US lobbies hard for Conoco in Bangladesh E&P round

Vol 12, PW 12 (30 Oct 08) People & Policy
     

US oil major ConocoPhillips will become a significant player in the Bangladesh hydrocarbon exploration sector when authorities in Dhaka announce sometime next week the results of bids for nine offshore blocks.

PETROWATCH learns Conoco will win eight blocks while the remaining one will go to Ireland’s Tullow Oil. But senior sources in Bangladesh allege Conoco’s sweep is the result of intense lobbying by the US embassy in Dhaka and not on the merit of its bids.

Senior officials at state-owned Petrobangla say US Ambassador James Moriarty leaned heavily on Bangladesh interim government chief advisor Fakhruddin Ahmed and army chief General Moeen U. Ahmed in favour of Conoco.

"You know who calls the shots in our country," a Petrobangla source said, referring to the army. "We have submitted our selection report to the Bangladesh energy and mineral resources ministry and the final announcement will be made next month." In February, Bangladesh invited bids for nine offshore blocks in the Bay of Bengal, which it shares with neighbour India.

Seven companies bid, among them ConocoPhillips, Santos (from Australia), CNOOC (from China), Tullow Oil, and Korea National Oil Corporation (from South Korea). Sources in Dhaka say ambassador Moriarty ensured the lion’s share went to ConocoPhillips and the Chinese got nothing.

So, we hear, Conoco is set to get blocks 10, 11, 12, 15, 16, 17, 20 and 21 while Tullow will get shallow water block 5. A source said the selection process was driven by considerations other than merit, noting that Santos was the highest bidder at $852m in three PSCs covering six blocks; ConocoPhillips came second with investment plans of $442.63m in a total four PSCs to cover eight blocks; Chinese-US JV Longwoods Resources offered to invest $170m in three blocks; CNOOC proposed to invest $115m in one shallow water block; Tullow bid to invest $50m in one block; and, Korean National Oil Corporation offered a $2.5m bank guarantee and a work programme of 1000-km 2D seismic for one block, but with no investment numbers.