Category: Energy and Power

Ag ainst the backdrop of a chronic energy crisis, the Bangladesh government, led by the BNP alliance, has launched a new Production Sharing Contract (PSC) bidding round for offshore exploration in the Bay of Bengal.

the initiative is considered a major step toward strengthening the country’s long-term energy security through the discovery and development of offshore petroleum resources.

the updated Model PSC (MPSC) 2026 includes a range of incentives aimed at attracting international oil companies (IOCs) to invest in both shallow and deep-sea blocks. Given continuing volatility in global oil and gas markets, along with growing regional energy demand, the revised terms are expected to encourage participation from major global energy companies. However, the success of the bidding round will largely depend on how effectively the government manages geopolitical sensitivities, ensures transparency and accountability, and guarantees equal treatment for all bidders.

offshore exploration and development typically require six to seven years before production can begin. Some deepwater blocks are located nearly 400 kilometers from the coast, and major discoveries may require subsea pipelines or Floating Lique?ed Natural Gas (FLNG) facilities, potentially extending development timelines to eight to ten years.

even so, successful offshore gas discoveries could become a gamechanger for Bangladesh’s medium-term energy security. Bangladesh secured sovereign rights over a vast maritime area in the Bay of Bengal following international arbitration, gaining control over an offshore region nearly equal in size to its land territory. Geological assessments suggest strong hydrocarbon potential in the offshore basin. Neighboring India and Myanmar have already discovered substantial offshore gas reserves and are bene?ting economically from them. Bangladesh, however, delayed offshore exploration for years due to policy hesitation, overly conservative approaches, and confusion created by sections of civil society lacking a clear understanding of PSC arrangements. Growing geopolitical competition among global powers such as the United States, China, and India in the Bay of Bengal has also added complexity.

understanding Production Sharing Contracts A PSC is essentially an agreement between a state-owned enterprise and an international oil company for the exploration and development of petroleum resources.

ownership of the resources remains with the state.

under the arrangement, IOCs undertake exploration at their own risk and expense.

if commercially viable reserves are discovered, the IOC recovers its investment through a portion of production known as ‘cost petroleum,’ while the remaining ‘pro?t petroleum’ is shared with the stateowned enterprise according to an agreed formula. Pricing mechanisms are a critical component of PSC agreements, with market risks shared between the IOC and the state entity.

therefore, PSCs do not transfer ownership of national resources to foreign companies. Rather, IOCs serve as investors, developers, and operators.

it is worth noting that Chevron currently accounts for nearly 60 percent of Bangladesh’s total gas production from three gas ?elds. Many of the country’s major gas ?elds-including Titas, Habiganj, Bakhrabad, Rashidpur, Bibiyana, Kailashtila, and Sangu-were discovered by international oil companies. Bangladesh has not concluded any major successful onshore PSC agreements since 2000, and several offshore PSC initiatives were also poorly managed. Much of the current gas crisis could have been avoided if exploration efforts had continued through partnerships between IOCs and BAPEX. Key Features of Offshore Bidding Round 2026 Earlier offshore bidding rounds received weak responses due to inadequate ?scal and ?nancial incentives.

the updated MPSC 2026 attempts to address those concerns through more attractive commercial terms.

the bidding round covers all 26 offshore blocks-11 shallow-sea (SS) blocks and 15 deep-sea (DS) blocks. Separate applications are required for each category, although bidders may apply jointly for two adjacent deep-sea blocks under a single contract. Companies may submit bids individually or through consortium arrangements. Separate work programs and bank guarantees must be submitted for each deep-sea block, even under joint applications.

each block will be evaluated independently.

the deadline for bid submission is November 30, 2026. Prequali?cation Requirements For shallow-sea blocks, bidders must demonstrate a minimum production experience of 5,000 barrels of oil per day or 75 million cubic feet of gas per day from at least one offshore acreage. For deep-sea blocks, the requirement rises to 10,000 barrels of oil per day or 100 million cubic feet of gas per day. Bidders must also have at least one international exploration and production experience outside their home country.

the bid package includes an information package, promotional package, and data package.

