2.500
%
Uncertain
74
mm boe
4
%
Access to the Bangladeshi upstream segment is starting to open, but participant size remains an issue for the country's regulators. This is further complicated by the overly complicated licencing regime, which although appearing to be clear on paper, in practice is a barrier for new entrants.
January 25, 2024
Asia - South West
mm bbl
bcf
Southern Asia, bordering the Bay of Bengal, between Burma and India.
PSC/PSA
Almost all terms being either biddable or negotiable. Cost recovery ceilings are biddable, but a mechanism exists to ensure all costs are recovered within a five-year period. Profit oil splits are biddable, and are based upon production rates. There is also a domestic supply obligation of up to 80% of the contractors share of profit oil, at a discount of 15% to the normal price (this applies to oil only). The rate of corporate income tax is negotiable, whilst a range of bonuses, rentals and fees are also payable.
Bangladesh has made gradual progress over the past decade in reducing some constraints on investment, such as taking steps to better ensure reliable electricity, but inadequate infrastructure, limited financing instruments, bureaucratic delays, lax enforcement of labour laws, and corruption continue to hinder foreign investment. The Government has made efforts to improve the business environment, but the full implementation of its foreign investment policies has yet to materialize. Capital markets in Bangladesh are still developing and the financial sector is highly dependent on banks, which suffered a major scandal in 2022 in which 11 banks faced a collective shortfall of US$3.1bn. A sluggish and reportedly corrupt judicial process and limits on alternative dispute resolution mechanisms impede the enforcement of contracts and the resolution of business disputes. Bangladesh's judicial independence remains fragile with a belief that corruption and judicial inefficiency is undermining the rule of law. Policy changes are required to liberalise or sustain open markets that are currently being undercut by government interference in the economy.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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