The government has awarded three petroleum exploration blocks to the USA-based BBB Champion Company and the Dubai-based Emirates Associated Business Group (EABG).
The Department of Mines and Geology (DoMG) on July 5 handed over Block 10 (Biratnagar) to BBB, while the EABG was given Blocks 8 (Janakpur) and 9 (Rajbiraj).
The government has already given seven blocks to the Houston-based Texana Resources Company (two blocks) and a Scottish oil and gas company, Cairn Energy (five blocks).
“After studying their documents, we found these companies capable of performing the job and signed a formal agreement with them,” said Sarbajit Mahato, the director general of the DoMG.
The department had invited bids for petroleum exploration in these three blocks in January. Responding to the department’s call, three companies—BBC, EABG and Hitech Capital of China—had submitted their proposals in March.
The department, however, did not qualify the Chinese firm. “We found the company weak, both financially and technically,” said Mahato.
DoMG officials said they signed the agreement with the two companies after a Cabinet approval. The Cabinet had approved the decision around one-and-a-half months ago.
The department has asked the two companies to submit their detailed work plan within two months. “If their work plan is convincing, we will give them a go ahead to begin the exploration work,” Mahato said. Both the companies will have four years to complete the exploration work. The department, however, can extend the term for four more years in two installments if they fail to meet the deadline. “For the extension of the term, their work must be satisfactory,” the officials said.
With the handing over of the three blocks, all the 10 blocks have been handed over to foreign companies for exploration.
The Tarai and the Siwalik hills have been divided into 10 “exploration blocks” of 5,000 sqkm each. Texana Resources Company won the bid for Blocks 3 (Banke) and 5 (Chitwan) and entered into an agreement with the government in December 1998. Six years later, Cairn received a licence to explore five other blocks-Block 1 (Dhangadhi), Block 2 (Karnali), Block 4 (Lumbini), Block 6 (Birgunj) and Block 7 (Malangawa).