Tuesday, October 12, 2010

Conoco (NYSE:COP) Signs Exploration Agreement with Petrobangla

ConocoPhillips (NYSE:COP) announced they've signed an exploration deal with Petrobangla, the Bangladesh state-run energy company. The deal will be for two blocks in the Bay of Bengal, where Conoco can explore for hydrocarbons, subject to signing a production sharing contract.

That has been held up because of ongoing disputes between Myanmar, India and Bangladesh.

Conoco should get clearance because the specific blocks they're going to explore in aren't within the specific disputed territory, although India and Myanmar have objected to some portions of the two blocks in question.

Bangladesh has filed a suit with the International Court of Justice in The Hague, while they communicate with their two neighbors in hopes of settling the issue.

Based on existing consumption rates, Bangladesh said their gas reserves could run out by 2014-2015, and the exploration and resultant production is estimated to take about five years to bring results.

ConocoPhillips will spend close to $111 million for the two blocks.

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