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The onslaught of Covid-19 and a tax row with the authorities concerned have put on hold the mandatory drilling of Kanchan well by ONGC Videsh Ltd.
Sources said the Indian oil and gas company had a plan to initiate drilling an exploratory well at Kanchan in shallow sea (SS) block-04 last year.
But the spread of coronavirus globally and subsequent lockdown, and restricted movement of personnel and equipment delayed the job.
The drilling equipment that reached before the pandemic in March 2020 requires fresh 'fitness' test before drilling, according to a senior Petrobangla official.
To check fitness, the equipment need to be re-sent to their respective testing centres outside Bangladesh, he said.
The ONGC and its drilling subcontractors are already in a payment spat due to the delays, market insiders said.
Before the onslaught of coronavirus, a dispute over advance income tax and demurrage payment on drilling equipment was delaying drilling the well.
Alongside the partly resolved row, the coronavirus issue emerged as a major obstacle to doing the job, they added.
The ONGC planned to drill the well, buoyed by the findings of 2D (two dimensional) seismic surveys.
It, however, has recently floated tender to pick contractors with intent to drill two exploratory wells in two separate offshore blocks in the Bay of Bengal.
The selected contractors would drill the wells-Titly in SS block-04 and Moitree in SS block-09, a senior energy ministry official told the FE on Monday.
Drilling these wells is also mandatory for the Indian firm within its contract period by February 2023.
Once carried out, it would be the first offshore drilling in the country's sea territory after a span of four years.
Australia's Santos along with the Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) in February 2017 drilled offshore Magnama-02 well under block-16 which was found dry after drilling.
The joint venture had drilled the well to a depth of around 3,200 metres only to find it dry.
The BAPEX counted an estimated $29 million in loss.
Currently, no exploratory activity is being carried out at offshore blocks in the Bay.
The country has no producing offshore gas well now and the entire natural gas output comes from onshore fields as well as from the import of liquefied natural gas.
Any fresh discovery of hydrocarbon in an offshore field will boost the country's future oil and gas reserves.
To do the drill, the ONGC has already completed a portion of geo-hazard survey on the two blocks.
The state-run Petrobangla earlier extended the tenure of its contract with the ONGC by two more years until February 2023 to boost offshore exploration.
The deal was set to expire in February 2021 after an initial two-year's extension.
Petrobangla inked two production-sharing contracts (PSCs) with the ONGC on February 17 in 2014, which expired in February 2019.
The ONGC, the operator of blocks 04 and 09, holds the participating interest of 45 per cent, the Oil India Limited 45 per cent and the BAPEX 10 per cent.
The SS block-04 covers an area of 7,269 square kilometres and SS block-09 an area of 7,026 sq km.
Water depth of both blocks ranges between 20 metres and 200 metres.
As per the deal, the ONGC is committed to conducting 2,700 line-kilometre 2D seismic data acquisition and processing and one exploratory well in SS block-04.
It is also committed to carrying out 2,700 line-kilometre 2D seismic data acquisition and processing and two exploratory wells in SS block-09.
It will be allowed to run and sell oil and gas for 20 years from an oil well and 25 years from a gas well.
The ONGC has already completed around 3,100 line-kilometre 2D seismic surveys for both blocks.