- Signing an exploration deal for DS-12 block with the Bangladesh government and state-run gas company Petrobangl
- High chances to discover gas reserves given its geographical features similar to Myanmar’s AD-7 block
POSCO DAEWOO clinched a gas production deal with the Bangladesh government and state-run gas company Petrobangla, which is considered a landmark contract that will help expand the trading company’s presence in the Southeast Asian country.
Under the deal, signed in Tuesday, POSCO DAEWOO will have the right to explore a gas block named DS-12, for up to eight years. If natural gas is found, POSCO DAEWOO, which plans to start exploring in the second half of this year, can produce and sell gas for 25 years.
The signing ceremony was held at Petrobangla’s headquarters with POSCO DAEWOO CEO Kim Young-sang; Tawfiq-e-Elahi Chowdhury, energy adviser to Bangladesh Prime Minister; and Abul Mansur Faizullah, chairman of Petrobangla.
Petrobangla is Bangladesh’s biggest state-run energy company covering the whole gamut of energy and natural resource business including exploration, production, transport and sale.
POSCO DAEWOO was picked as a preferred bidder for the block last October.
A production sharing agreement is a common type of contract in major oil-producing countries under which the government provides a contractor with the right to explore within a contract area and shares the gas and oil discovered.
Posco DAEWOO will be given eight years to search the sea and 20-25 years of drilling upon finding a field.
The company can also opt to phase out should the project prove questionable or unprofitable. The company would begin first-stage exploration in the second quarter and expand upon the findings.