THE GOVERNMENT of Bangladesh, an energy starved country, inked a contract on Thursday with a U.S. energy giant for offshore oil and gas exploration.
Ignoring protests, state-owned PetroBangla signed a production-sharing contract (PSC) with Conoco Phillips, an U.S. corporation for exploration of oil and gas in two deep-sea gas blocks.
Vice-president William Lafferrandre said his corporation, Conoco Phillips, will immediately begin exploration within Bangladesh’s maritime boundary. The agreement is for nine years.
Conoco Phillips is the world’s fifth-largest private sector energy corporation and is one of the six "super major" vertically integrated oil companies.
Controversy has raged with Burma and India over territorial ocean boundaries. The Burmese military junta has sent warships to threaten Bangladesh not to attempt to explore for energy resources within disputed territory in the Bay of Bengal.
Conoco Phillips is barred from exploring nearly half of the two blocks, said a PetroBangla official.
Bangladesh is awaiting judgment from the United Nations Convention on the Law of the Sea (UNCLOS) to settle the claims over the disputed waters.
The country currently produces around 2,000 million cubic feet (mmcft) of gas per day against a demand of more than 2,500 mmcft. The proven gas reserves are 7.3 trillion cubic feet (tcf) and probable reserves 5.5 tcf.
A citizen’s network called the Committee to Protect Oil-Gas and Mineral Resources, with allies drawn from leftist parties, workers, environmentalists and professionals staged a demonstration and clashed with riot police on Tuesday protesting that the contract would hamper national interests.
Prof Anu Mohammad, leader of the citizen’s network argue that the deal with Texas based corporation would lose ownership of the blocks once the contract was signed, which is nearly 150 miles away from the coast. It which would be suicidal for the nation, observed the economic professor of a state university.
Senior government officials, however, said that Conoco Phillips will not be allowed to export gas unless the country refuses to buy its gas under the contract.
Professional and academics claim the U.S. corporation will have the authority to export 80 percent of the gas, and PetroBangla will acquire the rest, which will have to be carried to the shore at its own cost, a costly proposition for Bangladesh.
PetroBangla chairman Hossain Mansur explained to website bdnews24.com on Wednesday that there is nothing against the country's interests in the contract.
The controversy further deepened after whistleblower site Wikileaks revealed that U.S. Ambassador John F. Moriarty in 2010 pressured the Bangladesh prime minister's energy advisor to award the contracts to Conoco Phillips, Halliburton and another American company.
Saleem Samad, an Ashoka Fellow is an award winning investigative journalist based in Bangladesh. He specializes in Jihad, forced migration, good governance and politics. He has recently returned from exile after living in Canada for six years. He could be reached at email@example.com