these provisions are broadly consistent with PSC frameworks used in countries such as India, Myanmar, Thailand, and Vietnam. Previous PSC terms related to gas pricing, third-party sales, export provisions, pipeline tariffs, and bonus structures failed to attract suf?cient IOC interest.

the updated framework offers more ?exible and commercially attractive terms.

the revised provisions on gas pricing, third-party sales, and export rights areexpected to address investor concerns regarding market risks. Bangladeshis should not be overly concerned about export provisions, as domestic gas shortages and rising future demand are likely to absorb most future production within the country. Petrobangla and the Energy and Mineral Resources Division (EMRD) must ensure a transparent and competitive evaluation process that builds investor con?dence.

the pricing of data packages should also be reviewed to encourage broader participation rather than maximize short-term revenue from data sales. Government agencies should proactively engage with foreign missions and international investors. Bangladesh could organize a major roadshow in Dhaka, inviting potential investors and development partners. Diplomatic missions in the United States, the United Kingdom, Australia, France, the Netherlands, Russia, Norway, China, India, Malaysia, Indonesia, Qatar, the UAE, and Saudi Arabia should actively encourage companies from their respective countries to participate. BAPEX could also consider forming partnerships with leading Bangladeshi business groups for joint bidding in offshore blocks, helping develop domestic expertise alongside international operators. Reports suggest that ExxonMobil is particularly interested in all 15 deepwater blocks. Bangladesh has also entered into a long-term energy cooperation framework with the United States.

the government must ensure that the open bidding process remains free from geopolitical complications that could discourage participation from companies based in Russia, China, or elsewhere. Given the Bay of Bengal’s strategic importance, Bangladesh must pursue smart and balanced energy diplomacy. Conclusion Bangladesh should engage intensively with potential investors through proactive and strategic energy diplomacy.

in addition to pre-bid meetings, a well-organized international roadshow should be held in Dhaka, preferably between August and September. Based on investor feedback, minor adjustments to the MPbe considered.

offshore exploration requires multi-billion-dollar risk investments, and investors must feel con?dent about the commercial environment and potential returns. Bangladesh’s past PSC experiences, including the Scimitar and Niko controversies, damaged investor con?dence.

the government must now work proactively with successful bidders to ensure transparent and mutually bene?cial agreements.

offshore gas exploration is critical for Bangladesh’s medium-term energy security.

at the same time, the government should also consider launching a fresh PSC bidding round for onshore exploration areas.

Local garment factories remain far from meeting clean energy consumption targets, held back by high renewable energy costs, limited rooftop space and policy bottlenecks that are slowing adoption across the sector, according to a new study.

the ?ndings come as global buyers tighten sustainability requirements and increase pressure on exporters to cut emissions across supply chains under the EU Corporate Sustainability Due Diligence Directive (CSDDD).

the directive, which came into effect last year, requires garment factories in Bangladesh to generate 35 percent of their power from renewable energy sources by 2035 for smooth Western exports.

on the ground, however, just 3 percent of electricity used by garment factories currently comes from renewable sources, according to the study.

it was prepared by Mapped in Bangladesh (MiB) of the Centre for Entrepreneurship Development (CED) at BRAC University after surveying 878 factories in Gazipur and Narayanganj.

the ?ndings, presented at an event at Sheraton Dhaka yesterday, show that the apparel sector remains heavily dependent on conventional energy despite the 2035 deadline.

The cost of the project to build transmission infrastructure for supplying electricity from the Rooppur Nuclear Power Plant (RNPP) has been reduced by Tk 23.30 billion under a revised proposal after some expensive components were removed from the original design, of?cials said.

the project, titled ‘Development of Transmission Infrastructure for Power Evacuation of Rooppur Nuclear Power Plant’, will now cost Tk 86.52 billion, down from the original estimate of Tk 109.82 billion.

at the same time, the implementation deadline for the project has been extended until June 2026. The Planning Commission has recommended approval of the rst revised proposal at a meeting chaired by Dr Nurun Nahar Chowdhury, member (secretary) of the Industry and Energy Division of the Planning Commission.

according to of?cials, the revised cost represents a 21.22 per cent reduction from the original estimate, resulting in signi?cant savings for the government.

the project is being implemented by Power Grid Bangladesh PLC.

