Dhaka: State-owned Petrobangla signed an initial deal with Korean company POSCO Daewoo Corporation for exploration of oil and gas in the deep offshore block-12 in the Bay of Bengal.

Petrobangla director (PSC) Md Mahbub Sarwar and POSCO Daewoo Corporation representative Junggoo Junn signed the initial deal on behalf of their organisations, said a Petrobangla media release.

As per the deal, the initial exploration period will be five years.

The Korean company will conduct 1,800 square kilometres 2D seismic survey in first two years. It would conduct 1,000 square kilometres 3D seismic survey in the third year and drill an exploratory well in the fourth and fifth years.

The 2D survey will begin in 2017 and it will be possible to have an initial idea about the oil-gas reserve in the block in 2018.

The Petrobangla invited expression of interest (EoI) to explore country’s oil and gas on deep offshore blocks-12, 16 and 21 on February 5, 2016. Then, KrisEnergy (Asia) Limited, POSCO Daewoo Corporation and Statoil showed interest. But the Daewoo only submitted expression of interest to explore block-12 under special power and energy enhancement act.

Energy and mineral resources division secretary Nazimuddin Chowdhury, Petrobangla chairman Istiaque Ahmed, additional secretary Zakir Hossain and senior official concern attended at the singing function.

‘We will sign final deal with the company after vetting from the ministry of law,’ Petrobangla chairman Istiaque Ahmed earlier said.