.

Ruling Awami League’s ally Workers Party president Rashed Khan Menon in parliament declared the proposed PSC ‘a tragedy’ for the country.

The BUET teacher told on Wednesday, “We’ll be given the gas at a place nearly 150 miles away from the coast. The foreign firm is not obliged to carry the gas [for us].”

“Finally, they’ll be given the opportunity to export the gas as it will not be financially and technically profitable for Bangladesh to carry the gas,” he added.

Prof Anu Muhammad on Tuesday said Bangladesh Petroleum Exploration and Production Company (Bapex) and Petrobangla could be toned up with necessary investment, machinery and manpower for the job ConocoPhillips would do.

“It’ll allow Bangladesh to produce gas at a relatively lower price than buying from foreign companies,” he said.

Menon in parliament on Monday urged the government to not to sign the deal, and to discuss the issue in parliament first.

“This is a tragedy that on the one hand, the government is planning to import LNG, and on the other, allowing export of gas,” he stated.

National Committee convenor Sheikh Mohammad Shahidullah said the government was handing over the country’s sovereignty “without a war”.

Besides economic sovereignty, he observed, the country’s political sovereignty would also be at stake. “Prime minister Sheikh Hasina will sign the final agreement to prove herself a follower of capitalism.”

The government on May 16 inked a deal with a multinational venture Santos-Halliburton, who are now working in the offshore Sangu gas field in block 16 after Cairns left it to them.

According to the agreement, the firm will be allowed to sell gas to third parties at higher prices, meaning they can export.