Neighbours encroach on blocks offered under 3rd round bidding

of the 12 blocks India has encroached on five Bangladesh offshore gas blocks, while Myanmar on seven blocks in the prospective Bay of Bengal.

By M Azizur Rahman

The prospect of a dispute over offshore gas blocks in the Bay of Bengal is looming large as neighbouring India and Myanmar have encroached on almost half of the Bangladesh's blocks, said sources.( The Financial Express)

UK-based prestigious firm Wood Mackenzie reveals recently that 12 out of 28 gas blocks to oil companies offered under the latest offshore bidding round have been wholly or partly licensed by neighbouring countries.

"One shallow water block and eleven deepwater blocks have been wholly or partly licensed by other countries,"

Wood Mackenzie categorically said in its findings.

It said of the 12 blocks India has encroached on five Bangladesh offshore gas blocks, while Myanmar on seven blocks in the prospective Bay of Bengal.

Bangladesh in February last offered a total of 28 blocks for oil exploration, eight are located in the shallow-depth of the Bay called A-type, while the rest 20 B-Type blocks are located in the deep-water.

The sale of bidding documents and their submission is set to end May 7 next.

Wood Mackenzie in its findings stated that to the west, part of Bangladesh block SS-08-05 was licensed by India (as block NEC-DWN-2004/2) to Santos in 2007.

The Indian block overlaps Bangladeshi third round blocks -- SS-08-09 and SS-08-14.

Further south, another Santos block, NEC-DWN-2004/1, overlaps Bangladeshi blocks -- DS-08-14, DS-08-19 and DS-08-24.

"In the east, seven Bangladeshi deep-water blocks have been wholly or partly licensed by Myanmar," Wood Mackenzie revealed.

Blocks DS-08-22, DS-08-23, DS-08-27 and DS-08-28 all overlap Myanmar's block AD-9, which is operated by ONGC.

Further north, Myanmar's AD-8 block (CNPC) covers the Bangladeshi blocks -- DS-08-18 and part of DS-08-17 and DS-08-13.

Furthermore, block AD-7, which was licensed by Myanmar to Daewoo, overlaps part of block DS-08-13.

"Beyond the blocks with explicit uncertainty over jurisdiction, there are others where no claim of ownership have yet been made, but could be expected in the future," the findings of the UK-based consulting firm noted.

When contacted special aide to chief adviser M Tamim said: "I have heard of the Wood Mackenzie survey. But it would not create any problem for Bangladesh to offer the country's prospective gas blocks to the international oil and gas companies (IOCs)."

"The IOCs are not worried over it as the issue is more or less known to all," the Special Assistant to Chief Adviser on Energy issues said.

In any case, the IOCs would not face any problem over the issue, as the respective neighbouring countries would settle any such dispute through mutual understanding, he assured.

The United Nations Convention on the Law of the Sea (UNCLOS) provision is there to resolve such dispute among the neighbouring countries, he added.

"Bangladesh will explore oil and gas within its territorial waters. It will in no way encroach into others' territory." Tamim assured.

He also said that dispute among the neighbouring countries over the hydrocarbon blocks is not new in the world.

The countries like Vietnam, China and Thailand have similar disputes and the global oil and gas giants are working in these blocks to explore hydrocarbon.

Russia and Japan have similar disputes over the right of oil and gas blocks, Tamim said.

Besides, in the model production-sharing contract of Bangladesh there is a provision for unitization of gas blocks through discussion between the relevant parties if a structure extends into neighbouring territory, he added.