The Japan International Cooperation Agency (JICA) has shown interest in ?nancing the overhaul of two aging units at the Karnaphuli Hydroelectric Power Station, Bangladesh’s only hydropower plant, as the project remained stalled for more than seven years due to procurement complications.

of?cials from the Bangladesh Power Development Board (BPDB) said preparations are underway to develop a detailed project proposal with JICA support for the rehabilitation of Units 4 and 5 at the Kaptaibased power station.

according to plant oficials, the two 50 MW units are currently generating only around 40 MW each because of mechanical deterioration and structural weaknesses, reducing the plant’s overall output by nearly 20 MW.

the units have exceeded their scheduled overhaul periods. Unit 4 was last renovated in 2010, while Unit 5 underwent overhaul in 2011. Engineers said cracks in generator support structures and other mechanical faults have forced operators to carry out regular inspections, welding, and temporary maintenance to keep the units operational

Prime Minister Tarique Rahman recently said Bangladesh is steadily advancing toward clean energy, a green economy, and a self-reliant energy system through expanded use of renewable energy technologies. He made the remarks while addressing the inauguration ceremony of the ‘Renewable Solar Power On-Grid Rooftop’ initiative at the Jatiya Sangsad Bhaban in Dhaka. ‘Today we are inaugurating an initiative that is not only a power generation project, but also a symbol of Bangladesh’s sustainable future,’ the Prime Minister said. Referring to the launch of the onemegawatt rooftop solar power system at the parliament complex, he said the project sends a strong message that Bangladesh is moving steadily toward clean energy, sustainable economic growth, and energy self-reliance.

at the request of the Prime Minister, Speaker of Parliament Major (retd) Ha?z Uddin Ahmad, Bir Bikram, formally inaugurated the rooftop solar initiative

The government has signed contracts with 12 independent power producers (IPPs) to generate 918-MW electricity at an average cost of 7.80 cents (Tk 9.12) per kilowatt-hour, with of?cials saying the amount was roughly 2.5 cents lower than previous such costs. Bangladesh Power Development Board (BPDB) of?cials said that the recent deals were part of an extensive energy mix campaign to maximize renewable energy generation, reducing dependence on traditional and, particularly, on imported fossil fuel sources. ‘The tariff drop of 2 to 3 cents means the average generation cost will fall signi?cantly from earlier average prices that hovered around 10.50 cents per kilowatt-hour,’ said an of?cial. BPDB of?cials said as part of the campaign, the new government annulled a past interim regime decision to scrap earlier adopted six power projects, alongside taking six new projects to get the 918 MW electricity at lower tariffs.

Pr of. Halil Hasar, Director of Climate Change, participated in the 5th Istanbul International Water Forum, held under the theme ‘Strengthening Water Resilience: Innovation to Action.’ Hosted by the Ministry of Agriculture and Forestry, the forum is regarded as one of Trkiye’s leading international platforms on sustainable water governance. The event brought together ministerial delegations, policymakers, and representatives from major international organizations, including the United Nations, OECD, OIC, and the World Bank.

addressing the opening session, Director Hasar emphasized that water has become the most visible and immediate manifestation of the global climate crisis. He noted that COP31, which Trkiye will host this November, represents a historic opportunity to accelerate implementation-oriented climate action. Highlighting the intensifying impacts of climate change, Hasar stated that 2024 has of?cially become the hottest year on record, while disruptions in the hydrological cycle are increasing the frequency and severity of droughts and extreme weather events. Referring to UN ?ndings, he underlinedthat nearly 40 percent of the global population currently lives in waterstressed regions, placing more than 700 million people at severe risk of water scarcity. ‘Water should no longer be viewed solely as a natural resource,’ Hasar said. ‘It must be recognized as a strategic priority for global resilience, security, and sustainable development.

Government exchequer gasps under ?scal-pressure buildup as power-sector subsidy is projected to overshoot its budgetary mark in the current ?scal year (FY)-much of the burden stemming from overrated hiring of private plants.

the government had already disbursed Tk 320 billion during the ?rst nine months (July-March) of FY2025-26, and the amount is likely to reach some Tk 430 billion at the ?scal yearend, Ministry of Finance (MoF) of?cials say. With an estimated Tk 110 billion required to make up the gap for the remaining three months (AprilJune), the total subsidy requirement for the scal comes to nearly Tk 430 billion, says a senior MoF of?cial. Consequently, the nance ministry is nalizing a revised national budget substantially raising the power-sector allocation from its initial cap at Tk 370 billion, they say.

