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Posco Daewoo to win gas exploration right in Bangladesh deep sea

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Posco Daewoo CEO Kim Young-sang (right) and Petrobangla Chairman Abul Mansur Faizullah (left) are signing a production sharing agreement for the exploration of Bangladesh’s deep sea block 12.

South Korean resource developer Posco Daewoo Corp. is all set to explore gas field in deep sea in Bangladesh in search of a jackpot similar to its discovery in Myanmar in nearby waters. 

Posco Daewoo said Wednesday it inked a production sharing agreement with the Bangladesh government and state-run petroleum company Petrobangla in a project to explore and develop deep-sea natural gas block 12 in southern sea of the country. The company has been fine-tuning details of the contract since it has been selected as preferred negotiator by the Bangladesh government in October last year. 

Posco Daewoo
Map of Bangladesh’s deep sea block 12

Production sharing agreement is a common type of contract in major oil-producing countries including South East Asia, under which the government provides a contractor with the right to explore within a contract area and shares the gas and oil discovered. 

Under the agreement, Posco Daewoo will be given eight years to search the sea and 20 to 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 embark on first-stage exploration in the second quarter and expand upon the findings. 

The deep sea block 12 is located near the Thalin gas exploration well in the block AD-7 of Myanmar where the Korean resource developer succeeded in discovering gas reserve in February last year. Given similar geographical features as the block AD-7, there is a good chance the block 12 of Bangladesh would contain similar gas reserves, according to industry experts. 

Shares of Posco Daewoo ended Wednesday at 23,450 won, down 0.42 percent or 100 won from the previous session

The Original Posted By Moon Ji-woong/Maeil Business Korea