The state-run Petrobangla has extended the tenure of contract with India's oil and gas exploration company -- ONGC Videsh Ltd -- by two more years until February 2023.
The deal with the Indian firm was set to expire in February 2021 after an initial two-year extension.
Earlier, the Petrobangla signed two production sharing contracts (PSCs) with ONGC, the operator of blocks SS-04 and SS-09, on February 17, 2014, which was set to expire in February 2019.
India's ONGC Videsh Ltd, however, has planned afresh to initiate drilling of an offshore exploratory well in the coming winter to delineate natural gas reserve in shallow sea block SS-04.
The company is now bringing in necessary manpower to carry out the exploration, said a senior Petrobangla official.
Drilling a well in Block SS-04 by the Indian firm is mandatory as per the PSC between the consortium comprising the ONGC and the Oil India Limited (OIL), and the state-run Petrobangla and the government.
The ONGC will also have to drill another well in the shallow water Block SS-09. The company planned to initiate drilling of an exploratory well at Kanchan in Block SS-04 last year.
Sources said the ONGC planned to drill the well, buoyed by the findings of two dimensional (2D) seismic surveys.
The deadly coronavirus onslaught as well as a row over advance income tax (AIT) and demurrage charges to port delayed its drilling plan.
Currently, no exploration activities are being carried out in the offshore blocks inside the country's territorial areas in the Bay of Bengal.
There is also no producing offshore gas well in the country, and the entire natural gas output comes from the onshore gas fields as well as through import of liquefied natural gas (LNG).
Any fresh discovery of hydrocarbon in an offshore field will boost future oil and gas reserve.
The country's overall natural gas output is currently around 3,078 million cubic feet per day (mmcfd), of which 632 mmcfd is re-gasified LNG and the remaining 2,446 mmcfd is local gas, according to Petrobangla data as of October 25.
The ONGC is the operator of blocks SS-04 and SS-09, having participating interest of 45 per cent. The OIL holds 45 per cent participating interest, and the Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) holds the remaining 10 per cent interest.
The Block SS-04 covers an area of 7,269 sq-km, while the Block SS-09 stretches an area of 7,026 sq-km. Water depth of both the blocks ranges between 20 and 200 metres.
As per the PSC, the ONGC is committed to conducting 2,700 line-kilometre 2D seismic data acquisition and processing and drilling one exploratory well in Block SS-04, and 2,700 line-kilometre 2D seismic data acquisition and processing and two exploratory wells in Block SS-09.
The ONGC will be allowed to operate and sell oil and gas for 20 years from an oil field and for 25 years from a gas field. The firm has already completed around 3,100 line-kilometre 2D seismic surveys for both the blocks.