In a major push to strengthen the country's long-term energy security, state-owned Petrobangla is set to offer 26 offshore blocks to international oil companies (IOCs) for hydrocarbon exploration in Bangladesh's exclusive economic zone on Sunday.
The bidding round includes 11 shallow sea blocks and 15 deep sea blocks under the Bangladesh Offshore Model Production Sharing Contract (MPSC) 2026, marking the country's most significant offshore exploration initiative in years.
Officials say the move comes as Bangladesh seeks to reduce dependence on costly fuel imports and revive offshore exploration activities that have remained largely stagnant for nearly two decades despite the settlement of maritime boundaries.
"Bangladesh has not carried out meaningful offshore exploration for the past 17 years despite securing maritime boundary settlements," Adviser for Power, Energy and Mineral Resources Iqbal Hasan Mahmood told the Daily Observer.
He noted that the last major offshore initiative was undertaken in 1991 under the BNP government led by former Prime Minister Khaleda Zia, which later enabled ongoing gas production by Chevron.
"The government is prioritising energy security through expanded exploration, structural reforms in the power sector and diversification into renewable energy sources," he added.
According to Petrobangla, the shallow sea blocks include SS-01 to SS-11, while the deep sea blocks cover DS-08 to DS-22.
Under the bidding framework, companies may apply individually or through joint ventures for one or more blocks. Contracts will be signed under the MPSC 2026 framework.
To attract foreign investors, the government has offered a range of incentives, including full repatriation of profits, exemption from signature bonus and royalty payments, 100 per cent cost recovery with a yearly cap of 75 per cent and attractive gas pricing linked to international Brent crude prices.
Contractors will also receive duty exemptions on imported machinery and equipment used in petroleum operations, while Petrobangla will bear corporate income tax liabilities.
The model contract additionally allows contractors to sell their share of natural gas in the domestic market to third parties, subject to Petrobangla's right of first refusal. Petrobangla said bidders must have prior offshore operational experience and minimum daily production capacity to qualify. For shallow sea blocks, companies must operate acreage producing at least 5,000 barrels of oil or 75 MMSCF of gas daily. The requirement for deep sea blocks is 10,000 barrels of oil or 100 MMSCF of gas per day.
The bidding package includes geological data, seismic information and legal documents related to offshore operations. Interested firms can purchase the information package from June 1, 2026.
Bids must be submitted by November 30, 2026, to Petrobangla's Production Sharing Contract division. Energy sector experts say successful offshore discoveries could significantly improve Bangladesh's energy outlook at a time when domestic gas reserves are declining and LNG import costs remain high.