350.org welcomed COP31 PresidentDesignate Murat Kurum’s call to urgently increase the pace of global electri?cation, made at the Copenhagen Climate Ministers’ Meeting recently. Climate campaigners, however, urged governments to heed this call for electri?cation by raising revenues through windfall taxes on fossil fuel pro?ts, accompanied by concrete plans to phase out fossil fuels. Clémence Dubois, 350.org Campaigns Manager, said: ‘There is no doubt that electri?cation is urgently needed and a permanent tax on the fossil fuel industry can bridge the gap between promise and reality. G7 governments are sitting on the answer to the crisis of unaffordable energy. Fossil fuel companies are making their biggest pro?ts yet, while households around the world can’t afford their energy bills.

tax those windfall pro?ts and use revenues to accelerate electri?cation and deliver energy justice.

During this Eid-ul-Azha vacation I spent a couple of days in two separate villages away from the capital city. During my short stays I had had ?rst-hand experiences on how the villagers endure frequent loadshedding caused short supply of power to the Rural Electri?cation Board.

at my Suradia village home in Munshiganj district’s Sreenagar upazila I found electricity going off for hours together amid sweltering Jaishta heat. Whenever it returns it stays not for long, leaving consumers to endure not only sweat but concerns about irrigation pumps and agricultural activities.

the outages cause losses also to poultry farms apart from causing damages to refrigerators whoever owns the cooling appliances. The short vacation also took me and some of my friends to a restaurant close to River Padma in Dohar-Nawabganj area where we found customers and staff members struggling with on-again off-again power outages. We suffered too on a hot and humid day.

though the leave of power here was a bit short the restaurant authorities complained that there had recently been more disruptions in power supply obstructing smooth ?ow of business.

the summer is really going to be dif?cult.

the same is not seen in Dhaka, the capital city and the seat of power. There are discriminations between the capital city and the rural Bangladesh. With peak electricity demand crossing 16,000MW on a typical summer day Bangladesh Power Development Board can supply maximum up to 14,000MW to Power Grid Company Bangladesh for distribution through the six distribution companies, including the REB, which bears the brunt of the short supply.

the mainstream media does not provide space and time the sufferings of the villagers actually deserve.

the media’s coverage in this regard is discriminatory too.

the Dhaka city dwellers are being spared the load-shedding as part of the government’s tactic to keep them silent especially on this subject. Dhaka residents have too many problems to deal with. Rising cost of living, high fuel prices, traf?c chaos and not-so-good law and order are among the perils faced by the capital city residents. But they scream more when electricity goes off rendering refrigerators and fans idle. This is also the city where the rich, elite and the power live.

also the media sits here. So, the subsequent governments have always adopted the policy of keeping the capital city free of loadshedding.

the rural people are left to suffer as they are too weak to protest. They are the voiceless people.

the city people matter more than the villagers. The discrimination has been going on for many years. No doubt, it will go on. But the economic development and the efforts to reduce poverty suffer. When the lack of electricity stops electric irrigation pumps the production of rice and vegetables get the hit.

though declining, the agriculture’s contribution to Bangladesh’s Gross Domestic Product (GDP) is still sizeable.

the sector accounts for over 11% of the GDP, which is currently $510 billion in nominal term. But it provides employment to the country’s up to 40% of the population acting as a backbone of the economy. Bangladesh suffers when its agriculture gets weak.

it has been weakening over the years.

in the early 1970s agriculture accounted for 38% of the GDP.

in FY2425 it declined to 1.79%, the lowest rate of growth recorded in the last 11 years, according to Bangladesh Bureau of Statistics.

this means Bangladesh is lagging behind in its drive for economic recovery amid global fuel prices turmoil. The drive to cut down the rate of poverty is also witnessing setbacks.

everyone everywhere requires electricity.

this is citizens’ rights. Political parties while seeking votes always promise a fair distribution of electricity between rural and urban residents.

in practice, the rural people remain neglected. No government has ever been able to reverse this trend