By Ruma Paul

DHAKA, May 24 (Reuters) - Bangladesh launched an international tender on Sunday for oil and gas exploration in 26 offshore blocks in the Bay of Bengal, offering more attractive terms to foreign companies as it seeks to tackle worsening domestic gas shortages and reduce reliance on costly LNG imports.

The South Asian country has faced declining gas reserves and rising dependence on imported liquefied natural gas (LNG) while energy prices remain vulnerable to geopolitical tensions and supply disruptions linked to the Iran war.

State-run Petrobangla published the tender documents on its website under the revised Bangladesh Offshore Model Production Sharing Contract (PSC) 2026, setting November 30 as the deadline for bid submissions.

“We have made the terms more attractive than before to encourage participation from international companies,” Energy Minister Iqbal Hassan Mahmood told a press conference.

“The offshore tender is part of the government’s action plan to increase domestic gas supply and reduce import dependence.”

Under the revised PSC, companies will relinquish only 20% of exploration acreage during the exploration phase, compared with 50% previously. Mandatory contributions to the workers’ welfare fund have also been reduced to 1.5% from 5%.

Officials hope the revised terms will revive investor interest after Bangladesh’s previous offshore licensing round in March 2024 failed to attract a single bid despite several multinational companies purchasing data packages.

DEEP AND SHALLOW WATER BLOCKS ON OFFER IN TENDER

It is offering 15 deep-water and 11 shallow-water blocks in the Bay of Bengal. Petrobangla said a basic information package containing geological and related data would be available from June 1.

The government has also revised the gas pricing formula to improve commercial viability. Deepwater gas prices will now be linked to Brent crude instead of high-sulphur fuel oil, allowing contractors to receive up to 11% of the three-month average Brent price, subject to a floor of $70 per barrel and a ceiling of $100.

A review conducted after the failed 2024 round found that foreign companies had raised concerns over gas pricing, pipeline construction costs and profit-sharing obligations.

Despite resolving maritime boundary disputes with India in 2012 and Myanmar in 2014, Bangladesh has yet to make a major offshore gas discovery. By contrast, neighbouring India, Myanmar and Pakistan have expanded deepwater exploration activities in recent years.

Major international companies including ConocoPhillips COP.N, Santos, POSCO Daewoo and ONGC ONGC.NS have previously explored Bangladeshi offshore blocks before exiting the projects.