Chevron offers new energy plan

US energy giant Chevron has proposed new investment to explore and develop gas wells in Bangladesh to increase production, while seeking government intervention to review the existing gas pricing mechanism in line with global energy market conditions.

Energy Division sources said Chevron wants a framework that would provide investment stability and a predictable and secure regulatory environment to support its long-term operations in Bangladesh.

The company has also proposed a competitive gas pricing mechanism that reflects market conditions while remaining commercially viable for the state, potentially outside the existing production-sharing contract (PSC) arrangements.

Chevron is seeking an extension of the operating life of the Bibiyana gas field, where production has been declining as the field matures. It has also proposed revising its contribution to the Workers’ Participation Fund (WPF) from 5 per cent to 1.5 per cent.

In addition, the company has sought access to new onshore gas blocks under the proposed framework, potentially paving the way for further exploration and investment.

On July 16, Chevron Bangladesh submitted a roadmap to Petrobangla identifying areas of mutual cooperation and new investment opportunities in the country's energy sector outside the existing PSC framework.

On Sunday, a high-level Chevron delegation led by Javier La Rosa, president of Base Assets and Emerging Countries (BAEC), presented the proposal to Prime Minister Tarique Rahman during a courtesy call at his office at the Bangladesh Secretariat. Chevron Bangladesh's newly appointed president, Shu Xiong, also attended the meeting.

Chevron submitted the proposal at a time when Bangladesh is facing severe constraints in meeting its gas demand amid rising fuel import costs. The company is currently a major contributor to the country's domestic gas supply, producing around 900 million cubic feet per day (mmcfd) against total domestic production of around 1,600 mmcfd.

According to an Energy Division official, the government is planning to prepare onshore production-sharing contracts, which are currently under review by the Ministry of Law and Legislative Affairs for vetting. Discussions on the issue are also continuing at the Law Ministry, the official said.

Former energy adviser to the caretaker government Prof M Tamim said the government could consider extending Chevron's agreement to allow the company to explore and develop new wells, potentially through a low-cost tariff arrangement, to help meet the country's growing energy demand.

Bangladesh is under growing pressure to secure fuel supplies amid higher import costs, with additional expenditure estimated at around $5 billion to meet demand. The situation has also been complicated by disruptions in the Red Sea and wider geopolitical tensions following the US-Iran conflict, including concerns over shipping routes and Houthi attacks and blockades.