Energy div keeps door open for Cairn to sell gas directly to 3rd party

The energy division has kept the door open for Cairn Energy for future negotiation to allow the UK-based company to sell gas directly to a third party.
The division, which made the decision on Wednesday, earlier said it would not meet the Cairn demand as the country was facing gas crisis and the issue had political implications.
It asked Petrobangla to inform Cairn that the issue of allowing the company to sell gas to a third party would be discussed in future after the company confirmed the presence of gas reserve at Magnama or Hatia structures.
Special assistant to the chief adviser M Tamim at a meeting also asked Petrobangla officials to slam Cairn Energy for ‘breaching the production sharing contract, hiding information and creating mistrust’ in regards to the gas reserve.
He also directed Petrobangla to ask Cairn to show ‘good intentions’ and come out of ‘mistrust’ by conducting exploration works like 3D seismic survey at Magnama and Hatia structures in the Bay.
‘The issue of selling gas to a third party will be discussed later once Cairn confirms availability of gas at the structures,’ Petrobangla was asked to inform the company by Tamim.
Cairn in July-August warned Petrobangla that it would not go for further exploration in the Magnama and Hatia structures, which it found after a 2D survey during this dry season, if the gas price was not increased or the company was not allowed to sell its share of gas directly to a third party once gas was found.
Many Petrobangla officials criticised Cairn saying that it was trying to press home its demand leaving the country in gas crisis.
They also observed that the other international oil companies would come up with the same demand if Cairn’s demand was met. Petrobangla then sought energy division’s directives.
Tamim and energy secretary Mohammad Mohsin earlier told reporters that the Cairn’s demand would not be met as the issues were thorny and had political implications. Energy officials at Wednesday’s meeting went through the PSC that Petrobangla had signed with Cairn for block 16 in early 90’s, said sources present at the meeting.
They observed that as per the existing PSC, there was no provision for increasing gas price for Cairn, but there was an option that Cairn could sell gas directly to a third party in the country if Petrobangla refuses to purchase gas from Cairn, they said.
The meeting observed that there would be criticism if Petrobangla refused to purchase gas at a time when the country was facing huge gas shortage.
It also observed that if Cairn was informed that the Petrobangla dismissed the Cairn’s demand that it will not go for further exploration at the structure and will sit with the structure at least two years without doing anything.
Petrobangla officials alleged that the company did not disclose information to Petrobangla and did not behave well.
When asked why they had decided to hold future talks with Cairn, a high official of the division said there was no problem in holding talks. ‘If a big reserve is found in one of the structures, we can hold talks with them on their proposal to allow them to sell gas directly to third party.’