3rd July 2020
EP Report

South Korean oil and gas exploration firm Posco International might lose its contract for the maiden deep sea exploration job in Bangladesh due to its 'failure' to meet the contractual obligation.

 

The state-run Petrobangla has recommended terminating the production sharing contract, or PSC, with the Posco for exploration of deep sea block DS-12 and sought a final decision from the energy ministry before annulling the deal, said a senior Petrobangla official.

 

Instead of carrying out exploration work as per the contract, the Korean firm had sought a review of the 'commercial terms' seeking a favorable cost recovery provision of the PSC, he said.

 

It also sought an extension of the contract for another year with higher 'commercial terms', but Petrobangla refused to amend the PSC.

 

Market insiders said the Korean firm previously intended to explore the deep sea block through hooking up with a partner so as to minimize the costs.

 

It also talked with Australian Santos to establish a joint venture to this end. But Santos turned down the proposal as the Australian firm itself was planning to pull out of its Bangladesh operations with regard to the shallow water blocks.


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