Conoco bid for eight Bangladesh blocks hits roadblock

Vol 12, PW 14 (27 Nov 08) People & Policy

Conoco Phillips could face a long wait in Bangladesh.

In our last issue we revealed how eight offshore exploration blocks were about to fall into Conoco’s lap following a selection process tainted by allegations that the US ambassador in Dhaka lobbied on behalf of the US explorer with the country’s interim government. But we now hear Conoco might have to wait before it can get these blocks – if it gets them.

On October 18 the office of chief adviser Fakhruddin Ahmed returned the â€کfile’ containing the recommendations favouring Conoco and Ireland’s Tullow Oil - which will get one block - to the country’s energy ministry. Well-placed sources in Dhaka tell PETROWATCH that Ahmed wants the law ministry to clear the â€کfile’ before he grants his formal approval.

“Once we getthe law ministry's opinion,â€‌ confirms a source, “We will ask the Council of Advisers again for final approval.â€‌ Government officialsstress there's no problem with the bidding companies, or the documents submitted.

Even finance adviser Mirza Azizul Islam, who heads the advisors committee on purchases,has asked the power and energy departments to approve the awards after he found them “in order.â€‌ But Fakhruddin Ahmed’s hesitation in approving the awards stems from threats by a powerful coalition of trade unions who warn of legal action against the interim Bangladeshi rulers if they award the exploration blocks to Conoco or Tullow.

Some unions go further, saying the interim governmenthas no authority to award oil and gas blocks, especially to foreign companies. Others believe that the interim government is stalling for time so that the decision will be left to an elected government.

Under the Bangladesh Constitution the interim government has no authority to sign such deals. In April, a proposal to award the Phulbari coal mine to UK-based Asia Energy was scrapped following similar opposition from left wing trade unions and intellectuals.