International Oil Companies

International Oil Companies (IOC) are companies working outside the territorial boundaries of their own countries. In the South Asian subcontinent oil exploration and extraction by IOCs began during the British period. In 1866 four wells were drilled near Jaipur (southwest of Digboi, Assam). In 1883 Assam Railways and Trading Company was formed with the object of drilling for oil. Later on Assam Oil Company was created to carry out exploration work in Assam and adjoining areas. Another enterprise, Burmah Oil Company (BOC) was founded in 1896. The BOC discovered Yenangyaung Oil Field in 1897 and in 1901 the company discovered Chauk (Singu) Oil Field, both in Myanmar. During the early part of the twentieth century another company - Indo Burma Oil Company - started operating. In addition to these companies several other companies like Turner Morrison and Company, Whitehall Petroleum Corporation, Assam-Burma Company also did exploration works in this region. Assam Oil Company was taken over by the BOC in 1910. Between 1910 and 1930 the BOC carried out extensive exploration work in Assam and adjoining areas. In 1937 BOC, Royal Dutch/Shell and Anglo Iranian Oil Co applied for exploration licensee in India and started geophysical survey. Due to the World War II all activities were suspended.

After independence of India and Pakistan, exploration resumed during the early part of 1950s when Shell as Pakistan Shell Oil Company, BOC as Pakistan Petroleum Ltd (PPL) and Standard Vacuum Oil started seismic survey over large part of the East Pakistan.

After independence of Bangladesh, Shell wound up their operation and PPL left their fields. PPL's assets were taken over by the government and the government bought Shell's assets. During the early 1970s, the government signed Petroleum Concession Contracts with international companies like Atlantic Richfield Co (ARCO), Union Oil of California (Unocal), Ashland Oil, Canadian Superior, Ina-Naftaplin and Japan Oil Development Corporation for exploration in the offshore area of the country. Offshore campaign resulted in discovery of one gasfield by Union Oil. By 1978 all the companies relinquished their concession and left. During early 1980's Shell returned and drilled two prospects on the onshore area and both were dry holes. They left again. During the 1990s PSCs were signed with Occidental Oil, Okland Oil and United Meridian Corporation of USA and Cairn Energy of UK for exploration of hydrocarbon. In 1997 the government invited bids from international oil companies and received excellent response.

The IOCs' exploration activities resulted in the discovery of gas in Sangu (offshore) by Cairn Energy and in Bibiana and Maulvi Bazar by Occidental. Later Cairn's operation was taken over by Shell and Unocal took over Occidental's interest in Bangladesh. The bid round of 1997 resulted in signing of PSC with Unocal Corporation of USA for Block 7 and with Shell-Cairn for Blocks 5 and 10. Both were initialed during 2000. In both the contracts BAPEX is a partner with 10% equity under carried interest system.

Bangladesh had offered a total of 28 offshore blocks - 20 deepwater and eight shallow water - in the latest round of bid launched in February 2008 and received bids from seven companies for 10 deepwater blocks and three shallow water blocks. US-based ConocoPhillips and Ireland's Tullow Oil have been selected to award exploration license for nine offshore blocks. ConocoPhillips has been awarded eight deepwater blocks and one shallow water blok has been awarded to Tullow Oil. The other companies participated in bidding included Australia's Santos, China's CNOOC International Ltd., Korea National Oil Corp., Longwoods Resources Ltd. and Comtrack Services Ltd.

Petrobangla expects to sign a final exploration contract with the companies by October 2008. ConocoPhillips will invest $445 million and Tullow Oil $50 million in exploratory work on the nine blocks. Apart from these two companies, five other IOCs- Chevron, Cairn Energy, Tullow Oil, Niko Resources and Total – has been operating in the country. [Mir Moinul Huq and Sanzida Murshed]