The government has proposed a total allocation of Tk 17,345 crore for the Power, Energy and Mineral Resources Ministry in FY2026-27, including Tk 2,349 crore for the Energy and Mineral Resources Division and Tk 14,996 crore for the power sector excluding subsidies, while stepping up efforts to strengthen energy security through expanded oil and gas exploration, higher domestic production and increased refining capacity.
Finance Minister Amir Khosru Mahmud Chowdhury announced the allocation while presenting the Tk 9.38 lakh crore national budget in Parliament on Thursday. The allocation is slightly higher than the Tk 16,952 crore earmarked for the sector in FY2025-26.
The minister said the government is facing mounting pressure on subsidy expenditure due to instability in global energy markets triggered by the ongoing conflict in the Middle East.
According to preliminary estimates, an additional Tk 42,600 crore may be required in subsidies by June of FY2025-26 for oil, gas, electricity and fertiliser. Of the amount, Tk 10,258 crore may be needed for oil, Tk 11,170 crore for gas, Tk 19,821 crore for electricity and Tk 1,350 crore for fertiliser.
"Recent conflicts in the Middle East, including Iran, and the instability in the global energy market have put additional pressure on the government's subsidy spending," he said.
The finance minister said the government has revised the model Production Sharing Contract (PSC) to attract offshore exploration while safeguarding national interests and has launched a new offshore bidding round for international oil companies.
"We are prioritising exploration and production of natural gas both onshore and offshore and strengthening domestic capacity through Bangladesh Petroleum Exploration and Production Company Limited (BAPEX)," he said.
Under the plan, 270 kilometres of geological surveys, 700 line-kilometres of two-dimensional seismic surveys and 700 square kilometres of three-dimensional seismic surveys will be conducted between FY2025-26 and FY2027-28.
BAPEX plans to drill 69 wells and carry out workover operations on 31 wells using its own drilling rigs. The government also plans to procure two new exploration rigs to strengthen national exploration capacity.
Nine shallow-water blocks and 15 deep-water blocks have been opened for international oil companies under production-sharing agreements.
The minister said the government is reviewing the establishment of an additional LNG terminal at Moheshkhali alongside the two existing floating LNG terminals. An action plan is also being prepared to connect gas from the Bhola region to the national grid.
