Dhaka (Platts)--21Nov2012/410 am EST/910 GMT

Bangladesh is formulating a joint venture policy for oil and gas exploration in the country involving international oil companies, Petrobangla Chairman Hussain Monsur said Wednesday.

He said under the policy the country's sole oil and gas exploration company, state-owned Bangladesh Petroleum Exploration and Production Company Ltd, or Bapex, would carry out exploration jointly with international oil companies.

A high-powered committee comprising energy experts has been formed to finalize the policy, Monsur said. No time frame has been set for the policy to be finalized.

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Once the policy is adopted it would open up new avenues to develop the country's energy sector, Bapex Managing Director Mortuza Ahmad Faruque said.

The policy would also help speed up the implementation of a JV project between Bapex and Chinese consortium Sinopec Shengli Overseas to develop four state-owned onshore gas fields under block 22 in the Chittagong region, Faruque said.

The Chinese firm has already wrapped up talks to develop the fields under a 70:30 joint venture with Bapex. The four fields -- Kotia, Joldi, Kafalong and Shitapara -- span 13,900 sq km of the Chittagong Hill Tracts region.

Sinopec has agreed to fund the exploration and drilling program, with Bapex to receive 30% of the output, or the sales revenue it generates, without any upfront investment, Faruque said.

Meanwhile, Bapex plans to enter a JV with an IOC to take part in the country's forthcoming offshore bidding round slated for later this month.

"We plan to get involved in offshore oil and gas exploration and any partnership with a reputed IOC is welcome," Faruque said earlier.

Bapex is now involved in gas exploration only in onshore gas fields in the country with aggregate output of 80,000 Mcf/d, which accounts for around 3.55% of the country's current average gas output of 2.25 Bcf/d.

"We are interested in joint ventures with foreign companies not only to augment gas output but also to improve our expertise," Faruque had said.

Bapex also has a joint venture with Canadian Niko Resources for several onshore gas fields including Feni and Chhatak.

Gas production from Feni was suspended in May 2010. A total of 22.89 Bcf of gas was produced from the Feni field over November 2004-April 2010.

--Mohammad Azizur Rahman, newsdesk@platts.com --Edited by Elston Soares, elston_soares@platts.com

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