DHAKA: Bangladesh will invite foreign firms to explore for offshore oil and gas to meet soaring energy demand to sustain the nation’s fast-growing economy, an official said on Wednesday.

The army-backed government’s cabinet cleared plans late on Tuesday to invite tenders for production-sharing contracts with companies, M Tamim, special aide to government head Fakhruddin Ahmed, said.

“We will invite international tenders by the middle of this month. The oil and gas blocks will be awarded to companies by August,” Tamim said.

It will be the third bidding round in the history of Bangladesh, which has extensive gas reserves, but is facing a shortfall due to soaring consumption.

“A lot of big foreign oil companies have expressed their desire to explore for oil and gas in the resource-rich Bay of Bengal. Neighbouring Myanmar has already discovered huge gas reserve there,” Tamin said.

Bangladesh needs to urgently locate new sources of energy as the government forecasts the nation’s current gas reserves will run out by 2014-15 at present consumption rates.

The government has said the country needs at least $7.7 billion worth of investment in gas exploration and development to sustain projected annual economic growth of seven per cent until 2025.

Bangladesh’s economy has been growing at more than six per cent annually in the last four years, the highest rate of growth since its independence in 1971.

Officials said preparations for the offshore bidding were ready and the country’s territory in the Bay of Bengal has been divided into 28 blocks for the bidding.

“We’ve been waiting for the approval of the proposed production sharing contract. With the approval, we will now make sure the companies can start exploration by next winter,” a senior energy ministry official said, asking to remain unnamed.

British oil company Cairn Energy won the first offshore exploration rights in June 1994. It struck gas in Sangu in the Bay of Bengal in 1997 and started production in 1998.

Exploration has been on hold since the late 1990s because foreign companies did not believe Bangladesh consumption would be sufficiently large to warrant such investment.

But now the economy has picked up steam, there has been a flurry of foreign interest.

Bangladesh has proven recoverable gas reserves of 15 trillion cubic feet from which 7.1 trillion cubic feet have already been extracted from the country’s 23 gas fields, according to official figures.

—AFP