Bangladesh said on Wednesday it would extend for two years Irish company Tullow Oil Plc's production sharing contract for exploring natural gas in the country.
Tullow had sought the extension after a contract for the two blocks in the Bay of Bengal expired in January, energy officials said.
"We have decided to extend the contract for two years in block 17 and 18, which are located in the offshore areas," State Minister of Energy and Mineral Resources A.K.M. Mosharraf Hossain told Reuters.
"We are extending the contract, considering the volume of investment already made."
Tullow had already drilled two wells and invested more than $24 million in the two blocks, they said.
"The go-ahead from the ministry to offer a fresh contract to Tullow has already been communicated to the Petrobangla (state-owned oil and gas corporation)," Mosharraf said.
Petrobangla would formally issue the extension letter to Tullow, he said.
Under the contract signed in early 2000, Tullow was supposed to begin production within four years, but was unable to, energy officials said.
Tullow officials in Bangladesh declined to comment.
Bangladesh has one offshore gas field, in Sangu in the Bay of Bengal, nearly 40 kilometres (25 miles) south-west of Chittagong.
The Royal Dutch/Shell Group is the operator of the Sangu gas field.
Bangladesh has 20.5 trillion cubic feet of proven and recoverable gas reserves.
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