Bangladesh Oil, Gas & Mineral Corporation (Petrobangla) has withdrawn the performance bank guarantees of two Indian state-owned energy firms—ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL)—effectively ending their offshore exploration projects in Bangladesh.
According to a report by The Hindu Business Line, following the cancellation of the guarantees, both companies have formally exited two offshore blocks in Bangladesh where they had been operating.
The move comes amid worsening diplomatic and trade tensions between Bangladesh and India, particularly after former Prime Minister Sheikh Hasina was ousted by mass protests last year. Hasina has since taken refuge in India, which has so far ignored Dhaka’s request for her extradition.
Since her fall, bilateral relations have soured, leading to tit-for-tat trade restrictions—India imposed import bans on Bangladeshi apparel, juice, food products, and cotton items, while Bangladesh barred the export of Indian yarn through land ports.
During Hasina’s tenure, OVL, OIL, and Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) had formed a consortium to explore two offshore gas blocks. OVL and OIL each held 45% stakes, while BAPEX had the remaining 10%.
In its latest financial filings to the Bombay Stock Exchange (BSE), Oil India confirmed its withdrawal from blocks SS-04 and SS-09, making provisions of ₹307.43 crore against wells, assets, and unfinished works.
Similarly, ONGC reported that Petrobangla had encashed bank guarantees worth $16.4 million and $16.7 million for the two blocks in February 2025, citing failure to meet minimum work obligations (MWO). OVL’s board subsequently approved the termination of the production sharing contracts (PSCs) in June.
In its 2024 annual report, ONGC noted that no commercially viable discoveries had been made in the two blocks, recording a loss of about ₹31 crore during the exploration period.
Oil India, in its report, said Bangladesh had originally awarded them exploration rights in 2012, covering 14,295 sq km across the two blocks.
A PSC was signed in February 2014 for an initial five-year exploration phase, later extended until February 2025.
Exploration activities included mandatory seismic surveys, drilling of one onshore well (Kanchan-1X in SS-04), and preparations for offshore drilling. As of March 31, 2024, Oil India’s investment share in the two blocks stood at $31.83 million.
