The government is set to launch a new offshore oil and gas bidding round soon, with more attractive terms for international oil companies (IOCs) after last year’s unsuccessful effort, officials confirmed.

Petrobangla is finalising a draft of the model production sharing contract (MPSC), which may include the government bearing corporate tax responsibilities and further hikes in gas tariffs, said Md Soyeb, director for PSC at the state-run agency. The draft will be sent to the Energy and Mineral Resources Division for approval before the round opens.

Despite keeping last year’s tender open for nine months, no IOCs submitted bids, though several had purchased bidding documents. Industry insiders cited inadequate seismic data and low investor confidence as key reasons for the lack of interest.

In 2024, Bangladesh offered 24 offshore blocks—15 deep-sea and nine shallow-water—under terms pegging gas prices to Brent crude, at 10% of the global oil benchmark. The formula left prices uncapped, meaning Petrobangla would have to buy gas at market highs. IOCs were also allowed to export gas after domestic demand was met, repatriate profits fully, and transfer stakes.

Over the past decade, only one deep-water block—DS-12—was awarded, to South Korea’s Posco-Daewoo in 2017, but the company exited in 2020 after limited exploration. Currently, four IOCs remain engaged in shallow-water exploration under PSCs.

Officials say the revised terms aim to boost IOC participation and reduce dependence on expensive LNG imports amid rising domestic demand.